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    Latin America Reports

    Mexico’s Aeronautical Industry a “Gold Mine” for the Economy

    The workforce is rapidly headed toward 60,000 people, as the country assumes the position of the world’s sixth largest aviation industry.

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    Charles W. Thurston, Latin America Correspondent04.12.19
    Mexico’s aviation industry is booming, with $8.5 billion in exports in 2018, and an annual export value growth of nearly 15 percent per year, according to Luis Lizcano, the general director of the Federación Mexicana de la Industria Aeroespacial (Femia).

    About three-quarters of the raw materials and components used in the industry are sourced in the U.S. and Canada, destined for about 270 companies in Mexico, spread over 18 states.

    The workforce is rapidly headed toward 60,000 people, as the country assumes the position of the world’s sixth largest aviation industry. The opportunities for paint and coatings in the industry have not diminished during this expansion. A 2016 Global Business Report on the industry-sponsored by the national export agency, ProMexico, found in a survey of end customers that over 50 percent expressed the perception of a lack of capability in Mexico for chemical processes in general, and coatings specifically.

    Among the types of coatings utilized in the Mexico aviation industry are:
    • Thermal Spray
    • Cementation Processes
    • Vapor Deposition
    • Coating Evaluation Laboratory
    • Stripping of Coatings
    • Heat Treating of Coated Parts
    • Dry Film Lubrication of Coated Parts.

    Much of the success of the industry is the result of an estimated $13 billion worth of foreign direct investment in the aviation sector in Mexico, of which three-quarters were sourced in North America, and one-quarter was sourced in Europe over the past decade.

    Among new OEMs investing in Mexico over the recent past are Canada’s Bombardier, France’s Latécoère or Spain’s ITP Aero, notes Femia. Part of the growth in the industry is the result of strong domestic demand for new aircraft. According to one projection cited by Femia, Mexico will order over 3,000 new aircraft by 2034, at a cost of at least $350 billion. This demand is about one-fourth of what the U.S. will present.

    To further foster the sector growth, Femia is working to establish a National Strategic Aerospace Plan, led by the Secretary of Economy, including the majority of the aerospace companies in the country and federal, state and local authorities. This group plans to advise the government in the establishment of new legislation concerning the aerospace industry. The organization also will develop joint strategies to group suppliers of raw materials, components, machinery, and services, Femia said.

    Similarly, in coordination with the National Productivity Council, Femia is directing the National Program for Supply Chain Development with the objective of integrating more competitive value chains in terms of productivity, quality, costs and lead-times in the aerospace industry in Mexico, the group said. Femia already has developed an Aerospace Capabilities & Competitiveness Inventory of its membership, which it is promoting to 200 major buyers of aviation equipment. A technological capabilities inventory will be promoted to more than 200 aerospace buyer companies, as a strategy to bring more work to Mexico. To help work with local member companies in this effort, Femia is collaborating with the U.S.-Mexico Foundation for Science (FUMEC) to integrate technological capabilities, and to augment competitiveness acceleration through recommendations.

    One current South America Trade Mission that was planned to include Mexico’s aviation industry is that led in late March by the Conference of Great Lakes and St. Lawrence Governors and Premiers. The group unites the chief executives from Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Ontario, Pennsylvania, Québec, and Wisconsin.

    Clariant Sales Growth Led By Latin America in 2018

    Clariant’s global sales growth in 2018 was led by Latin America, up 12 percent to CHF775 million, compared with only seven percent in Asia, five percent in North America, and two percent each in Europe and the MNA regions. Within Latin America, Brazil growth was up three percent to CHF321 million, the company reported in its year-end results. Globally, the company earned CHF6.6 billion last year.

    Within the company’s Plastics & Coatings division, sales rose by one percent in local currency with particularly strong regional expansion in Latin America, Clariant said. In Performance Chemicals, “all regions contributed to the sales growth in local currency. The expansion was most pronounced in Latin America,” the company reported.Among customer segments, sales in Latin America increased by nine percent in a local currency supported by the company’s Oil & Mining Services division.

    In the company’s Integrated Report, Clariant observed “Growth in local currency rather than product volume in Latin America (was) due to depreciating currencies. The current outlook indicates increased volume growth at potentially more stable currencies, with more optimism in Brazil than there has been in the last several years. The business environment is improving.”

    Along with financial results, the company provided a corporate sustainability report that touched on enhanced safety training in Latin America. “To increase the occupational health, safety and well- being of employees, Functional Minerals started the Safety Teams initiative in 2018 to involve workers in continuously improving safety at the workplace.”

    In Latin America, Clariant is keenly focused on its Oil & Mining Services unit, which has “focused its efforts on increasing road safety, as employees drive over 36,000,000 kilometers each year to deliver products or provide services to customers. In 2018, it introduced a driver training program for all employees in North America and installed camera systems with an incorporated event recorder in over 200 vehicles in the U.S. The training will be rolled out in Latin America in 2019 and will be available as an e-learning course as well.”

    Earlier this year, Clariant was recognized by mining giant Angle American as its top supplier in 2018 within the sustainability category. This marked the second year for this award from Anglo American, in large part to the project Clariant developed with Brazil’s Minas Gerais State Industry Federation and the Industry Social Service (SESI), the company reported. Clariant has been conducting the Sports Schools Project in Minas Gerais for over two years, reaching more than 140 public school students in the city of Itapanhoacanga, the company said. Among the many benefits that this program has provided to the local community, reduced school absenteeism and better relationships between students and their teachers and family members are the most noteworthy, the company said.

    “It is with great satisfaction that we have received this special recognition from our customer, with whom we share the commitment of supporting local communities and contributing to their development, as part of our strategic pillar Add Value with Sustainability,” said Nilson Bartalini, Clariant Mining Solutions manager for North region of South America.

    The Outstanding Suppliers award is offered by Anglo American to strategic and tactical business partners who specialize in the production of iron ore in Brazil. The evaluation takes into consideration the company’s technical and operational performance, compliance with safety and environmental performance indicators, as well as social actions implemented in local communities. 
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