Market Trends of Mexico Masterbatch Industry
Growing Demand from the Packaging Segment is Driving the Market
- In the packaging industry, producers are increasingly turning to masterbatches to cut production costs and enhance productivity. These masterbatches come in two primary forms: filler masterbatch and color masterbatch.
- The filler masterbatch acts as a resin substitute, reducing material costs and enhancing production efficiency due to its added additives.
- On the other hand, the color masterbatch serves as a pigment substitute, allowing producers to achieve precise color shades for their packaging products. Beyond color accuracy, the color masterbatch also contributes to a more streamlined production process.
- The Mexican packaging market is very dynamic owing to its huge manufacturing base. It has been reflecting the changes that the country's industrial sectors have witnessed.
- As per industry data, in 2023, the packaging industry in Mexico was characterized by its significant use in the food industry, accounting for a more than 37% share in terms of size. In the country’s food industry, flexible packaging is the most widely used pack material, followed by rigid plastics.
- In June 2023, Smurfit Kappa, a packaging manufacturer, invested USD 12 million in the Tijuana plant to increase the production of sustainable packaging and focus on technological advancements within the plant.
- In April 2023, Envases Universales, a prominent packaging manufacturer, announced the expansion of its PET container recycling facility in Central Mexico from an annual capacity of 60,000 tons to 100,000 tons.
- In October 2023, Coca-Cola announced an investment of USD 133 million to expand the juice and dairy production and packaging segment in Mexico via the soft drinks giant’s local subsidiary, Jugos del Valle-Santa Clara.
- Growing packaging activities like these in Mexico are driving the demand for masterbatches that improve the functional properties of packaging materials in the country.
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Growing Demand for Lighter-weight and More Fuel-efficient Vehicles Driving the Market
- Masterbatches enhance car components and materials in the automotive industry. These additives improve the performance, functionality, and aesthetics of plastics and coatings in parts like bumpers, mirrors, dashboards, and door panels. UV stabilizer masterbatches prevent fading and cracking, while flame-retardant masterbatches enhance safety.
- Additive masterbatches improve lightweight plastic components with features like scratch resistance, impact modification, and anti-fogging. This results in components with high mechanical strength and chemical resistance. As the industry shifts toward electrification, the demand for high-performance materials rises, with masterbatches playing a key role.
- Mexico ranks as the world's seventh-largest manufacturer of passenger vehicles, churning out 3.5 million vehicles each year. A staggering 88% of these vehicles find their way to international markets, with 76% heading straight to the United States.
- Boasting a localized automotive supply chain, Mexico stands as the world’s fourth-largest auto parts producer and the top supplier to the United States.
- The Mexican Automotive Industry Association (AMIA) projects that, fueled by escalating investments, Mexico is on track to become the world’s fifth-largest vehicle producer by 2025.
- With its strategic location, business-friendly environment, and skilled workforce, Mexico has emerged as a prime hub for automotive companies. As the global appetite for non-emission vehicles grows, foreign direct investments, particularly in electric vehicle manufacturing, are surging from nations like China, Germany, and the United States. This uptick in investments is simultaneously driving the demand for coatings in electric vehicles.
- In February 2024, BYD Co. Ltd, a Chinese manufacturer, announced that it was planning to set up a new electric vehicle (EV) factory in Mexico, with the aim of establishing it as an export hub to the United States.
- In February 2024, Volkswagen Mexico announced that it plans to invest around USD 1 billion in an electromobility hub at its Puebla plant.
- In January 2024, MAHLE, a German automotive manufacturer, announced the opening of Plant 3, which was made possible by an investment of around USD 70.1 million in Ramos Arizpe, Coahuila.
- Thus, the aforementioned factors are expected to augment the growth of the Mexican masterbatch market during the forecast period.
