Charles W. Thurston, Latin America Correspondent09.21.22
The Mexican market for powder coatings is expanding rapidly once again as advances in architectural, automotive, and industrial segment businesses evolve. While automotive manufacturers and refinishers represent the largest market for powder coatings in the country, architectural demand for painted structural elements and industrial demand for corrosion control also are helping to drive the market.
International investment in Mexico’s OEM automotive industry is still rising rapidly, leading to record production and export levels. “Mexico’s production of passenger vehicles registered its highest monthly total of the year with 316,815 units in August, a 31% year-over-year increase,” according to FreightWaves, a specialized publication.
Part of the expansion movement in Mexico’s automotive industry is due to the reshoring trend of replacing Asian production facilities with new investments closer to the U.S. market (See CW 03.22.22). This is further encouraged by regional trade agreements. “Mexico’s Free Trade Agreements (FTA) with the USA, Canada, & European Union is encouraging several global players to set up their manufacturing units across the country…(a) crucial aspect driving the market,” according to a new research report by India’s MarkNtel Advisors, Mexico Industrial Coatings Market Analysis, 2022.
The Mexico industrial coatings market, which includes the automotive segment in the report, is expected to grow at a CAGR of around 19% during the 2022-2027 period, the analysts suggest. “The market growth ascribes primarily to massive investments in manufacturing vehicles & their components that have established new industrial facilities across Mexico and, in turn, has propelled the demand for industrial coatings in the country,” the analysts reported in September.
One recent investment in support of this wave came from PPG, which in August announced an $11 million investment to double the production capacity of its powder coatings plant in San Juan del Rio, Mexico by the middle of 2023. “With this investment, the plant will have new, state-of-the-art manufacturing technology, enhancing production practices and process flow,” said Guillermo Peña, PPG director, Industrial Coatings, Mexico, said in the announcement.
Among growth areas in Mexico’s automotive industry is the preparation for electric vehicle (EV) manufacturing, which is predicted to expand quickly over the coming decade. Mexico has a plan to build a new EV automotive hub in the the northern border state of Sonora, already a leader in the production of lithium for EV batteries.
Other types of industrial demand for powder coatings also are on the rise. Mexico Industrial production rose 3.8% year-over-year in June, according to CEIC Data, part of ISI Emerging Markets. The production rate reached an all-time high in May 2021 and a record low in May 2020, the analysts report.
Among recent industrial project advances, Shawcor in August announced that its pipe coating division received a contract worth C$500 million from Transportadora de Gas Natural de la Huasteca, the Mexican subsidiary of TC Energy. The contract covers pipe coating services for the Southeast Gateway Pipeline project, an offshore natural gas pipeline in southeast Mexico.
As part of that announcement, Kevin Reizer, the president of PPG said “This project reinforces the trend of increased large project activations we are seeing globally and coupled with the recently announced Scarborough Gas Export Pipeline, will return Shawcor’s conventional offshore pipe coating activity to levels not seen since the oil price collapse of 2015.”
The recent PPG production expansion plan is expected to support many similar industrial projects in Mexico. “We have interesting innovations for the industrial market aimed at sustainability, corrosion protection, and the durability of the assets that it protects with coatings, and with the pandemic we began to look for functionality in the antibacterial field,” PPG’s Peña told Mexico Industry in 2021.
“We plan to continue investing in production capacity, not only in volume but also in speed. What we are always looking for is to improve efficiency and optimize our processes, make them as simple as possible in order to have a much more manageable and efficient process to serve customers,” Peña told Mexico Industry.
Another industrial manufacturing market for powder coatings in Mexico is semiconductors. “The rapid growth in Mexico's consumer electronics industry is anticipated to propel the demand for industrial coatings in the country during 2022-2027. Besides, the rise in foreign investments and the surging foothold of companies through business expansion in the country are other crucial aspects expected to flourish the Mexico Industrial coatings market growth,” MarkNtel reported.
As part of the Biden administration’s landmark CHIPS Act, which will provide $50 billion in support for semiconductor manufacturing and research, the U.S. government is seeking to augment Mexico’s chip making role in North America. CHIPS will provide $28 billion in incentives for semiconductor production, $10 billion for new chip manufacturing and $11 billion for R&D.
During a September meeting between U.S. Commerce Secretary Gina Raimondo and Mexican President Andrés Manuel López Obrador, Raimondo said that there is an opportunity for Mexico to increase its capacity to test, package and assemble chips, a $60 billion industry in China and Taiwan, but currently worth only $3 billion in North America, the New York Times reported.
The use of powder coatings for architectural metal products in Mexico also is rising. According to a May report by MarketsandMarkets, the global
market is projected to grow from $5.1 billion in 2022 to $6.4 billion in 2027, at a CAGR of 4.6%. Fascia & soffits is the fastest-growing coil coating application segment of the overall architectural metal coatings market, the analysts report.
In Mexico, airports, hotels, and a host of infrastructure developments rely on specialized metal coatings to provide impermeable and intumescent protection. Mexico produces 17.9 million tons of raw steel per year, according to statistics from Camara Nacional de la Industria del Hierro y del Acero (Canacero), the national steel manufacturers association.
March saw the opening of the $4 billion Felipe Ángeles International Airport, the second airport serving the Mexico City metropolitan area, involving substantial volumes of architectural metal components. This year, the governments plans to invest $600 million to maintain and upgrade existing airports.
Among suppliers of architectural metal products in Mexico, Rejimex International, a member of the Illinois-base National Association of Architectural Metal Manufacturers, is supplying coated metal components for the refurbishment and expansion of the Aeropuerto Internacional de la Ciudad de México (AICM).
Hotel construction is another key segment of the architectural metal market. Mexico has the largest hotel construction pipeline in Latin America, according to the latest Construction Pipeline Trend Report from Lodging Econometrics. “A total of 207 projects and 38,671 guest rooms are currently in development in the country, far exceeding’s Brazil’s second-place status of 97 projects and 15,901 guest rooms,” the analysts said in February.
Automotive Investments Drive Most Demand
International investment in Mexico’s OEM automotive industry is still rising rapidly, leading to record production and export levels. “Mexico’s production of passenger vehicles registered its highest monthly total of the year with 316,815 units in August, a 31% year-over-year increase,” according to FreightWaves, a specialized publication.
Part of the expansion movement in Mexico’s automotive industry is due to the reshoring trend of replacing Asian production facilities with new investments closer to the U.S. market (See CW 03.22.22). This is further encouraged by regional trade agreements. “Mexico’s Free Trade Agreements (FTA) with the USA, Canada, & European Union is encouraging several global players to set up their manufacturing units across the country…(a) crucial aspect driving the market,” according to a new research report by India’s MarkNtel Advisors, Mexico Industrial Coatings Market Analysis, 2022.
The Mexico industrial coatings market, which includes the automotive segment in the report, is expected to grow at a CAGR of around 19% during the 2022-2027 period, the analysts suggest. “The market growth ascribes primarily to massive investments in manufacturing vehicles & their components that have established new industrial facilities across Mexico and, in turn, has propelled the demand for industrial coatings in the country,” the analysts reported in September.
One recent investment in support of this wave came from PPG, which in August announced an $11 million investment to double the production capacity of its powder coatings plant in San Juan del Rio, Mexico by the middle of 2023. “With this investment, the plant will have new, state-of-the-art manufacturing technology, enhancing production practices and process flow,” said Guillermo Peña, PPG director, Industrial Coatings, Mexico, said in the announcement.
Among growth areas in Mexico’s automotive industry is the preparation for electric vehicle (EV) manufacturing, which is predicted to expand quickly over the coming decade. Mexico has a plan to build a new EV automotive hub in the the northern border state of Sonora, already a leader in the production of lithium for EV batteries.
Industrial Demand Also Rises
Other types of industrial demand for powder coatings also are on the rise. Mexico Industrial production rose 3.8% year-over-year in June, according to CEIC Data, part of ISI Emerging Markets. The production rate reached an all-time high in May 2021 and a record low in May 2020, the analysts report.
Among recent industrial project advances, Shawcor in August announced that its pipe coating division received a contract worth C$500 million from Transportadora de Gas Natural de la Huasteca, the Mexican subsidiary of TC Energy. The contract covers pipe coating services for the Southeast Gateway Pipeline project, an offshore natural gas pipeline in southeast Mexico.
As part of that announcement, Kevin Reizer, the president of PPG said “This project reinforces the trend of increased large project activations we are seeing globally and coupled with the recently announced Scarborough Gas Export Pipeline, will return Shawcor’s conventional offshore pipe coating activity to levels not seen since the oil price collapse of 2015.”
The recent PPG production expansion plan is expected to support many similar industrial projects in Mexico. “We have interesting innovations for the industrial market aimed at sustainability, corrosion protection, and the durability of the assets that it protects with coatings, and with the pandemic we began to look for functionality in the antibacterial field,” PPG’s Peña told Mexico Industry in 2021.
“We plan to continue investing in production capacity, not only in volume but also in speed. What we are always looking for is to improve efficiency and optimize our processes, make them as simple as possible in order to have a much more manageable and efficient process to serve customers,” Peña told Mexico Industry.
Another industrial manufacturing market for powder coatings in Mexico is semiconductors. “The rapid growth in Mexico's consumer electronics industry is anticipated to propel the demand for industrial coatings in the country during 2022-2027. Besides, the rise in foreign investments and the surging foothold of companies through business expansion in the country are other crucial aspects expected to flourish the Mexico Industrial coatings market growth,” MarkNtel reported.
As part of the Biden administration’s landmark CHIPS Act, which will provide $50 billion in support for semiconductor manufacturing and research, the U.S. government is seeking to augment Mexico’s chip making role in North America. CHIPS will provide $28 billion in incentives for semiconductor production, $10 billion for new chip manufacturing and $11 billion for R&D.
During a September meeting between U.S. Commerce Secretary Gina Raimondo and Mexican President Andrés Manuel López Obrador, Raimondo said that there is an opportunity for Mexico to increase its capacity to test, package and assemble chips, a $60 billion industry in China and Taiwan, but currently worth only $3 billion in North America, the New York Times reported.
Architectural Metal Market Also Growing
The use of powder coatings for architectural metal products in Mexico also is rising. According to a May report by MarketsandMarkets, the global
market is projected to grow from $5.1 billion in 2022 to $6.4 billion in 2027, at a CAGR of 4.6%. Fascia & soffits is the fastest-growing coil coating application segment of the overall architectural metal coatings market, the analysts report.
In Mexico, airports, hotels, and a host of infrastructure developments rely on specialized metal coatings to provide impermeable and intumescent protection. Mexico produces 17.9 million tons of raw steel per year, according to statistics from Camara Nacional de la Industria del Hierro y del Acero (Canacero), the national steel manufacturers association.
March saw the opening of the $4 billion Felipe Ángeles International Airport, the second airport serving the Mexico City metropolitan area, involving substantial volumes of architectural metal components. This year, the governments plans to invest $600 million to maintain and upgrade existing airports.
Among suppliers of architectural metal products in Mexico, Rejimex International, a member of the Illinois-base National Association of Architectural Metal Manufacturers, is supplying coated metal components for the refurbishment and expansion of the Aeropuerto Internacional de la Ciudad de México (AICM).
Hotel construction is another key segment of the architectural metal market. Mexico has the largest hotel construction pipeline in Latin America, according to the latest Construction Pipeline Trend Report from Lodging Econometrics. “A total of 207 projects and 38,671 guest rooms are currently in development in the country, far exceeding’s Brazil’s second-place status of 97 projects and 15,901 guest rooms,” the analysts said in February.
