Material Finishing Industry

An Expert's View about Metalworking in Mexico

Posted on: 23 Sep 2012


The material finishing segment is a derivative of other industries - it exists due to the need of secondary processes that require the use of dangerous chemicals and sophisticated waste control measures. Prior to 1975, Mexico’s finishing’s businesses earned income by servicing the furniture, decoration, sanitary, electric and some automotive applications. With the proliferation of foreign industries in the automotive, electronics and appliances sectors, a frantic race began to reach the status of preferred supplier to these new enterprises. In 1992, due to the polluting nature of the majority of finishing processes, the Mexican government created PROFEPA, a surveillance and prosecuting agency. Later, in 2000, former president Ernesto Zedillo created SEMARNAT, the regulating agency tasked with the goal of ensuring a more scientific approach to environmental protection. With these two government agencies, the Mexican government intends to expand regulatory control over a large number of informal shops which operate in anonymity and even clandestinely all over the country.

Market Demand

In the past, Mexico’s metal finishers depended mostly on domestic customers with rather low quality requirements. Beginning in 1994, with the signing of NAFTA, new companies arriving from other countries struggled, usually unsuccessfully, to find reliable, high quality providers.. The largest companies decided to invest in supplier development programs to assure the level of reliability required by their manufacturing policies and their home country regulations. The most dynamic forward-looking finishers learned how to provide high-quality products and did so by investing in the proper technology.

There is a great opportunity for newer technology in this sector; however, the majority of finishing shops range from medium to very small companies with limited resources, that way, a large investment in equipment is not always an option which they could take. The U. S. exporter should consider providing financing to facilitate their sales with Mexican small finishers.

Mexico industry is self sufficient in their production of chemical solutions utilized in this sector, however, U. S. Census Bureau data indicates that in 2011, U. S. exports to Mexico of Non-Ferrous metals amounted to $3 billion and basic chemicals to $9 billion which indicates that significant material is being imported,

The U.S. exporter thinking to sell in Mexico’s finishing segment must provide basic chemicals, measuring devices, test equipment, environmental control systems such as waste and residuals treatment plants, fumes extraction systems, automated application systems, surface preparation techniques, ROHS and WEEE compliance consultation service and specific technical knowhow.

The largest finishers have survived the previous recessions thanks to their ability to invest in automated equipment to augment their capacity and by complying with the more stringent quality and environmental protection norms and standards. Increasing capacity has been a necessity since the profit margins in this sector are low and only by gaining large volume projects can companies assure their continued success in the market.

Market Data

INEGI, the Mexican National Statistics and Geography Institute, provides a quarterly report of manufacturing activity by NAICS code (SCIAN code, In Mexico). In a sample of 71 establishments under activity 332810 (metal coating and metal plating), taken from a universe of 657 companies, INEGI reports that Mexican companies import $124.4 million of raw materials which is only on tenth of what is needed to produce their products, the rest, is procured domestically. Taken from a universe of 369 different companies, a sample of 65 establishments under NAICS 325510 (paint and coating manufacturing) imported material with a value of $235.4 million and their domestic consumption is about three times as much.

Read the full market research report

Posted: 23 September 2012