Mexico City — As Houston operations manager for Custom Polymers Inc., Carlos Lotero has immersed himself in the Latin America plastics recycling market over the years.
As the 24th edition of Plastimagen show rolled around this year in Mexico City, Lotero found himself in a unique position. It was the first time in his career that he's been unable to attend as his duties took him elsewhere.
But Lotero, whose plastics recycling company still had a booth at the show, shared some insights into the importance of the Mexico plastics market and the plastics recycling market from his view.
"Mexico's plastics market represents a strong opportunity for U.S. exporters and importers as well due to its many applications in various sectors and final products. Custom Polymers Inc. exports a lot of commodity grade recycled plastic," Lotero said in an email interview.
"Mexico's plastics production has grown steadily at an average of 5.27 percent annually since 2018. Positive factors for this industry include a burst in nearshoring activity and new orders received from the United States and Canada driven by the United States-Mexico-Canada Agreement (USMCA). Mexico's plastic industry was valued at US$52 billion in 2022," he said.
"However, some challenges include the cost of plastic manufacturing as it involves many factors including raw materials, tooling, waste, and labor. Finding ways to reduce costs without sacrificing quality can be difficult. A shortage of labor and also less plastic scrap due to lower demand in some finish products in the manufacturing industry is also a contributing factor," Lotero said.
Custom Polymers, based in Charlotte, N.C., has been doing business in Mexico since 1999 and more than 20 percent of the company's export business is to Mexico. He said the firm's "best Latin American partners are in Mexico."
As the impacts of COVID-19 continue to disappear in the rearview mirror, Lotero also gave some insight into market conditions since the pandemic struck.
"The year that we were locked up for COVID-19 was actually a great year for the company. The demand for plastic scrap from Mexico grew specially in some products like PVC and [low density polyethylene]. This demand remains very steady and stable even though the global plastic industry has slowed down a little," he said.
"The plastic industry in Mexico continues to grow. ... The circular economy is giving a lot of opportunities to the industry in Mexico," Lotero said.
This year, however, he added, "the overall global demand slowed" as he said multiple factors impacted plastic recycling growth drastically. "The high ocean freight is affecting both the import and export market," he said. "Mexico is re-inventing its own industry through circular economy."
Lotero estimated 60 percent of the recycled plastics in Mexico is used domestically while the other 40 percent is exported. He also cited rising demand for recycling plastics in the automotive, packaging, consumer goods, agriculture, textiles and construction markets.