Opportunities in Mexico’s Plastic Manufacturing Industry

Mexico manufactures a tremendous amount of plastic materials. It is home to over 4,000 companies producing resins and transforming them through injection molding, thermoforming, and other processes. In 2021, Mexico exported more than $14 billion in rubbers and plastics, primarily to the United States (76%).

That said, there remains a significant growth opportunity for companies looking to serve this sector. Mexico’s manufacturers incorporate a range of plastic materials within automotive components, aerospace parts, medical devices, and consumer goods, among other things. Demand for resins and plastic processing equipment, in particular, presents tremendous opportunity for suppliers.

Below, we’ll describe the size and location of Mexico’s plastic manufacturing industry and six key opportunities for growth in Mexico's plastic manufacturing industry.

Mexico’s plastic manufacturing market at a glance

According to Mexico’s National Institute of Statistics and Geography (INEGI), the value of total production in Mexico’s plastics industry has steadily grown by more than 5% since 2018. The growth of this industry is closely tied to Mexico’s manufacturing in automotiveaerospace, and other high-growth sectors, giving plastics manufacturers good reason to expand into Mexico.

To date, more than 4,000 plastic companies operate across Mexico. A strong concentration of Plastic Manufacturing companies are located in the following states: Jalisco, Nuevo León, Puebla, Querétaro, Coahuila, Sonora, Guanajuato, San Luis Potosí, and Mexico City. 

Mexico’s Plastics and Resins Production and Market Size
(Figures in USD billions)

 

2020

2021

2022

2023 (Estimate)

Total Local Production

19.52

24.62

28.22

28.73

Total Exports

12.09

15.30

17.72

18.04

Total Imports

27.48

37.34

41.52

42.27

Total Market Size*

34.90

46.66

52.03

52.96

Sources: INEGI; *2023 estimates in USD from the IMF
*Total market size = (total local production + imports) – exports

 

Opportunities to support Mexico’s plastic manufacturing industry

Growing demand for plastic and innovative ways it is being integrated across a range of product types present tremendous opportunities for Mexico-based plastics manufacturers. Below are six key areas where companies are finding growth opportunities for manufacturing in Mexico:

1. Plastic automotive content is increasing

The automotive industry’s work to reduce vehicle weight for greater fuel efficiency has relied heavily on plastic components. High-performance thermoset plastics also help absorb impact for safer, more durable cars. Moreover, electric vehicle manufacturers are exploring using plastic battery housings to offset the weight of batteries and reduce the risk of fire. As a result, plastic components are increasingly in demand for automotive applications.

Mexico has a long history as an automotive manufacturing powerhouse. Today, virtually all major automotive OEMs have a factory in Mexico. Injection molding companies, carbon fiber producers, and other plastics suppliers operating in Mexico have an opportunity to serve this manufacturing base. Locating close to these partners can help companies reduce time to market and shipping costs while strengthening partnerships.

Suppliers are already responding to this demand. Zoltek Companies Inc. is expanding its facility in Guadalajara to satisfy the surging demand for advanced materials from transportation customers. Canada-based Axiom Group is doubling its injection molding capacity in San José Iturbide to deliver products to the automotive industry more rapidly.

2. Demand for plastic medical devices is skyrocketing

The global medical device industry is poised for massive growth, much of which is rooted in Mexico. Mexico has long served as a low-cost hub for medical device manufacturing and assembly. Demand from U.S. customers for shortened delivery timelines has pushed many medical device companies to move manufacturing from China and other Asian countries to Mexico.

Plastics solution provider Brentwood is growing its production space in Tijuana only five years after launching in the city. From this space, the company produces thermoformed medical packaging for customers in the U.S. and Central America. In announcing the expansion, the company cited the local team’s capabilities as central to its success operating in Mexico.

3. Plastic packaging is evolving

Among the key growth drivers for Mexico’s plastics industry is packaging, specifically food and appliance packaging. Data from the Mexican Packaging Association (AMEE) indicates that the packaging sector accounts for 50% of Mexico’s total plastics industry and represents 1.7% of the country’s GDP. In 2019, this segment saw a 4% increase in production. 

What’s more, this is one area that has shown tremendous resilience against market disruptions. AMEE reported in September 2020 that the production of plastic packaging had grown 15% in Mexico in 2020 despite the global COVID-19 pandemic. Demand for cleaning products, medicines, food, and beverages, drove a tremendous uptick in plastic production. 

4. Mexico is supporting more sustainable processes

The production of plastic packaging is evolving in the face of new market challenges. Chief among these challenges is an increase in demand for more sustainable products and fewer one-time-use plastics. Under the National Agreement for the New Plastics Economy in Mexico, for example, organizations have committed to collect, recycle, or make compostable up to 80% of PET and 45% of packaging plastics made in Mexico by 2030.

As a result, Mexico’s packaging industry is working to develop the infrastructure needed to develop compostable materials and improve recycling rates – and it has tremendous support in doing so. Mexico’s National Association of Plastic Industries (ANIPAC) is supporting manufacturers in achieving a circular approach to plastics manufacturing. More than 360 plastics companies in Mexico already have recycling processes in place. Many companies may find that a location in Mexico can support their sustainability commitments while reducing operational costs.

5. Plastic manufacturing equipment is in big demand

As plastic manufacturing grows in Mexico, so too does the demand for equipment to support this sector. The industry has imported injection molding and die-casting equipment, extrusion lines, and robotics solutions to support automation.

As LS Mitron Injection Molding Machine CEO Kevin Kim told Plastics News, Mexico’s growing plastics industry creates a tremendous opportunity for equipment manufacturers. The company launched a new business unit in Monterrey as an opportunity to let prospective customers see their equipment in action. More than 1,000 of the company’s injection molding machines are already operating in Mexico. The company also established a satellite office in Queretaro to serve the state’s large plastics processing and mold-making industry.

Mold machinery manufacturer Haitian International has also launched a site in Mexico, in the state of Jalisco, to serve nearby customers better. However, the company has stated that its focus is on delivering machinery to customers throughout the Americas, and Mexico provides a central location from which to do so. Mexico’s robust international highway and railway network, in combination with Atlantic and Pacific deep-sea ports, provides easy accessibility to global customers.

6. More plastics require more resins

Mexico’s growing plastic sectors have also increased demand for the raw materials used for plastic manufacturing. While Mexico produces considerable amounts of polyethylene (PE), polypropylene (PPE), polyethylene terephthalate (PET), and polyvinyl chloride (PVS) resins, it imports nearly as much as it manufactures. In 2022, Mexico purchased more than $42 billion in plastic resins from around the world. This presents an opportunity for plastics manufacturers and suppliers to streamline their supply chain further.

Find more opportunities by manufacturing in Mexico

There are tremendous opportunities for growth in the worldwide plastics industry. By locating in Mexico, companies can benefit from low-cost labor with tremendous industry knowledge. Mexico also provides broad access to more than 50 countries with which Mexico holds free trade agreements and nearshoring proximity to the U.S. demand for plastics materials. 

To better understand how your specific product offerings can serve this broad market, talk to an experienced expert. Tetakawi’s experts can help support your plastics manufacturing operation and provide the insight you need for a cost-effective launch in Mexico. 

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