Mexico: how it become the world’s fourth-largest PU market

The PU sector of Mexico is steadily growing thanks to ever-improving local economics and continuing stable demand from major consuming industries, which is aided by the trend towards nearshoring. 

Despite the traditionally tough economic environment in Mexico, the PU sector of the country has achieved serious progress in recent years – both in terms of revenue and output – and is currently one of the most developed segments of the entire Mexican industrial sector. 

One of the reasons for this is because Mexico is the North American region, whilst also neighbouring Central and South America. Not to forget its proximity to the US – which has been a vocal proponent of nearshoring, one of the major growth drivers in recent years. 

In recent years the increase in demand and the steady growth of PU production in Mexico has allowed the country to become the world’s fourth-largest PU market overtaking its major Latin American rival – Brazil – while its position is strengthening because of the ongoing growth of the market. At present the overall value of the market is estimated at MXN 2.5bn (US $160m). The Mexican market accounts for 8% of the entire Latin American PU market. 

The ongoing market growth is also confirmed by the latest statistics of Mexico’s National Association of the Chemical Industry (ANIQ) which state that in Q1 2024 the demand for PU in the country grew 8% compared with the same period the previous year.

The leading PU-consuming industries in Mexico are automotive, construction, furniture, appliances and HVAC.

It is expected that the trend of nearshoring will create major new PU hubs within the country. One example is the city of Monterrey – the capital and largest city of the northeastern state of Nuevo León – which has recently made headlines thanks to Tesla’s plan to invest US $5bn to build a new factory there. With more than a hundred projects in the pipeline, the city of Monterrey saw construction of new industrial buildings with a total area exceeding 1.5m square meters in the last year alone. Consequently, there are also major plans for building new residential properties in the city, which, according to some local analysts, could make the city as one of the major consumers of PU insulation products over the next few years. 

The arrival of Western investors in major Mexican cities has prompted changes to existing construction codes, with a greater emphasis placed on energy efficiency – improved thermal insulation in residential, commercial and industrial buildings – which means increased use of polyurethane materials. 

Looking at the automotive sector in general, Mexico has become an automotive hub of global significance – the sector now accounts for up to 6% of the country’s GDP – and with the increasing trend towards electrification, the sector will remain a large consumer of PU for years to come. 

According to latest data of the Mexican National Institute of Statistics and Geography (Inegi), in 2023 the year-on-year growth of automotive production in the country was about 13%. Most analysts expect this output will increase in 2024, further contributing to the growth in demand for PU auto applications. 

Other drivers of PU consumption in Mexico in 2024-25 include population growth, the increased use of PU in packaging to improve the shelf life of food (to combat food waste), a general trend towards energy efficiency, and new forms of mobility.
Because the level of urbanisation in the country is growing, many people are abandoning the countryside for the city – a lifestyle change that requires increased food preservation because of the extended route from farm to fork.

The Mexican PU sector has always been within the sphere of interest of global majors, many of which have strengthened their positions in the local market, whilst also planning future expansion in the region.

One such company is Covestro. Isauro de la Fuente, Covestro’s head of sales and market development, PUR solutions North America, told Urethanes Technology International (UT), that the Mexican PU market remains one of high priority for the company: “The polyurethane market is important for Covestro in Mexico. Our main applications are rigid polyurethane foam for refrigerators and flexible polyurethane foam for mattresses and furniture, as well as applications in the automotive industry. 

“In recent years, Mexico has become an attractive destination for nearshoring. Mexico's proximity to the United States and Canada, coupled with its competitive advantages, has made it a prime location for companies seeking to optimise their supply chains and reduce costs. As a result, some auto parts manufacturers, as well as furniture and appliance manufacturers have also expanded their production in Mexico. So we will explore opportunities for sustainable growth in these key markets to provide solutions to our customers' demands.”

In the meantime, another global major – Carpenter – is also developing its activities in the Mexican PU market, again citing Mexico’s proximity to the US and Canada markets. In an exclusive interview with UT, Carpenter’s president and CEO, Brad Beauchamp, said: “The PU market in Mexico continues to evolve. The location within the North American region and the favourable labour conditions, make this a market that should grow for end use products such as automotive, furniture and bedding as well as other industrial uses that consume polyurethanes. We continue to view Mexico as a market that will grow at faster than regional GDP rates.” 

In general, the Mexican PU market comprises a mix of regional and international players. Regional companies still control a large part of the market but major international companies are gaining ground because of their greater experience, advanced technology and international footprint. The major regionals include Productos Eiffel and Química Sagitario, while the largest foreign players (apart from those mentioned above) include BASF, Dow and Repi. 

Mexico has become an increasingly important market for Chinese producers. Last year Jiahua Chemical announced an investment of US $20m in the construction of a new plant in Ramos Arizpe, Coahuila. The plant is expected to go online later this year, with most of its output expected to supply the burgeoning automotive sector.

The geographical distribution of producers is linked to the coverage of the industrial regions that generate demand. For example, in the northern region (Nuevo León, Coahuila, Tamaulipas), a high presence of the automotive and manufacturing industry generates a strong demand for PU applications such as thermal insulation, high-density foams and automotive components. In the central region (Mexico City, Puebla, Querétaro), the industrial diversity of the region –including sectors such as construction, furniture, and appliances – drives the demand for polyurethane systems for various uses, including comfort foams and acoustic solutions. Finally, in the Bajío Region (Jalisco, Guanajuato, Aguascalientes), the concentration of manufacturing industries, especially in the automotive, furniture and household appliances sector, generates a high demand for PU for applications such as thermal insulation, structural foams and automotive components.

Most of the interviewed producers and analysts expect innovation will be the engine that will trigger further growth of the Mexican PU industry. In this case, particular hopes are put on products and PU solutions with decreased environmental impact. Engineer Jorge Lemus, who is technical director of new projects at Productos Eiffel, one of Mexico’s largest PU producers, told local news source En Concreto Multimedia that the industry is in a transition process and is moving towards the fourth generation of foaming agents, with the objective of reducing global warming by 2030, and eliminating ozone depleting substances in line with the Montreal Protocol. 

Most analysts and producers predict overall demand for PU applications will continue to grow in Mexico during the period of 2024-2025. 

Isauro de la Fuente expects a steady demand for PU in most large consuming industries, mainly because of nearshoring: “This applies especially to the automotive industry, which has seen considerable investment recently. Along with the growth in such main customer industries (like auto and appliances), we expect to continue to grow ourselves above GDP projections.”

Analysts expect growth in the industry to be in the range of 5-7%. That will also be insured by the potential for growth in exports of PU-consuming products. According to data provided during UTECH Las Américas 2023, Mexico is the world’s second-largest exporter of air conditioners, the third-largest exporter of washing machines and stoves, the fourth-largest exporter of automobiles, the fifth-largest exporter of mattresses, and the ninth-largest exporter of footwear.

UTECH Las Américas returns to Mexico City in June 2025. The exhibition is co-promoted by Crain Communications, the publisher of Urethanes Technology International.