To be recognized by customers as the best supply option:
Mexichem aims to be the leader in the chemical industry through competitive pricing, cost reduction, and its ability to meet the needs of the markets it serves with quality products. Meeting these commitments enables it to manage logistical costs in each of its production and distribution processes and in its contact with the end consumer, adding to it the quality that characterizes the efficiency and performance of each of its products.
To contribute to the success of its customers:
Mexichem management believes that a competitive product is one that not only meets quality and price standards, but also allows the final customer to use it as a raw material or intermediate product, thus ensuring that the client receives the expected return on its cost-benefit calculation.
To be competitive internationally:
Mexichem manufactures and sells many of its chemical products on international markets primarily located in countries that are part of the North American Free Trade Agreement. In addition, the company operates in an increasingly global market. Therefore, we designed our production chains to reflect the needs of both domestic and foreign markets, including pricing, quality, and margins for issuers.
To keep its main lines of business and production chains vertically integrated:
Following the recommendation of its Board of Directors, in 2004 Mexichem changed its mission and strategic vision, and restructured its business, moving from a divisional operating structure to a vertically integrated business model comprising production chains. This restructuring allows us to allocate costs, benefits, risks, depreciation, and non-financial expenses to individual business units in each production chain and avoiding the generalization of processes that are essentially specialized, such as the Chlorine-Vinyl Chain and the Fluorine Chain. Mexichem is in a constant process of integrating business opportunities in the chemical sector by acquiring new businesses complementary to existing ones and developing new business units and technologies that complement existing processes or make them more efficient.
To have a motivated, qualified, and customer-focused staff:
At Mexichem, the business strategy that has proven effectiveness for the group requires competitive production standards and a policy of industrial relations and human factors that stresses continuous training of its employees and timely and quality customer service.
To be known for its social responsibility, with special emphasis on safety, health, and environmental stewardship:
Finally, production chainthe process of the production chain also requires, besides the trade, investment, and training policies described above, a deep commitment to compliance with environmental regulations that apply to each production chain’s processes. The chemical industry in general, and Mexichem in particular, operates in plants that require certification, verification, and auditing of environmental performance on a daily basis. At Mexichem, we believe that our duty is not only to comply with the law, but also to provide our employees a safe workplace and to protect the environment for the benefit of civil society as a whole.
Leadership as a low-cost producer
Mexichem, a leader in the markets it serves, is characterized by a strategy aimed at producing low-cost products by continuously investing in cutting-edge proprietary technology; integrating raw materials into its two main production chains; taking advantage of synergies in logistics, purchasing, computer systems, treasury, and human resources; and developing and implementing projects with ongoing cost efficiencies.
The only Latin American producer whose businesses are integrated with its basic raw-material production
Within its three main chains of production, Mexichem is the only raw-material producer whose businesses are integrated with its own basic raw-material output in Latin America. The Chlorine-Vinyl chain is integrated with respect to products as simple as salt, all the way to sophisticated plastic compounds. It has facilities for the manufacture of salt for industrial and human consumption, chlorine, caustic soda, chlorine derivatives, PVC resins, and compounds. In addition, its business is integrated with respect to the manufacture of plasticizers and its raw material, phthalic anhydride.
In the Vertical Integrated Solutions (Transformed Products) Chain, the Chlorine-Vinyl chain provides the main raw material, PVC resin. This chain thus has achieved total integration of businesses from raw material to final product.
Within the Fluorine production chain, the hydrofluoric acid process has its own fluorspar mine, the largest in the world, making it the only global producer that is fully integrated with its raw material. This integration gives Mexichem a unique competitive advantage both in Mexico and worldwide. Mexichem is the only company in the world whose production chain is fully vertically integrated, from the extraction of the fluorite mineral to the production of hydrofluoric acid and the refrigerating gases we make in America, Europe and Asia.
Economies of scale
In an industry of "commodities" such as the one in which Mexichem operates, economies of scale are a significant entry barrier for new competitors because size makes it possible to dilute fixed costs through higher production volumes and better margins.
The Chlorine-Vinyl Chain stands out for its own salt mine, the most important facilities for the production of chlorine and soda in Latin America, and the largest PVC resin production team in the region, as well as the largest infrastructure for the production of plastic compounds and plasticizers in Mexico.
The Fluorine Chain has the largest mine with proven reserves of fluorite and the largest mine worldwide, as well as the second most important plant for the production of hydrofluoric acid.
Selecting and positioning ourselves with strategic customers
Mexichem has long-term contracts with its main customers and domestic and foreign suppliers for the supply of products, which allows sustainable development. In turn, Mexichem has defined, in terms of growth potential and size, the market segments in which it wants to participate. In addition, by positioning itself through contracts with strategic customers operating in markets with high growth potential, it has achieved a distinct competitive advantage hardly matched by competitors.
Innovation in process technology and products
Mexichem has proprietary technology in its production processes that put it at the forefront of technology in its different production chains. These unique designs give us an edge over its global competitors. For example, in the Chlorine-Vinyl Chain, our conversion costs for PVC resin production process are lower than any of our competitors because of our advanced technology. The same is true for the hydrofluoric acid process in the Fluorine Chain, which has developed an advanced technology for the purification of fluorite. Mexichem also has an area of research and product development with a team and facilities that allow it to innovate in custom-tailored products.
Special products performance
Mexichem is also involved in the production and marketing of specialized products with special design and performance requirements different from those of "commodities." Mexichem can serve these niche markets because it can provide required specialized development and processes, creative solutions, and customer service. This allows Mexichem to actively participate in sophisticated and specialized segments such as the medical sector, which results in competitive advantages that no producer in Mexico and only a few in the world can match.
Procurement synergies
Production chains are at the core of Mexichem's operating and business strategy. Accordingly, Mexichem has completed the replacement of the old divisional format with vertically integrated production chains. Consistent with this approach, the group has made several investments in different subsectors of the chemical industry. For example, with the purchase of Química Flúor we created the Fluoride Chain, and when we acquired INEOS Fluor, this company was integrated vertically, resulting in benefits for the cost scale and for profit generation. Similarly, with the acquisition of Grupo Primex, SA de CV, the Chlorine-Vinyl Chain was strengthened and the volume of production and sales was significantly increased, which allowed Mexichem to become a group leader in its market.
