Martín Toscano

Evonik is pursuing various initiatives in Mexico to further expand its capabilities, including more applied technology and eventually R&D activities, to meet the demands of its clients and add more value regionally.

What steps is Evonik taking to further strengthen its portfolio and support the transformation of the Mexican market?

At Evonik, we continue to strengthen our focus on specialty chemicals and making sustainability the backbone of Evonik’s purpose and strategy, setting the frame for next generation Evonik. We see profitable growth and assuming responsibility as two sides of the same coin: the key growth driver, which is our handprint, and saving resources, which is our footprint. In this case, we aim to reduce our footprint in all our sustainability focus areas with measurable set of KPIs in place: fight climate change, drive circularity, safeguard ecosystems, and ensure health and well-being. Next-generation technologies will lead the way for footprint reduction. In Mexico, we are keen to pursue certain specific activities to expand our capabilities, including more applied technology and eventually R&D activities to satisfy an increasing local demand by our clients, supply chain excellence, and more added value regionally. We are part of the North American business platform of Evonik Industries, where we have a strong and robust manufacturing network, and certainly our competitive advantage regionally. Our role in the Mexican market is to be highly agile, competitive, and efficient through our supply chains to Mexico. As a company in Mexico, we also benefit from an extensive number of free trade agreements in place where we of course also leverage Evonik’s own global network.

What main growth opportunities has Evonik identified in its sectors of operation?

Mexico is a regional and global platform for manufacturing mainly to support export markets. In this respect, evidently, there are business lines that have a much greater specific weight for us locally that are highly connected to manufacturing and exports, and other business lines that are indirectly benefiting the economy by increasing investments in the country and creating a positive social impact while generating jobs. The automotive sector accounts for probably more than 15% of our sales in Mexico. The animal protein and nutrition business is another example, as is agriculture. The personal care industry shows a potential for substantial increase in per capita consumption. In economies like Mexico, there is a direct correlation between income and the level of spending on food and personal care. Meanwhile, the manufacturing sector indirectly also has a positive impact on the Mexican economy. Increased income levels among the employed translate into greater disposable income for a more diverse food basket, with greater consumption of protein or products, whether personal care or home care. Clearly, Evonik has considerable direct or indirect participation in the wider economy.

What could be done to promote the development of Mexico’s industrial sectors?

The current trends are setting the ideal scenario for Mexico to capture and capitalize further growth, such as shifting value chains globally, more sustainable supply chains, the nearshoring and China+1 agenda and the human capital. A growing market size for the chemical industry to support those trends, the geographic location and free trade agreements of Mexico, and hopefully a clearer strategy together with local authorities on renewable energy and sustainable practices. Human capital, diversity and inclusion, social impact of investments for a more robust Mexican society play also a key role.

How likely is Evonik to maintain its growth levels in 2023?

Even during the around 3-year pandemic, we have observed highly positive results in Mexico, beyond the mere price or financial dimensions of our business and volume growth. Markets will eventually normalize the supply and demand dynamics of the chemical industry, and we will be able to benefit from the significant volume growth of our business over the past three years. I therefore expect substantial growth in 2023. From the point of view of investment and growth, as far as production, manufacturing, and the various industrial sectors are concerned, we are in a more resilient position than in the past.