Plastics Manufacturing in Mexico Reduced Risk. Reduced Cost.

The plastics industry in Mexico contributes 0.4% to the country’s GDP and 2.6% to the country’s manufacturing GDP.

Mexico is the eleventh producer and twelfth plastics consumer in the world. Also, it is a leader in recycling in Latin America, recovering more than 50% of the Polyethylene terephthalate (PET) that it uses.

The plastics industry in Mexico is present in more than 385 municipalities distributed throughout the 32 Mexican federal entities.  The link that the plastics producers in Mexico have to the world beyond the country’s borders is also especially relevant. The increase in production and imports is in line with increased consumption. Additionally, the sector has a high economic impact on the manufacture of countless products that are produced by both domestic and foreign-based companies.

In the world ranking by country, Mexico ranks twelfth in plastics consumption and eleventh in production, with 7 million tons per year and a sustained growth rate of 4.8% since 2009. Such is the importance of the plastics sector in the country that contributes 0.4% to GDP and 2.6% to manufacturing GDP. 

The plastics industry in Mexico has generated more than 260,000 direct jobs and over 500,000 indirect jobs. Mexico’s plastics industry has continued to grow in recent years.  This expansion has been particularly driven by the packaging sector, especially for use of food and household appliances products. 

In 2020, however, growth in Mexico’s plastics industry was weaker due to the slowing domestic market caused by the negative effects on the world economy caused by the coronavirus pandemic, and the renegotiation of NAFTA, now the USMCA.  Negotiation of the new treaty hampered growth in some plastics manufacturing sectors. An improvement is expected in the coming years as these uncertainties dissipate.

Mexico imports about half of the plastic that it consumes, and this proportion is expected to increase, as one of the most imported plastics is resin.   This material is a critical component that is used to manufacture products such as plastic bags, films, sheets, toys, tubes, etc.  The needs of a growing domestic plastics market partly explain the dynamics of imports, thus increasing the supply available.

Among the main destinations of Mexican exports, it is worth highlighting the dominant role played by the United States, which is the recipient of approximately a 76% share of the country’s exports.  The plastics industry in Mexico currently exports 92% of its plastics manufacturers to a total of 15 countries.

In terms of imports, the United States again occupies the first position with a clear advantage over other supplier countries.  It registers 66% of the total value. China, South Korea, Germany, Japan, and Canada are the following countries from which Mexico imports plastics goods.  Currently, the top 15 in the import rankings make up 95% of the total value of plastic items entering the country.

Principal Industry Actors

4,580 economic units make up the plastics industry and resin production in Mexico.  The manufacture of plastic products (SIC Code 3261) is distinguished by being one of the five industries that have the lowest rate of economic concentration: although the eight largest companies account for approximately one-fifth of the gross production value.

Sixty percent of manufacturers in the plastics industry in Mexico are micro-enterprises (less than 10-20 employees), 24% are small, 12% are medium and the remaining 4% are large companies. The use of plastics is present in high-weight activities in the economy such as the construction, the manufacture of electronic components and household appliances, vehicle parts, packaging, and packaging of food and pharmaceutical products, among others.   Moreover, the plastics industry in Mexico is part of the value chain of many products that are widely used such as textiles and footwear.

Additionally, the Mexico plastics industry has furthered the growth of others such as chemicals, resin manufacturing, and synthetic fibers and petroleum derivatives. By process, 48% of the country’s plastics industry is packaging-oriented, 24% is dedicated to general consumption, followed by construction with 12%, electronics 6%, automotive 4%, agricultural 2%, medical 1% and others (remaining 3%).

Of the 12 activities grouped by the SIC Code 3261 related to the manufacture of plastic products, the production of bags and flexible plastic films; the manufacture of plastic auto parts; and the manufacture of bottles are the three of the most economically significant due to their contribution to the national production of plastics.