Insperia

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Plastics & Chemicals

GRI

Organizational Profile | Primary brands, products, and/or services | FULLY

Organizational Profile | Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries) | FULLY

Environmental | Initiatives to reduce greenhouse gas emissions and reductions achieved | FULLY

Our Plastics and Chemicals segment integrates the production and marketing of polypropylene (PP), expandable polystyrene (EPS), polyurethanes (PURs), caprolactam (CPL) and ammonium sulfate (fertilizer), among other products. We are the only producer of PP and CPL in Mexico and, following the acquisition agreement with BASF, will become the largest EPS producer in the Americas.

PP, a plastic made from propylene, is widely used in containers and packaging for food and consumer products. Other applications include auto parts and medical instruments. EPS is commonly used in packaging for impact-sensitive products, such as televisions and other consumer electronics. Construction and thermal insulation are also common EPS applications. CPL is the main raw material for the production of Nylon 6, used in the manufacture of clothing, industrial textiles, engineering plastics and tire cord, among others.

The Plastics and Chemicals segment has an annual installed capacity of 1.0 million tons in five plants, all of which are located in Mexico, and are operated by a workforce of 1,209.

Although 84% of the segment’s sales are for the NAFTA region, we also have a market presence in Central and South America, Asia and Europe.

The most noteworthy event of 2014 was the signing of agreements with BASF to acquire its EPS operations and sell our polyurethane business. In addition to strengthening our Plastics and Chemicals portfolio, this transaction is an attractive opportunity to leverage the sound operational track record of our team and expand our presence to become the leading EPS producer in the Americas.

In 2014, Plastics and Chemicals contributed 27% of Alpek’s total income. The segment posted sales of US $1.7 billion, 3% higher than 2013, due to a combination of increased volume (1%) and average price (2%).
Plastics and Chemicals EBITDA was US $159 million, 12% less than the previous year. The decline mainly reflects a high comparative base in 2013, a year in which, driven by favorable market dynamics, EPS and PP margins reached record levels, returning to normal during 2014. CPL margins also declined due to the highly volatile price of benzene and the recent increase in Chinese production.

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