At the Forefront of Compound Technology
Specializing in the design and development of fire retardant PVC, low-smoke zero-halogen, thermoplastic elastomer, and olefin compounds, Mexichem Specialty Compounds provides compounds for a variety of markets including wire & cable, data and telecom, medical devices, etc.
Mexichem is a leading provider of products and solutions across multiple sectors from petrochemical to construction, infrastructure, agriculture, healthcare, transportation, telecom and energy, among others. Mexichem Specialty Compounds was created from the combination of AlphaGary (acquired in 2011) with Mexichem’s Compounds business in Mexico and Colombia. Mexichem Specialty Compounds’ leading brands include Megolon LSHF compounds, Smokeguard low-smoke flame retardant compounds, Evoprene and Garaflex TPE compounds, and Garathane TPU compounds.
Mexichem’s other companies, viz. Dura-Line and Wavin are already present in India in the pipe and conduit segments. Mexichem Specialty Compounds is now trying to penetrate the Indian market, including wire and cable, with its Fire/Flame Retardant PVC, Low Smoke Halogen Free (LSHF), TPE materials, Olefin compounds, injection grade compounds as well as extrusion grade compounds. During the wire show in Mumbai, WCI interacted with Dr. Sameer S. Bharadwaj, President, Mexichem Specialty Compounds and Mr. Richard Day, European Sales Manager, Mexichem Specialty Compounds. Excerpts:
Richard Day: Mexichem is a large global petrochemical company with a strong presence in PVC resins, compounds, pipe and fittings and fluorine products.
In compounds, we are a leading supplier of FR-PVC and halogen-free compounds for the wire and cable market besides being a leading provider of products and solutions across multiple sectors (medical, construction, automotive etc.). Mexichem is probably one of the biggest suppliers of specialty compounds meant for the cable market; we serve the market for LAN cable and data cable compounds in a significant way.
We have recently folded all our brands under the Mexichem Specialty Compounds umbrella.
WCI: Coming to the name change, wasn’t the brand AlphaGary subsumed under the new name, i.e. Mexichem Specialty Compounds Ltd.?
RD: Mexichem Specialty Compounds is the umbrella brand for all of Mexichem’s compounds businesses including AlphaGary. To give you a brief overview, AlphaGary acquired Scapa Polymerics Compound’s brand Megolon which was the market leader at that time for the cable compounds. Mexichem then acquired AlphaGary in 2011 with all its leading brands.
Also, we now have a new president for Mexichem Specialty Compounds who is originally from India, Dr. Sameer Bharadwaj. He has fair experience of this market and is interested in expanding our reach in the Indian wire and cable market.
WCI: You were outsourcing before marketing products at your own in the Indian market. How has been experience so far? Any fresh strategies for this market?
RD: Yes, we were just outsourcing the marketing of our products before starting to market them on our own. Mexichem began the direct marketing 4-5 years back and the experience has been good so far. There are many companies in India, who may be our potential customers and the Indian wire and cable offers immense opportunities for our quality compounds.
We can’t share our strategies as of now. Our president joined just in August and our strategies for the market in India are still being developed.
WCI: Going forward, how do you see the Indian market from Mexichem’s expansion view-point? What about the competition in this market and how do you intend to beat that?
RD: The Indian market is expanding and there is increasing demand for halogen-free cable compounds, which are used extensively in Europe, the Far East and other parts of the world. Indian standards are rising and new standards are coming in to help the market grow in terms of new products and quality.
As for competition, yes, there are many companies, but these things are never easy. However, with the Megolon range of compounds, world-renowned for its quality, we will surely overcome this competition as these products are very good and have been trusted for many years. Also, most of the people in the market are aware of this product range.
Wire & Cable India: Did you think of any plan or strategy for Mexichem’s expansion in the Indian market?
Sameer Bharadwaj: I have recently joined as the President of Mexichem’s global compound business. Talking about compounds, it is today roughly a business of around USD 450-500 million for Mexichem and we have a strong market presence in America, Latin America and Europe. However, we have little presence in Asia; so, key to our strategy is global expansion with Asia as very high priority. Within the Asian expansion plan, India figures as number one on our list. The basic idea behind my present visit here is to meet clients and other compounders in the market and then answer the classic question whether we need to partner with somebody, make an acquisition, or grow organically. In all probability, it is going to be a mix of all of the above.
WCI: What made you consider India as your priority business market among other Asian nations?
SB: India is our main focus as it is one of the largest and fastest growing economies despite the challenges. Then we have China, which is also a great market but is going through a slowdown. We have an existing base in India with Dura-Line, a leading international manufacturer and distributor of communication and energy infrastructure products and systems including conduit, cable-in-conduit, pipe, and accessories owned by Mexichem. We also have three manufacturing plants along with several office locations. With this existing base, we would like to grow all other businesses of Mexichem in India.
WCI: How long has Dura-Line been in India?
SB: Dura-Line has been in India for a long time. Wavin has also been in India for a long time, which is also one of our brands; both were acquired by Mexichem in the last 5 years. With Wavin and Dura-Line, both acquisitions, we have been in India for more than 10-15 years. But going forward, I would like to see more significant activities in India from Mexichem.
WCI: How do you see the market for halogen-free compounds in India?
SB: I have recently joined the company. I am meeting customers and other stakeholders to understand industry requirements and also assess the regulatory environment, which is still in the early stages of development. I do hear that truly special and quality products are hard to source locally. India is still climbing the quality curve. Lots of commoditized goods are used today and the volume of specialty products used is modest but poised to grow significantly. So, we are going to figure out in next few months the kind of compounds the Indian market requires.
WCI: Going forward, what would be the strategy in the next 4-5 years?
SB: Our strategy would be focused on building a presence in the Indian market. We want to be among the top three and make Mexichem one of the leading compounding businesses globally. As far as India is concerned, the strategy is to participate in the growth and for that we will have to have local presence and by that I mean local manufacturing and local team; this is the direction we are looking in going forward.
WCI: Before joining Mexichem, were you in the wire and cable sector or compounding industry?
SB: Yes, to some extent. I was previously working with Cabot Corporation. I was responsible for strategy, marketing and new product development globally for Cabot’s performance materials business, which was selling specialty carbons, masterbatches and compounds into wire and cable applications, with a decent presence in India.
WCI: What is your present take on the Indian wire and cable industry and how is it going to grow in 5-10 years seeing the government initiatives and infrastructural growth, how do you see it coming?
SB: India is going to grow despite the challenges; whether it will grow by 6, 7, 10 or 15 percent is anybody’s guess. Also, if you want to play in India, you have to be here for the long term. So, when we invest, we have a long-term mindset without caring about the growth rate whether it will be 5 this year or 7 next year. So, if you are coming with a long-term mindset and are willing to wait for markets to develop then you will be rewarded in the long-term.
WCI: Are you looking for some joint venture or similar things?
SB: Yes, we are open for proposals as I said earlier the main question is whether we buy, or do a JV/partner, or build on our own.