Hexpol Compounding Americas expects ‘mixed outlook’ for 2023

Malmo, Sweden – Hexpol Compounding Americas is seeing a mixed trend in demand in the region, with automotive industry in recovery mode, particularly in Mexico.

In its capital markets day 20 March, the Swedish group said it expects the automotive industry to grow 5.2% year-on-year in Americas, while industrial production will see a marginal decline of 0.4%.

Furthermore, energy markets reflect increasing US rig counts of 35% year-on-year, while supply to the overall infrastructure industry is set to grow, said Gary Moore
president of Hexpol Compounding Americas.

Meanwhile, labour challenges are likely to continue with part makers potentially prioritising fabrication.

In Mexico, Moore went on to explain, growth continues as Asian and European parts makers move towards brining fabrication capacity to the country.

The shift, according to the Hexpol official, will reduce length of supply chain while mitigating future issues related to freight and global events.

In such an environment, the Swedish group said localising of rubber compound mixing becomes a priority.

In addition to developments in Mexico, North America is also generally seeing growth in the production of electric vehicles with multiple projects currently underway for EV manufacturing.

“Hexpol is well-positioned to support recovery/growth in Americas,” Moore said, “with three facilities located in the heart of automotive growth."

Outside the car industry, the outlook for building and construction remains mixed with infrastructure investment in roads, bridges, water management, power management and green energy ongoing.

The infrastructure industry, Moore noted, will be supported by $1.2 trillion bipartisan infrastructure law and the $400-billion inflation reduction act.

However, Hexpol expects a "retraction" in housing in the region, with the market entering a ‘cool-off’ phase.

Overall, Moore said Hexpol was "well-positioned" to take advantage of current and future trends in the market such as the strong automotive and infrastructure growth as well as the recovery in the energy market.

Hexpol Compounding Americas operates 16 facilities in the US and Mexico, and contributes 55% of the Swedish group's total annual sales.