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Because Alpek and Orbia, Mexico's two largest listed chemical companies, source much of their feedstock from low-cost producers on the US Gulf Coast, they were able to take advantage of soaring spreads for products such as PVC, polypropylene and polyester.
"We benefited significantly," Sameer Bharadwaj, CEO of Orbia, said on an investor call on July 23. "The supply curve to PVC became very steep because of the increase in prices of oil and naphtha, and we had a cost structure off the US Gulf Coast."
"Throughout the quarter, the Middle East conflict continued to impact global supply, leading to trade disruptions," Alpek CEO Jorge Young said in a call on the same day. "Our business units were able to resolve all raw material supply challenges while growing and diversifying our customer base in key markets."
Mexico City-based materials group Orbia Advance Corporation, previously known as Mexichem, is one of the world's largest producers of PVC. In Q2, EBITDA from its plastics business rose by 82% to US$144 million (mn).
Monterrey-based polyester and plastics producer Alpek reported a fourfold rise in EBITDA to US$407mn and almost doubled its guidance to the full year.
Alpek is the largest domestic supplier in the Americas of PET resin and expandable polystyrene (EPS). It is Mexico's only domestic supplier of polypropylene.
As well as higher margins, Alpek increased sales volumes of plastic resins as customers looked to lock in new sources of supply.
"We are ending up with a larger and also a greater diversified customer base," CEO Jorge Young said.
Stronger
The two companies, which both suspended dividend payments in 2025, say they will consumption the bonanza to pay off debt and enhance their stability sheets.
Alpek has also increased its capex guidance to the year from US$130mn to US$150mn, mainly to accelerate an increase in its production capacity in Mexico of specialty grades of polypropylene. The project represents a US$70mn investment.
(The original version of this content was written in English)
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