Precision and Definition Achieved with Top-Class Polymers

Q: Considering REHAU’s wide variety of polymers, what distinguishes its product offering in Mexico?

A: Our specialty in Mexico is extruded polymer products that make up sealing systems for the roof, windshields, windows, and similar components. We are producing sealing systems for Volkswagen, Nissan, Infiniti, Daimler, Ford, and Chrysler, as well as various other platforms for each of our OEM clients. While our products may seem like simple pieces of plastic, they involve the combination of different materials and precise cuts in an automated manufacturing line. They also require some manual labor, which is why manufacturing in Mexico has given us a competitive advantage. Our products that are produced here are used in Mexico, but also sent to markets like the US, China, Russia, and Brazil.

Q: Which of your products represents the best growth opportunity for your strategy here in Mexico?

A: Besides Volkswagen vehicles, which have their own unique manufacturing processes, all cars require a roof ditch molding and a weather strip or beltline molding. The question is whether OEMs use thermoplastic elastomers (TPE), commonly known as polymers, or ethylene propylene diene monomer rubbers (EPDM). Rehau believes that polymers are the best, as they allow for more precise and defined geometries. The material can also be recycled, it is more ecological, and it is more lightweight than rubber, which is a big advantage as cars makers seek to lower the weight of their vehicles. OEMs are looking for trustworthy providers for similar parts, so there is a lot of potential in the polymer extrusions market. REHAU produces three main products: extrusions and sealing systems, exteriors, such as bumpers and spoilers, and blow-molded parts for the conduction of air and liquids. We might later on enter the Mexican market with more complex parts, such as bumpers, which we currently do not manufacture in this country. These are much more expensive compared to sealing products and such a project would multiply our operations, but they are very complicated to produce. Bumpers were once just a single piece of plastic, but now include headlights, indicators, sensors, cameras, and in some cases even the brand’s logo. For now, the Celaya plant will just provide our sealing extrusions product for the Americas, but if we have a request for bumpers in the future, the parts will be made here in Celaya.

Q: What are the distinguishing factors that define a high- quality polymer?

A: The polymer material itself does not necessarily present that much of a difference, but OEMs are very demanding, and expect precise delivery. They will not accept interruptions in their production rhythm, so all deliveries must be timely, and all minor details and product specifications must match their requests. Some luxury OEMs are willing to enter co- investment agreements if additional pieces of machinery are needed to obtain the utmost precision in the production process, or in the aesthetics of certain pieces. However, certain other OEMs are not that attentive to detail and will settle for less expensive processes. Luxury cars often have more complex designs, and the development of parts for these vehicles require state-of-the-art engineering, which is actually one of REHAU’s core strengths. We have the infrastructure that enables us to make products for luxury automobiles, but it would not be a competitive strategy for REHAU to remain exclusively in that niche. We need a segment that requires quality and volume in order to be competitive, be it in luxury cars or mass-market vehicles.

Q: How is REHAU approaching its immediate growth strategy in Mexico?

A: The company has been growing considerably, evidenced by the fact that we have recently purchased a significant amount of land that has given us enough room to quadruple our production. We now have a Mexican development and process engineering department in close coordination with our corporate organization, whereas all engineering was previously done in Germany and Detroit. Beyond this, there are no confirmed further investments, but we remain attentive to see if, in the future, we gather the necessary elements to generate them, perhaps in a bumper plant. Future investments will depend on our company’s overall success in different markets. Despite being a family-owned business, REHAU has become a rather large company. We have different plants around the world in places such as the US, South Africa, Germany, Hungary, and Czech Republic, so any new investment entails the dedication of a lot of resources. Even so, we remain hopeful that more projects will be developed in Mexico.