“We see an exciting future for fluoropolymers” - Andres Mugica

By Antonio Torrisi
Published: Tuesday, 30 December 2014

Andres Mugica, director of leading fluorspar producer Mexichem Fluor, speaks to IM about the challenges facing the fluorspar and fluorochemicals market and discusses how Mexichem Fluor is positioned to deal with these.

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Andres Mugica, director, Mexichem Fluor
Mexichem Fluor


What are the biggest tasks and challenges you face as Mexichem Fluor’s director?

Andres Mugica: We continue to build our fully integrated global business and in this respect a big task will be to integrate all our operations and to globalise the chain. Other important activities include diversification in the fluoropolymer supply chain and in our refrigerants business, the transition to low global warming potential (GWP) solutions.

How will your previous managerial experience help you in the new role at Mexichem Fluor?

As I mentioned, one of our main tasks is the integration of the chain and the globalisation of the business and the team. In my previous roles I had the opportunity to work with global teams and operated in multicultural environments.

Which strategies are you planning to adopt to consolidate Mexichem Fluor’s leadership as a supplier? 

We are the world’s largest fluorspar producer, and we will use this position to continue growth in established downstream sectors. For example, we are developing new refrigerant products that will allow the transition to low GWP solutions.

Simultaneously we will continue to diversify our activities into other high potential downstream areas, such as the production of fluoropolymers and fluoroelastomers. 

What is your outlook for the refrigerant market worldwide?

The outlook is for the global market to grow, with a transition to low GWP products driven by regulations such as F-Gas in Europe. This means we will see a movement away from HCFCs and higher GWP HFCs towards products such as unsaturated HFCs, also known as HFOs, which provide similar performance benefits with low GWP. We are developing HFO solutions for a range of applications across the refrigeration and air conditioning industries.

The F-Gas regulations mean that as of 1 January 2015 HFCs sold in Europe must be done so through a quota system, of which Mexichem Fluor holds one of the leading shares. We intend to consolidate and build on such leading positions, alongside growing our activity in areas including Latin America, the Middle East and India. 

What are your plans in view of the recent verdict from the US International Trade Commission on China’s R-134a imports, which lifted antidumping and countervailing duties?

We are extremely disappointed with the verdict, especially as it ran counter to the previously proposed final resolution which stated that imports from China of R-134a should be subject to antidumping duties of 280.67% and countervailing duties averaging 11.14%. Based on the currently available information we are considering whether to appeal.

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Mexichem Fluor’s Las Cuevas fluorspar mine in Mexico  
Mexichem Fluor


How do you see China’s refrigerant imports impacting the US market?

We are in a similar market as before the preliminary verdict. We do have a strong position in the OEM market based on stable long term relationships.  Regarding the aftermarket, we are committed to supporting our customers and have requested their support to generate a balanced situation.

What are your plans for near-term future fluorspar production at Las Cuevas?

We will maximise the benefit of our production capacity, quality and reliability at Las Cuevas, both through our downstream business and through third parties. In this area we will increase our offer of fluorspar to a specific 

user profile by offering our state-of-the-art technology for arsenic removal in HF production.

What are your plans regarding fluoropolymers and fluoroelastomers? 

Both fluoropolymers and fluoroelastomers are an important part of our strategy, in particular for our activities in Latin America. We have recently appointed a new commercial director who will be responsible for the development of this business.

How do Mexichem’s recent acquisitions of HDPE producer Dura-Line and PVC producer Vestolit enable it to become fully integrated in the production of fluoropolymers?

Although aligned in terms of production with our chloro-vinyl business these acquisitions allow us to bring a broader offering to our downstream customers and allow us to meet their demand for fluorinated products.

When are you planning to enter production of fluoropolymers and will this depend on the completion of the new ethylene cracker in development through the OxyChem-Mexichem JV?

As indicated at IM’s Fluorspar 2014 Conference we will show activity in the fluoropolymer business in 2015, although not necessarily through production initially. This is not connected to the new ethylene cracker.

Fluorochemical producers expressed some concerns about sustainable supply of fluorspar in the long term future. Does Mexichem Fluor consider this an issue? 

We are committed to maintaining a stable, secure supply for our customers. Our position as a leading producer and the largest vertically integrated company in the sector means we are in a very strong position to continue to do so, representing a strong competitive advantage now and into the future. 

What is Mexichem Fluor’s view about the expected new fluorspar projects and how could these eventually become new competitors to Mexichem Fluor’s market?

We expect demand for fluorspar to grow so it is natural to see new projects. As outlined above, our leading positions in production and integration put us in an enviable position to deliver the best for our customers. On the other side, volume and cost of production has been and will be a major challenge for new competitors.

Where do you see the fluoropolymer market heading in terms of applications and geographic demand?

We see an exciting future for fluoropolymers.  Global fluoropolymer demand is growing due to the need for materials that can perform in increasingly demanding operating conditions.  Use is growing in automobile, electrical, electronics and chemical processing industries, and new applications are currently being developed, for example in energy and aerospace.  Considering these trends, we expect a healthy growth in the coming years across most regions.

What is your outlook for the production of AlF3 and other inorganic fluorides?

We have worked hard to make efficiencies across the aluminium chain and expect increasing demand for AlF3 looking to 2015. Automotive is a particular sector where we anticipate growth. 

What is the current metspar market trend and what is your outlook for the future?

Metspar continues to be an important sector for us, and is of course heavily linked to global manufacturing trends. This means there can be short term challenges but the long term view is very positive. We expect growing demand in the US as steel production increases, whilst we may also see China increasing imports.  

How do you see China’s position as a fluorspar supplier and consumer in the future? 

China has significant fluorspar reserves and will continue as a major producer, whilst it will also remain a major consumer as long as its economic growth continues. We are already seeing a tendency to reduce exports of fluorspar from China and an emerging demand for imports.  

How do you see FSA as a possible alternative route for HF supply to the fluorochemical industry and how could this impact fluorspar demand in the long-term future?

This technology has been around for some time, but the economics around its viability are complex.

Finally, what do you expect in terms of prices and which main factors will play a key role in determining a possible increase?

Demand across industries is healthy and will likely remain so. Our downstream integration means we are in the best position to ensure stability for our customers in terms of both supply and pricing.