Orbia loses sales due to illegal imports to the EU

The Mexican company Orbia (formerly Mexichem) reported that it was impacted by illegal imports of refrigerant gases to the European Union in the first quarter of 2020.

These imports limited the performance of its downstream business, an effect that did not appear during the same period last year.

During the first quarter of 2020, sales of its Koura (Fluor) business decreased 11% compared to the same quarter of the previous year, reaching $ 182 million.

The Koura Business Group has its own fluorite mine, the largest in the world, with Orbia being the only global producer that is integrated towards its raw material.

This integration gives Orbia an unmatched competitive advantage, not only in Mexico but even worldwide. Orbia is the only company in the world that has its vertically integrated value chain, from the extraction of fluorite, through hydrofluoric acid, to the production and sale of refrigerant gases in America, Europe and Asia.

Orbia and imports

The EBITDA reported in Koura in the first quarter of 2020 decreased 21% to $ 68 million, this reduction was mainly due to illegal imports of refrigerant gases to the European Union. The EBITDA margin was 37.2%, compared to 42.0% in the first quarter of 2019.

In general, during the quarter there were significant negative impacts on Koura’s business, due to illegal imports of refrigerant gases to Europe and the coronavirus in Wavin Latin America; partially offset by the decrease in the cost of raw materials, an improvement in productivity and the devaluation of some currencies.

The Koura business group operates through long-term contracts to supply acid-denominated fluorite in dollars with international clients.

The company believes that, given its global scale, it should allow it to explore opportunities within the fluorochemical industry with a greater number of value-added products, either through joint ventures with established producers or through direct acquisitions.

Orbia is a leading provider of products and solutions in multiple sectors, from petrochemicals to construction, infrastructure, agriculture and irrigation, health, transportation, telecommunications and energy, among others. It is one of the largest producers of plastic pipes and fittings worldwide.