Lamosa 2017 Annual Report

Adhesives

The year of 2017 was challenging for the Adhesives Business, largely because of the uncertainty arising from the election results in the United States and the beginning of the renegotiation of the North American Free Trade Agreement.

The segment also faced significant increases in the price of some of its main feedstocks, such as gasoline and cement, with the latter even undergoing percentage price hikes in the double digits.

Despite slow industry growth and keen market competition, the Adhesives Business’s operating results grew solidly in 2017, with annual sales totaling $3,753 million pesos, 9% above 2016.

In order to maintain and assure the company’s competitiveness, during the year the segment implemented initiatives to continue optimizing its cost structure and enhancing product quality. The resulting high-performance products and superior service are variables that clearly distinguish Grupo Lamosa as the market benchmark.

A significant achievement of 2017 was the consolidation of the business’s commercial structure and management across Mexico, in order to enhance customer service. For example, systems and tools to give the sales force real-time, in-field information were introduced to improve the segment’s commercial responsiveness and thereby benefit the customer.

Throughout the year, the Crest Evoca and Proyecta Perdura programs were continued, enhancing relationships with outstanding architects and construction companies across domestic markets. The Adhesives Business also organized a large number of events and presentations in Mexico’s main cities. With the participation of more than 900 building professionals, these initiatives provided a platform to promote the segment’s products and explain their performance.

In order to continue promoting its different-brand products, the Adhesives Business took part in fairs and exhibitions both in Mexico and abroad, including: Expo Coverings in Orlando, Florida, in the second quarter of the year; and Expo CIHAC in Mexico City in the second half of the year.

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New and innovative products launched in 2017 included the high performance spray adhesive Admaster Niasa, ideal for installing surface panels on the walls and ceilings of new buildings and remodeling projects. With a wide range of benefits, it is fast and easy to use, clean and waste-free.

During the year, the segment continued its efforts to come ever closer to installers by offering workshops and seminars across Mexico, such as Installer Day in Mexico City during the second quarter of the year. More than 2,000 professionals took advantage of this opportunity.

Some of the Adhesives Business’s most significant events in 2017 were the celebration of the 60th anniversary of the launch of Crest, and the 50th anniversaries of the Perdura and Niasa brands. The segment’s more than half a century of experience in the construction industry serves to underscore the quality of its products.

The Adhesives Business will face significant strategic challenges in the future. However, its ability to continue leveraging opportunities in Mexico and expanding in foreign markets will, without doubt, open up major avenues of growth in the short and medium term.