Alfa SAB — Petrochemical & PMI Cycle

Alfa SAB is a Monterrey-based Mexican conglomerate operating through two primary subsidiaries: Alpek (petrochemicals — PTA, PET, polypropylene) and Sigma Alimentos (refrigerated food — cold cuts, cheese, yogurt, packaged meats). Listed on BMV, Alfa provides exposure to the petrochemical PMI cycle through Alpek and the Mexican/US consumer spending cycle through Sigma. The company has been simplifying its structure — divesting Axtel (telecom) and Nemak (automotive aluminium components) to focus on these two core businesses.

Alpek: The Petrochemical PMI Link

Alpek is Latin America's largest PTA (purified terephthalic acid) and PET resin producer — supplying PET to soft drink bottle manufacturers, polyester fiber to textile producers and polypropylene to packaging producers across the Americas. Alpek's margins track the PTA-PET spread cycle — driven by US and Latin American PMI, oil prices (naphtha feedstock) and Chinese PET export pricing. When US manufacturing PMI is above 52 and consumer beverage production is growing, Alpek's margins expand.

Sigma Alimentos: Mexican Consumer Staples

Sigma is one of Mexico's largest food companies — producing FUD, San Rafael and Bar-S cold cuts, cheese and packaged meats for Mexican, US and European markets. Sigma's revenues are relatively defensive — consumers continue buying cold cuts and cheese even in downturns. However, margins are sensitive to pork and beef input cost cycles and to Mexican peso/US dollar dynamics for exports.

USMCA Integration: The Cross-Border Story

Both Alpek and Sigma benefit from USMCA (US-Mexico-Canada Agreement) — selling products across North American borders without tariffs. Alpek's US PET sales and Sigma's Bar-S brand in the US both depend on USMCA market access. Any USMCA renegotiation or US-Mexico trade friction is a key risk for Alfa's North American earnings.

Simplification: Focus on Core

Alfa completed the spinoff of Nemak (automotive aluminium) and sale of Axtel — reducing complexity and allowing investors to access pure-play Alpek (petrochemicals) and Sigma (food) exposure. The simplified structure improves management focus and may unlock valuation discounts that conglomerates typically suffer.

Cycle Performance Summary