Report
2024
Annual
Annual
Integrated
Table of
Contents
1
MARKET PRESENCE
ALPEK IN OUR DAILY LIVES
STRATEGY
CORPORATE GOVERNANCE
MANAGEMENT TEAM
RISK MANAGEMENT
OPERATIVE FRAMEWORK
MATERIALITY
ESG MODEL
CODE OF CONDUCT
CYBERSECURITY
FINANCIAL HIGHLIGHTS
POLYESTER
PLASTICS & CHEMICALS
RATINGS AND CERTIFICATIONS
ALLIANCES AND
COMMITMENTS
GLOSSARY
ALPEK’S FOOTPRINT
APPROACH TO
REPORTING
ALPEK'S TEAM
QUALITY OF LIFE
DEI
OCCUPATIONAL SAFETY
HUMAN RIGHTS
SUPPORTING COMMUNITIES
VALUE CHAIN
CLIMATE CHANGE AND NET
ZERO STRATEGY
ENERGY AND EMISSIONS
WASTE MANAGEMENT
BIODIVERSITY
WATER MANAGEMENT
INNOVATION AND
SUSTAINABLE DEVELOPMENT
CIRCULARITY AND PRODUCT
RESPONSIBILITY
3
68
5
136
6
11
20
61
39
47
52
192
2
Message from
Management 2
2024
Highlights
3
About
Alpek
4
2024
Performance 5
Alpek's
Governance 6
Alpek's
People
7
Social
Impact
8
Natural
Capital
9
Financial
Review
10
Annexes
11
Consolidated
Financial
Statements
Contact Us
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Message from
our Management
At the end of 2023, we launched a comprehensive strategy which we continue to execute
throughout 2024, designed to enhance our competitiveness and financial performance. This
strategy focused on two key priorities:
1 Optimizing our operational footprint and cost structure
Throughout the year, we successfully executed structural initiatives that generated
approximately $75 million in annualized savings. These efforts included: footprint op-
timization within the Polyester segment, a business-wide organizational restructuring,
and improvements in energy supply conditions.
Additionally, in the fourth quarter, we announced a new initiative in our Plastics &
Chemicals segment by closing our EPS facility in Beaver Valley, a measure projected to
yield $20 million in annualized savings by mid-2025. In total, once fully implemented,
our cost-savings projects are expected to generate approximately $100 million on an
annualized basis.
Dear Shareholders,
In 2024, Alpek successfully navigated the challenges of a glob-
al petrochemical industry facing persistent oversupply and
margin pressure. As a result, our Comparable EBITDA reached
$699 million, exceeding both our original and revised guidance
by 17% and 4%, respectively. Our stronger performance was
mainly driven by better margins, as we were able to capital-
ize on temporary effects from higher-than-expected freight
costs, and a successful implementation of our structural cost
reduction program.
As a company familiar with industry cyclicality, we have taken
proactive measures to strengthen our financial position and
operational efficiency. This strategic approach not only enabled
us to withstand the current landscape but also position Alpek
to seize opportunities, as market conditions improve.
GRI: 2-22
TCFD: Governance
This message highlights
the key developments that
contributed to Alpek’s
success during 2024.
Álvaro Fernández Garza
Chairman of the Board
3
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
2024
Highlights
About
Alpek
2024
Performance
Message from our
Management
2 Strengthening our financial position
Given our commitment to financial discipline, free cash
flow generation has always been a top priority. In 2024,
we focused on a disciplined capital allocation approach
by prioritizing maintenance to keep our assets in optimal
conditions. Additionally, we implemented a series of stra-
tegic measures to optimize our net working capital needs.
Our strong financial performance translated into $104 million
in operating cash flow, enabling us to reduce our net lever-
age ratio from 3.4 times at the beginning of the year and a
peak of 3.7 times during the first quarter to 2.9 times by year-
end, bringing us closer to our target of 2.5 times. Throughout
this process, we maintained our investment-grade ratings
with a Stable outlook across all agencies. Moving forward,
we remain committed to further deleveraging and will con-
tinue implementing measures to achieve our target.
Spin-off from ALFA
A significant milestone in 2024 was the decision by our parent
company, ALFA, to proceed with the spin-off of Alpek. Under
this plan, Alfa is transferring its entire share ownership in Alpek
to a new entity to be listed on the Mexican Stock Exchange
(Bolsa Mexicana de Valores) as Controladora Alpek, S.A.B. de
C.V. To facilitate this process, Alpek approved the payment of an
extraordinary dividend. This decision was carefully evaluated
to ensure it did not compromise our financial stability. As a
result, Alpek achieved a 9% dividend yield, ranking among the
top three publicly traded companies in Mexico by this metric.
Once both entities are trading on the Mexican Stock Exchange,
there will be a proposal to merge them, thus creating a 100%
free float structure, enhancing stock liquidity and maximizing
our Shareholders’ value.
Over the years, we have consistently strengthened our position
as industry leader, focusing on creating value. Since becom-
ing a publicly listed company in 2012, Alpek has maintained
independent access to debt capital markets, ensuring finan-
cial flexibility and stability. Its robust corporate governance
framework further supports its ability to operate autonomous-
ly, while its talented team continues to drive innovation and
sustainable growth. These factors collectively position Alpek as
a self-sufficient entity prepared to navigate future challenges
and opportunities.
Our commitment to sustainability
Sustainability is a fundamental pillar of our long-term strategy,
and in 2024, we made significant strides in reducing our envi-
ronmental footprint, enhancing transparency, and strength-
ening responsible business practices.
One of our key achievements was a 32.4% reduction in CO2
emissions compared to our baseline, demonstrating our com-
mitment to decarbonization. We also accelerated our transition
to cleaner energy, increasing the share of carbon-free energy
from 27.6% in 2023 to 39.6% in 2024.
In 2024, our progress has been recognized by leading ESG
rating agencies:
Sustainalytics upgraded our risk rating by 23% to
a score of 20, placing Alpek in the top decile of its
industry. This improvement reflects our enhanced
disclosure of key environmental metrics and
expanded programs focused on employee safety,
integrity, and health.
MSCI raised our rating from BB to BBB, recognizing
our improved business practices and carbon emissions
performance, which surpasses the industry average.
Outlook
As we move into 2025, we are confident in our ability to nav-
igate the industry cycle by further enhancing our cash flow
generation and leveraging our position as a reliable supplier
as we anticipate continued challenges stemming from current
market conditions.
We will continue focusing on the implementation of addition-
al cost-reduction initiatives that strengthen our competitive
position. While challenges remain, we are optimistic about
the industry’s gradual recovery and Alpek’s ability to create
long-term value.
We are proud of what our team has accomplished, and we
trust that together we will continue building a stronger Alpek.
We would like to extend our sincere gratitude to our employees,
customers, suppliers, and Board members for their commit-
ment, as well as to our Shareholders for their continued trust
and support.
ÁLVARO FERNÁNDEZ GARZA
Chairman of the Board
JORGE P. YOUNG CERECEDO
Chief Executive Officer
JORGE P. YOUNG CERECEDO
Chief Executive Officer
4
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
2024
Highlights
About
Alpek
2024
Performance
Message from our
Management
Highlights
$75M
A n n u a l S a v i n g s f r o m
Cost Reduction Initiatives
2.9x
Leverage (from 3.4x in 2023)
9.0%
D i v i d e n d Y i e l d
32%
Scope 1&2 CO2e Emissions
Reduction vs 2019 (SBTi base)
10 sites
39.6%
Carbon-free Electricity
with 0 Recordable Incidents
5
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
About
Alpek
2024
Performance
2024
Highlights
We create the building blocks
our customers need to improve
everyday lives.
About
ALPEK
6
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
2024
Performance
About
Alpek
Alpek develops essential products and technologies to ben-
efit people’s everyday lives through constant innovation
and sustainable manufacturing. Alpek’s materials extend
from the daily food and medical industries to long-term
applications in housing and construction.
The Company continues to operate as a reliable domestic
supplier with a strong leadership team, optimized global
footprint, and enhanced operational efficiency to continue
delivering effective solutions to our customers.
Working to
meet global
societal and
environmental
everyday needs
has been, and
will always be,
essential to
Alpek’s purpose
and values.
GRI: 2-1, 2-6
7
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
2024
Performance
About
Alpek
Market Presence
9
C o u n t r i e s
Mexico
2,790 Kta
Canada
144 Kta
USA
2,568 Kta
Argentina
246 Kta
Brazil
1,136 Kta
Chile
28 Kta
Oman
1,072 Kta
Saudi Arabia
11 Kta
United
Kingdom
220 Kta
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
PET
PET
rPET
rPET
rPET
34
P
l
a
n
t
s
+5,500
Employees worldwide
# OF PLANTS
8
SAUDI ARABIA
UK
CANADA
USA
MEXICO
CHILE
BRAZIL
ARGENTINA
OMAN
FOR MORE INFORMATION, CLICK HERE
About
Alpek
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
2024
Performance
Alpek in our
Daily Lives
CONSTRUCTION | EPS
THERMAL INSULATION
HOSPITALS | PP
MEDICAL EQUIPMENT
ON THE GO | PP
FOOD CONTAINERS
HOMES | PET
PERSONAL HYGIENE PRODUCTS
9
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
2024
Performance
About
Alpek
Strategy
STRENGTHEN CORE BUSINESS
Global Cost Improvement
Drive competitiveness by optimizing efficiency,
leveraging scale and enhancing processes
Footprint Optimization
Ensure global production grows across optimal
sites & logistic networks
Value-added Products
Shift to products with higher margins
& barriers to entry
STRATEGIC & FOCUSED GROWTH
Value Chain Integration
Expand capacity strategically & integrate into the
value chain
Product Innovation
Develop and grow new products & business lines
(Natural Gas commercialization, Biovento®)
M&A Opportunities
Seize opportunistic growth focused on synergies
and geographic diversification
SUSTAINABLE GROWTH
OPPORTUNITIES
Foster Product Circularity
Improve the Company’s sustainable solutions
portfolio with a focus on mechanical and
chemical recycling and biodegradable products
Value-Creation in CO2 Emissions Reduction
Pursue opportunities & participate in new
markets associated with reaching carbon
neutrality before 2050
10
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
2024
Performance
About
Alpek
2024
Performance
11
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
VOLUME
(K TONS)
Financial Highlights
Polyester
Plastics & Chemicals
Others
Reported EBITDA
REVENUES (US$, MILLIONS)
2024
7,530
2023
7,759
2022
10,555
966
849
834
4,099
3,785
3,911
5,065
2022
4,635
2023
4,745
2024
COMPARABLE
EBITDA
(US$, MILLIONS)
823
497
464
1,396
2022
734
2023
699
2024
1,455
514
646
DEBT & LEVERAGE (DEBT US$, MILLIONS & LEVERAGE, TIMES)
2024
1,884
2023
1,729
2022
1,860
3.4
2.9
1.3
9.0%
D i v i d e n d Y i e l d ,
2.5x IPC average
1 0 4
Operating Free Cash
Flow (US $, Millions)
5
5
12
567
232
223
GRI: 201-1
12
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
ARGENTINA
BRAZIL
SAUDI ARABIA
OMAN
CANADA
MEXICO
UK
USA
Polyester
24
P
l
a
n
t
s
6,938
Thousand tons in capacity
Leading PTA, PET and
recycled PET producer
across the Americas
A leading PET
producer worldwide
3,766
E
m
p
l
o
y
e
e
s
13
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
GRI: 2-6
In the Polyester segment, 2024 began with reference margins
rising slightly and volume showing signs of recovery. Early in
the year, Alpek witnessed a slight demand increase despite
ongoing market overcapacity which set solid expectations for
the segment. During the first semester, results met original
expectations, with the second half benefitting from a rise
in ocean freight costs which led the Company to capitalize
on the improved regional margins resulting in a Guidance
revision in the third quarter and exceeding full-year results.
Asian PET reference margins remained stable, averaging $297
per ton, 4% lower than in 2023, yet increasing sequentially
from levels seen during 4Q23. Meanwhile, average Chinese
reference margins resulted in $159 per ton, down 15% from
last year. However, these remained stable with a slight upward
trend from lower levels seen during the third quarter of 2023.
Steady demand levels led to a volume increase in the seg-
ment, reaching 3,911 thousand tons, 3% higher compared to
2023. Full-year Comparable EBITDA resulted in $464 million,
down 7% from the previous year. Overall, performance re-
mained strong yet fluctuated primarily from extraordinary
conditions seen year-round.
Process Innovation: Alpek continues to optimize its
product portfolio, looking for alternative solutions to
meet current sustainable packaging trends.
Development of CaPETAll® during the year, creating
the first bottle cap to be made entirely from PET,
boosting bottle recyclability to 100%.
CASE STUDY:
Dairy Packaging traditionally features non-recyclable
aluminum lids and non-PET pots.
Our PET Sheet packaging technology offers a sus-
tainable alternative substituting this material with
high quality PET, making the product 100% recy-
clable.
Resistant to cracking when handled and processed
while providing the ideal moisture and oxygen trans-
mission for live cultured dairy products.
Longer shelf life compared to competitors.
In 2025, overcapacity will continue to play a role in the pet-
rochemical industry, however demand is expected to remain
stable. While it is foreseen that ocean freight costs will return
to historical levels, reference margins should remain in line
with 2024. Results will remain similar to those seen during
early 2024. Alpek is well positioned to be able to capitalize
on any potential opportunities.
Relevant Events:
Operational efficiency: During the year, the Company
completed the Organizational restructuring initiative set in
the Polyester segment which began in 4Q23. Through the
completion of this initiative, Alpek will be able to capitalize
approximately $40 million in annualized savings as part of
our Cost Reduction Program.
ADDED VALUE:
Global Footprint: Alpek is well prepared to adapt to
current economic and geopolitical conditions to con-
tinue serving customer demand by leveraging both its
domestic presence and global footprint as needed.
Circular Solutions: The Company maintains its lead-
ership positions by continuing to provide recycled
solutions for its customers.
14
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Plastics &
Chemicals
1 , 2 7 7
Thousand tons in capacity
1 0
P l a n t s
#1 EPS producer in
the Americas
ONLY PP PRODUCER IN MEXICO
Alpek produces
polypropylene (PP), expandable
styrenics (EPS), fertilizers and
specialty chemicals
1,652
E
m
p
l
o
y
e
e
s
15
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
The Plastics & Chemicals segment began 2024 maintaining
levels seen at the end of 2023 as the construction sector
remained under pressure impacting EPS results, while the
Polypropylene market in the region remained under pressure
from a ramp-up in installed capacity. However, as the year
went on, EPS reference margins saw a recovery, benefiting
from rising ocean freight costs alongside Polyester.
On average, EPS reference margins stood at 31 cents per
pound, 11% lower than the previous year, yet closing the year
at 43 cents per pound. North American PP reference margins
remained flat at 15 cents per pound throughout the year but
declined by 12% due to supply and demand dynamics.
However, demand remained consistent throughout the year.
This resulted in a total volume of 834 thousand tons, down
2% from last year, particularly impacted by temporary re-
strictions on water supply seen during the second quarter
at the Altamira facilities, which led to Comparable EBITDA
resulting in $223 million, 4% lower than 2023.
For 2025, Alpek anticipates a continuation of steady demand
in the segment, with a slight recovery for EPS, particularly
in the construction sector. It is expected that overcapacity
will continue to pressure relevant reference margins. Alpek
maintains its emphasis on operational efficiency, footprint
optimization, and additional cost saving opportunities to
continue enhancing its competitiveness.
Relevant Events:
Footprint Optimization: Alpek continued with the im-
plementation of its cost savings initiatives in the Plastics &
Chemicals segment, resulting in the shutdown of its Beaver
Valley plant and transferring its capacity to other more com-
petitive sites in the Americas. This will result in an additional
estimated $20 million in annualized cost savings.
ADDED VALUE:
Market Adaptability: Alpek maintains a diversified
portfolio, allowing it to capitalize opportunities in
different markets.
Sustainable Development: Innovation in recycled
and biodegradable EPS options have begun commer-
cialization, aligned with its sustainability track record.
Market Entry: Continuing to explore new markets
for unique solutions including the development of
Biovento®, a bio-based fertilizer, which began com-
mercialization during the year.
CASE STUDY:
Medical Applications: In the medical industry high
quality materials capable of meeting health standards
are required. Alpek’s various Polypropylene and EPS
products provide the necessary qualifications to meet
these demands and deliver safe and essential materials
for medical applications.
Vaccines, gowns and other textile applications are
made from PP, while coolers used to store these
vaccines and tissues are made from EPS.
Polypropylene is a material that can be sterilized to
obtain medical grade to ensure healthy applications
on a day-to-day basis, such as diapers, facemasks
and electrolyte beverages.
GRI: 2-6
16
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Ratings
Strategy & Execution
Alpek maintains an unwavering commitment to the highest standards of en-
vironmental, social, and governance (ESG) performance. To foster transpar-
ency and credibility among its stakeholders regarding its ESG performance,
Alpek actively engages with leading ESG rating agencies, who consistently
acknowledge Alpek as a benchmark within the chemical industry.
Progress 2024
During 2024, Alpek focused on improving key ESG topics such as governance,
waste management, and water stewardship. As a result of these efforts, Al-
pek achieved an improvement in its MSCI and Sustainalytics ESG ratings,
reflecting its commitment to transparency and continuous ESG performance
enhancement.
GRI: 2-27
TCFD: Governance, Risk Management
CSA S&P: 1.3
“Disclosure is far more
than a box to tick. It’s a
tool to see clearly, act
decisively and create
change. If we are to solve
the environmental crisis,
disclousure data must be
a tool every organization
- large or small - has in
their kit.”
SIMON FISCHWEICHER
CEO CDP
28
2024
ESG SCORE
(SCORE IMPROVEMENT YOY)
Chemical Industry’s Average Score
23
25
2022
54
2023
59
ESG RISK RATING
(RISK REDUCTION YOY.
THE LESS RISK, THE BETTER)
Chemical Industry’s Average Risk Percentile
19
27
31
2022
26
2023
26
2024
20
CLIMATE CHANGE
(SCORE IMPROVEMENT YOY)
Chemical Industry’s Average Score
B-
B
-
2022
B
2023
B
2024
B
WATER SECURITY
(SCORE IMPROVEMENT YOY)
Chemical Industry’s Average Score
B
BB
C
BB
-
BB
2022
C
2023
B-
2024
B-
ESG RATING
(SCORE IMPROVEMENT YOY)
2022
BB
2023
BB
2024
BBB
59
Chemical Industry’s Average Score
17
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Certifications
CSA S&P: 2.1.3
ISO
ISCC+
ISO
ISO 14001:2015
ISCC+ Certification
ISO 9001
Several Alpek facilities
across its business seg-
ments in Mexico, Brazil,
Argentina, Chile, and the
United States maintain
certification under the ISO
14001:2015 environmental
management system stan-
dard. This ongoing commit-
ment reflects the Company’s
dedication to environmen-
tal responsibility and con-
tinuous improvement in
sustainable operations.
ISCC+ is a globally recog-
nized sustainability certi-
fication that ensures the
responsible sourcing and
use of bio-based and circu-
lar materials, with a strong
emphasis on traceability. In
2024, Alpek obtained ISCC+
recertification for its sustain-
able expandable polystyrene
product line, further solidify-
ing its commitment to circu-
lar economy principles and
sustainable innovation.
Alpek secured ISO 9001 qual-
ity management system cer-
tification at multiple facilities
across its business segments,
including sites in Mexico,
Brazil, Argentina, and the
United States. This certifica-
tion encompasses the design,
development, manufacturing,
and distribution of its prod-
ucts, ensuring the highest
quality standards and rein-
forcing Alpek’s dedication to
operational excellence.
Strategy & Execution
As part of its corporate sustainability strategy, Alpek is committed to continuously adopting
and maintaining recognized social and environmental standards. These certifications en-
able the Company to integrate best practices into its operations while ensuring compliance
through external audits. This process helps Alpek identify opportunities for improvement,
driving ongoing progress in sustainability.
RESPONSIBLE CARE CERTIFIED
R e s p o n s a b i l i d a d I n t e g r a l
otorga el presente
a la empresa
Por haber cumplido los compromisos
derivados del Sistema de Administración
de Responsabilidad Integral.
Ciudad de México, 29 de Noviembre de 2024
Certificado RCMX-055624-1121
Vencimiento: Noviembre 21, 2027
Responsabilidad Integral
La Asociación Nacional de la Industria Química, A. C.
en su carácter de promotor del desarrollo sustentable
INDELPRO, S.A. DE C.V.
2026
2025
2024
In 2024, Alpek Mexico earned
the prestigious Responsible Care
(Sistema de Administración de
Responsabilidad Integral, or SARI
in Spanish) certification across
multiple business segments. This
globally recognized initiative with-
in the chemical industry fosters
continuous improvement in the
safe handling of chemical prod-
ucts, prioritizing health, safety,
and environmental protection.
18
Additional and detailed information for 2024 can be found in the Annex section.
2024
Performance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
Alliances & Commitments
GRI: 2-28, 2-29
CSA S&P: 1.5.1, 2.5.12
Alpek seeks to strengthen its alliances with entities and organizations that
promote sustainable development.
Alpek reaffirmed its commitment to the Sustainability Development Goals
(SDGs) by pledging to the Women Empowerment Principles (WEPs). It also
collaborated further with Science Based Targets Initiative (SBTi) and UN Global
Compact, inviting other companies in Mexico to join. Additionally, Alpek has
proactively collaborated with several recycling promoters as it continues to
build up its rPET portfolio.
In 2024, Alpek participated
in +85 associations and
initiatives.
Since 2021 Alpek has been
committed to the UN Global
Compact’s corporate responsibility
initiative and its principles in the
areas of human rights, labor, the
environment and anticorruption.
19
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Governance
Alpek’s
20
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Board of Directors
The Board of Directors, together with the Audit and Corporate Practices Committee, implement and maintain the best prac-
tices and highest standards of Corporate Governance in the Company. As a public Company, Alpek has the obligation to
keep its investors informed of all its financial activities under required standards, thus ensuring full transparency. Its Board
of Directors is Alpek’s highest governing body. Its members are chosen based on the alignment of their skills and previous
experience with Alpek’s strategic and ESG needs, as well as their integrity and standing in the global community.
Alpek’s Board Members and Top Executive Team lead a top-down approach across all sustainability efforts throughout the
Company. To ensure effective implementation of these initiatives, the Top Executive Team has appointed ESG Champions at
the business unit level. These champions, in collaboration with the Corporate Sustainability Team led by the Sustainability
Officer (CFO), have further developed Alpek’s ESG Strategy and aligned it with the Company’s business objectives
64%
Corporate Governance
of the Board
members are women
Independent
Board members
Proprietary directors
with no alternates
Directors
21%
9
14
5
of Alpek’s Board members
are independent, and
100% of the committee
members are independent.
GRI: 2-9, 2-10, 2-11, 2-12, 2-13
CSA S&P: 1.2
21
Additional and detailed information for
2024 can be found in the Annex section.
Alpek’s
Governance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Committees
Sustainability Committee
Alpek firmly believes that the success of its sustainability strategy relies on active engagement and strong leadership within
its top management. Through the implementation of a comprehensive organizational structure and the establishment
of periodic committees across management levels, Alpek ensures effective guidance, accountability, and stewardship of
its ESG material topics, risks, and objectives.
Audit & Corporate
Practices Committee
The Audit and Corporate Practices Committee supports the
Board, and is entirely composed of independent members.
They meet every quarter and oversee the following topics:
Selection and determination of fees for the external
auditor
Coordination with the Company’s internal audit
committee
Assessment of accounting policies, employment
terms and severance payments, as well as
compensation for senior executives
Recommendations for succession plans and
replacement options
ESG issues review
Annual meetings may be called by the Board’s chairman,
the Audit and Corporate Practices Committee’s chairman,
the secretary or at least 25% of its members. At least one
meeting is dedicated to defining the Company’s medium-
and long-term strategies. Any conflict of interest must be
disclosed by involved parties and they must abstain from
participating.
The Company has internal control systems with general
guidelines that are submitted to the Audit and Corporate
Practices Committee for its opinion. In addition, the
external auditor validates the effectiveness of the internal
control system and issues the corresponding reports.
The Board of Directors is advised by the planning and
finance department when evaluating matters related to
the feasibility of investments, strategic positioning of the
Company, alignment of investing and financing policies,
and reviewing investment projects. This is carried out in
coordination with the finance and planning department
of the holding company, Alfa, S.A.B. de C.V
Alpek has a department that is specifically responsible for
maintaining open communication with its Shareholders
and investors. This ensures that they have the financial
and general information required to assess the Company’s
progress in developing its activities. This function makes
use of press releases, notifications of relevant events,
conference calls for quarterly reports, investor meetings,
its website, and other communication channels.
Alpek promotes good corporate citizenship and adheres
to the recommendations issued by its holding company,
Alfa, S.A.B. de C.V. It has a mission, vision, values and a
code of ethics that are promoted within the organization.
GRI: 2-12, 2-13, 2-15
CSA S&P: 1.4.2
BOARD OF
DIRECTORS
C-SUITE
MANAGEMENT
Board
Meetings
ALL SUSTAINABILITY TOPICS*
Frequency: Quarterly
ESG Executive
Committee
ALL SUSTAINABILITY TOPICS*
Frequency: Quarterly
Circularity Committee
CLIMATE CHANGE
CIRCULARITY
INNOVATION
VALUE CHAIN MANAGEMENT
Frequency: Quarterly
Operations Committee
CLIMATE CHANGE
WATER
ENVIRONMENTAL MANAGEMENT
OCCUPATIONAL SAFETY
Frequency: Quarterly
IT Committee
CYBERSECURITY
Frequency: Bimonthly
* During Board Meetings,
sustainability topics are reviewed .
MEETING ATTENDANCE DURING 2024
95.7%
22
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Board of Directors
GRI: 2-9, 2-11, 2-17
Exceedingly Qualified Board of Directors
NAME
AGE
BOARD
TERNURE
CEO
EXPERIENCE
INDEPENDENT
INDEPENDENT
PROPRIETARY
RELATED
PROPRIETARY
PATRIMONIAL
AUDIT &
CORPORATE
PRACTICES
COMMITTEE
AUDIT & RISK
MANAGEMENT
OPERATIONS
FINANCE
PUBLIC POLICY
STRATEGIC
PLANNING
SUSTAINABILITY
INTERNATIONAL
COMMERCE
PETCHEM
CONSUMER
GOODS
AUTOMOTIVE
CONSTRUCTION
BANKING
ENERGY
AGRIBUSINESS
Mr. Álvaro Fernández Garza
CHAIRMAN OF THE BOARD OF ALPEK
57
14
Mr. Rodrigo Fernández Martínez
PRESIDENT OF SIGMA ALIMENTOS, S.A. DE C.V.
49
13
Mr. Armando Garza Sada
CHAIRMAN OF THE BOARD OF NEMAK
67
14
Dr. Ana Laura Magaloni Kerpel
PARTNER AT MAGALONI ABOGADOS
61
3
Mr. Francisco José Calderón Rojas
PRESIDENT OF FRANCA INDUSTRIAS S.A. DE C.V. AND FRANCA SERVICIOS S.A. DE C.V.
58
13
Mr. Andrés E. Garza Herrera
VICEPRESIDENT OF THE BOARD OF QUALTIA
57
13
Ms. Merici Garza Sada
INVESTOR
66
13
Mr. Pierre Francis Haas García
INDEPENDENT ADVISOR
73
13
Ms. Montserrat Ramiro Ximénez
COUNTRY MANAGER AT UGT RENEWABLES
52
2
Mr. José Antonio Rivero Larrea
CHAIRMAN OF THE BOARD OF COMPAÑIA MINERA AUTLÁN S.A.B. DE C.V.
72
7
Mr. José De Jesús Valdez Simancas
ADVISOR
72
2
Dr. Alejandro Mariano Werner Wainfeld
FOUNDING DIRECTOR AT GEORGETOWN AMERICAS INSTITUTE
58
2
Dr. Jaime Enrique Zabludovsky Kuper
VP OF IQOM INTELIGENCIA COMERCIAL
69
6
Mr. Enrique Zambrano Benítez
CHAIRMAN OF GROUP PROEZA, S.A. DE C.V.
69
13
GENERAL
BOARD MEMBER TYPE
EXPERTISE
INDUSTRY
23
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Board of
Directors
Álvaro
Fernández Garza
CHAIRMAN OF THE BOARD
Position: CEO & President
of ALFA, S.A.B. de C.V.
Age: 57
Tenure: 14 years (Since 2011)
Public boards (7):
ALFA (President)
Axtel (Co-Chairman)
Nemak (Co-Chairman)
CTAxtel (Co-president)
Cydsa (Member)
Vitro (Member)
Consejo Mexicano de
Negocios (Member)
Education:
BA from Notre Dame University
MBA from ITESM
MBA from Georgetown University
Armando
Garza Sada
Position: Member of the Board
Age: 67
Tenure: 14 years (Since 2011)
Public boards (9):
ALFA (Member)
Nemak (Member)
CTAxtel (Member)
Axtel (Member)
Lamosa (Member)
Liverpool (Member)
CEMEX (Member)
BBVA México (Member)
Banco de México (Regional Member)
Education:
BA from MIT
MBA from Stanford
Francisco José
Calderón Rojas
INDEPENDENT Audit and
Corporate Practices Committee
Position: President of Franca
Industrias, S.A. de C.V. and
Franca Servicios S.A. de C.V.
Age: 58
Tenure: 13 years (Since 2012)
Public boards (1):
FEMSA (Member)
Education:
BA from ITESM
MBA from UCLA
Rodrigo
Fernández Martínez
Position: President of Sigma
Alimentos, S.A. de C.V.
Age: 49
Tenure: 13 years (Since 2012)
Public boards (0):
Education:
BA from UVA
MBA from Wharton
Andrés E.
Garza Herrera
INDEPENDENT Audit and
Corporate Practices Committee
Position: Vicepresident of
the Board of Qualtia
Age: 57
Tenure: 13 years (Since 2012)
Public boards (0):
Education:
BA from ITESM
MBA from San Diego University
Global Leadership Program
MD Switzerland
24
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Board of
Directors
Merici
Garza Sada
Position: Investor
Age: 66
Tenure: 13 years (Since 2012)
Public boards (0):
Education:
BA from ITESM
MA from Stanford
Pierre Francis
Haas García
INDEPENDENT
Position: Independent Advisor
Age: 73
Tenure: 13 years (Since 2012)
Public boards (0):
Education:
BA from Vanderbilt University
Masters in Economics from
Cambridge University
Ana Laura
Magaloni Kerpel
INDEPENDENT
Position: Partner at Magaloni Abogados
Editorialist for Grupo Reforma
Age: 61
Tenure: 3 years (Since 2022)
Public boards (1):
BBVA México (Member)
Education:
BA from ITAM
PhD from Universidad
Autónoma de Madrid
Studies from the Judicial Specialization
Center of the Mexican Supreme Court
Montserrat
Ramiro Ximénez
INDEPENDENT
Position: Country Manager
at UGT Renewables
Age: 52
Tenure: 2 years (Since 2023)
Public boards (2):
BlackRock Mexico (Member)
Fibra MX (Member)
Education:
BA in Economics from ITAM
MS in Economics from UCL
GradDip in Finance from Harvard
Extension School – Cambridge
GradDip in Corporate Social
Responsibility from Harvard
Business School
José Antonio
Rivero Larrea
INDEPENDENT
Position: Chairman of the Board of
Compañía Minera Autlán CEO of Serfimex
Age: 72
Tenure: 7 years (Since 2018)
Public boards (1):
Compañía Minera Autlán (Chairman)
Education:
BA from ITESM
MBA from ITESM
Sloan School MIT Program
Owner/President
Management at Harvard
25
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Board of
Directors
José de Jesús
Valdez Simancas
Position: Advisor
Age: 72
Tenure: 2 years (Since 2023)
Public boards (1):
Betterware de México (Member)
Education:
BS and MBA from ITESM
Master’s Degree in Industrial
Engineering from Stanford University
Alejandro Mariano
Werner Wainfeld
INDEPENDENT
Position: Founding Director at
Georgetown Americas Institute
Age: 58
Tenure: 2 years (Since 2023)
Public boards (1):
Acciona Energia (Member)
Education:
BA in Economics from ITAM
PhD in Economics from MIT
Jaime
Zabludovsky Kuper
INDEPENDENT
Position: VP of IQOM
Inteligencia Comercial
Age: 69
Tenure: 6 years (Since 2019)
Public boards (1):
Fibrahotel (Member)
Education:
BA from ITAM
PhD from Yale
Enrique De Jesús
Zambrano Benítez
INDEPENDENT Audit and
Corporate Practices Committee
Position: Chairman of Grupo
Proeza, S.A. de C.V.
Age: 69
Tenure: 13 years (Since 2012)
Public boards (1):
BBVA México (Member)
Education:
BS from ITESM & MIT
MBA from Stanford
26
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Management Team
Chief Executive
Officer
JORGE P.
YOUNG
CERECEDO
Senior Vice President
Human Capital
TERESA
QUINTERO
MÁRMOL
Chief Financial
Officer
JOSÉ CARLOS
PONS DE LA
GARZA
President of
Polyester Business
ALEJANDRO
LLOVERA
ZAMBRANO
President of
Polypropylene Business
ALEJANDRO
ALANÍS
FERNÁNDEZ
President of Expandable
Styrenics Business
ANDREAS
PLETTNER
RUTISHAUSER
President of Specialty
Chemicals Business
DAVID
COINDREAU
GARZA
President of Natural
Gas Business
ROBERTO
BLANCO
SÁNCHEZ
27
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Risk Management
Strategy & Execution
Alpek has established and continuously updates various processes to identi-
fy, monitor, and develop action plans for potential short- and long-term risks.
Findings and corresponding actions are reviewed upon in the Audit Committee
and escalated to the Board Meetings when necessary.
The Company’s risk management framework addresses ESG-related risks such as
shortages in raw material and utilities, legal and regulatory challenges concern-
ing plastics, cybersecurity attacks, among others. Alpek has also been actively
working to incorporate threats derived from the effects of climate change into
its risk management protocols, adhering to recommendations from Task Force
on Climate-Related Financial Disclosures (TCFD) and SASB, aiming to quantify
potential environmental and social impacts for effective mitigation.
Alpek’s risk management structure is segmented by business unit to identify and
address current and potential risks across operations. ESG risk management is
regularly reviewed at Board meetings, strengthened in 2022 by adding a board
member with expertise in auditing and risk management.
While risk management is primarily the responsibility of business unit directors
and operators, an Audit Committee meets every six months to assess emerging
risks, monitor existing ones, and ensure mitigation actions are effective. Findings
from this meeting are reported directly to the CEO.
Additionally, the Corporate Audit Director oversees monitoring and auditing
practices to validate risk management effectiveness. ESG material issues are
reviewed quarterly by ESG committees in meetings held throughout the year.
This process is illustrated in the diagram on the right.
Progress 2024
During 2024, Alpek continued analyzing its site-specific
physical climate risks using the ThinkHazard platform, which
asseses potential threats from climate such as cyclones,
landslides, floods, and droughts at each site. The Company
is updating and repeating this analysis to quantify the eco-
nomic impact of these risks under various climate change
scenarios, enabling more effective priotization and enhance-
ment of existing mitigation measures.
Additionally, Alpek prioritized water risk management after
a site experienced operational disruptions due to water
shortages, leading to the establishment of a water target,
furthered detailed in the Water section.
GRI: 201-2
CSA S&P: 1.4.1, 1.4.2
1
2
3
6
5
4
RISK
MANAGEMENT
PROCESS
RISK IDENTIFICATION
BY BUSINESS UNIT
RISK
EVALUATION
(By impact and probability)
RISK AND ACTION
PLAN MONITORING
RISK PRIORITIZATION
AT GLOBAL LEVEL
MITIGATION
PLAN EXECUTION
MITIGATION PLAN
DEVELOPMENT
Board Meeting
Audit Committee
· Relevant risks are escalated
MAIN PHYSICAL RISKS
NUMBER OF SITES LOCATED IN HIGH-RISK AREAS
21 Wildfire
14 River flood
11 Cyclone
Risk Management Process
Alpek classifies risks into three categories:
1 Strategic risks: Internal or external events affecting
business goals and strategy.
2 Emerging risks: Unprecedented external events with
potential for long-term impacts.
3 Climate-related risks: Climate change effects on op-
erations, value chain and financial inputs.
9 Coastal flood
7 Extreme heat
5 Water Scarcity
28
Additional and detailed information for
2024 can be found in the Annex section.
Alpek’s
Governance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Strategic Risks
Alpek utilizes Alfa’s Risk Portal as a third-party platform, facilitating the consolidation of strategic risks identified across its busi-
ness units. This integration enables the Company to effectively manage and monitor all risks and their corresponding mitigation
actions. The data collected includes the likelihood, impact, mitigation strategies, and the staff or role responsible for addressing
each identified risk. The most significant risks within Alpek’s business units are ranked by their likelihood and impact as determined.
Alpek consistently evaluates and updates its comprehensive strategic risk profile, which typically encompasses 30 to 35 ongoing
operational risks.
Alpek’s Top 10 Strategic Risks Identified for 2024
The risk heat map is structured in accordance with the COSO Framework and illustrates Alpek’s prioritization of the risks
reported by its Business Units.
Risk Heat Map
RISK ID
AREA
RISK
RISK DESCRIPTION
R1
IT
Cyberattack
Business disruption due to cybercrimes such as
loss of privacy, data theft, and fraud
R2
Procurement
Dependence on Mexico’s
raw material supply
Mexico’s production decrease impacts the availability of raw
materials in some of Alpek’s production processes
R3
Operations
Delays in permits for
raw material imports
Delayed permits process with customs authorities
for raw material importing
R4
Commercial
New competition, less margin
More competition for specific business units
R5
Commercial
Plastic pollution regulation
and social pressure
Plastic Treaty resolution and new policies to minimize specific plastic usage
R6
Procurement
Raw material supply chain issues
Lack of availability of raw materials, utilities, and other supplies
R7
Safety
Access to potable water
Lack of water supply and droughts where some sites and offices are located
R8
Commercial
Business competitiveness
vs. Asian market prices
Asian petrochemical products and raw materials with lower pricing
R9
Assets
Imported Fixed Assets
Verification
Failure to provide the legal documentation required
to verify imported fixed assets in the country
R10
Procurement
Specific supplier dependence
Lack of availability of healthy competition from suppliers
GRI: 2-22, 201-2
CSA S&P: 1.4.4
VERY LOW
LOW
MODERATE
HIGH
VERY HIGH
IMPROBABLE
OCCASIONALLY
RARELY
POSSIBLE
EXPECTED
R9
R1
R2
R7
R5
R3
R6
R4
R8
R10
IMPACT
PROBABILITY
29
Mitigation Actions to Strategic Risks can be found in the Annex Section.
Alpek’s
Governance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Climate-Related Risks
GRI: 201-2
CSA S&P: 1.4.2, 2.5.5, 2.5.8
Climate-Related Risks
Identification
Alpek continues to strengthen its climate-related risk identi-
fication process by integrating insights from the TCFD, which
provides a robust methodology for disclosing financial risks
stemming from climate change. Additionally, the Company
has integrated the SASB Climate Risk Framework, which
offers industry-specific insights into relevant climate risks.
As a responsible company, Alpek recognizes the need to
assess the specific impact of each identified risk and esti-
mate when these risks might influence its value chain. These
consider three time horizons: Short-term (0 to 3 years),
medium-term (5 years) and long-term (7 years).
The potential financial impacts align with recommendations
from the SASB and TCFD frameworks. Additionally, business
impacts are evaluated based on the CDP framework and
Alpek’s internal analysis.
Climate-Related Risks Analysis
Alpek continues to rely on its quantitative assessment of
climate-related risks conducted through the platform, Cli-
manomics by S&P Group, estimating the financial impact
of climate events resulting from climate change across its
different scenarios. The risk modeling methodology is based
on a Hazard-Vulnerability-Risk framework:
1 Identify Hazard – Changes in environmental or economic
conditions associated with climate change.
2 Evaluate Vulnerability – Responses of an asset to changes
in climate-related hazards.
3 Valuate Risk – Financial measures of impacts induced
by the hazards via the vulnerabilities.
Climanomics quantifies the direct financial impacts caused
by climate change through the Modeled Average Loss (MAAL)
metric considering climate-related expenses, decreased rev-
enue, and/or business interruption due to the climate risks.
Further climate risks for 2024 will be published at a later date.
TRANSITIONAL
RISKS
PHYSICAL
RISKS
A
C
U
T
E
RI
S
K
S
C
H
R
O
N
IC
R
IS
K
S
P
O
LI
TI
C
A
L
RI
S
K
S
T
E
C
H
N
O
L
O
G
IC
A
L
R
IS
K
S
M
A
R
K
E
T
RI
S
K
S
R
E
P
U
T
A
TI
O
N
A
L
RI
S
K
S
1
2
6
11
9
7
10
8
4
3
5
12
13
14
15
16
17
18
19
20
21
1. Severity of weather events
2. Changing weather and precipitation patterns
3. Rising mean temperatures
4. Rising sea levels
5. Water stress
6. Greenhouse Gas Emissions above limiting regulations
7. Unsuccessful Greenhouse Gas Emissions
Management: Long term and short-term
8. Increased pricing of GHG emissions
9. Enhanced emissions-reporting obligations
10. Mandates on and regulation of
existing products and services
11. Exposure to litigation
12. Unsuccessful investments in new technologies
13. Transition to lower emissions technology costs
14. Substitution of existing products and
services with lower emissions options
15. Energy Management on operations
16. Product Design for Use-phase Efficiency
17. Changing customer behavior
18. Increased cost of raw materials
19. Shifts in consumer preferences
20. Stigmatization of sector
21. Increased stakeholder concern or
negative stakeholder feedback
30
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Analysis Description
The analysis evaluated 28 production sites segmented into short, medium,
and long-term horizons. To measure the magnitude of the financial impact
risk, Alpek has outlined the following levels:
Low risk
Below 0.5% of
Alpek’s EBITDA
Medium risk
Between 0.5% and 1%
of Alpek’s EBITDA
High risk
Above 1% of Alpek’s EBITDA
Additionally, Alpek analyzed climate risks based on Social-Economic Path-
ways (SSPs), ranging from SSPI - 2.6 and SSPS - 8.5. These scenarios provide
comprehensive projections that consider different socio-economic devel-
opments and their potential impacts on climate change considering land
use, energy use, population, emissions, and other factors.
Transition Climate Risks
Transition risks refer to businesses' financial and operational challenges as
they move towards a lower-carbon future. These risks arise from changes
in policies, regulations, market dynamics, technology, and societal expec-
tations to address climate change. The assessment evaluated the following
transitional climate risks under the two scenarios described previously:
Carbon Pricing
Implement emerging
policies and regulations
that impose a carbon
pricing mechanisms.
Litigation
Face increasing costs to
defend against climate-
related legal proceedings.
Market
Adapt to the impacts of the
transition to a lower-carbon
economy, affecting supply
and demand for products.
Reputation
Manage the perception of an
organization’s environmental impact.
Technology
Address the financial implications of
transitioning to a lower-carbon economy
through technological advancements.
In both climate scenarios (SSP1 – 2.6 and SSP5 – 8.5), all production sites
remain at low risk throughout the 2020s. By 2030, most sites continue in
the low-risk category. However, by the 2040s, the analysis indicates an in-
creased financial risk, with five sites categorized as medium risk and eight
sites as high risk. This trend is primarily driven by carbon pricing, which
stands out as the most significant financial challenge across both scenarios.
Emerging Carbon Pricing Risks
Alpek has recognized the financial risk of emerging climate change regula-
tions and their impacts. Examples include the UK Carbon Pricing Support,
the Québec Cap and Trade, as well as the introduction of state-level envi-
ronmental taxes in Mexico, such as the Mexico State Carbon Tax. Although
the government has offered incentives and exemptions to help companies
adapt to these new carbon pricing systems, the financial and operational
impact remains significant.
Currently, four of Alpek’s sites in Mexico are subject to these emission taxes,
with the carbon tax expected to increase considerably each year. To mitigate
these risks, Alpek has developed a carbon reduction target in line with the
SBTi initiative and is working to reduce its CO2e emissions. Additionally, Alpek
has created a Net Zero Roadmap to identify potential decarbonization tech-
nologies and is currently evaluating the potential costs of these adaptations.
REPRESENTATIVE CONCENTRATION PATHWAY (RCP)
Scientist use the RCPs to model climate change
and build scenarios about the impacts
Radiative forcing
W/m2
Years
If we follow
the RCP8.5
pathway
more
wildfires
will occur.
If we follow
the RCP2.6
pathway
fewer
wildfires
will occur.
Temperature
2081-2100
Average
increase
relative to
1986-2005
Extreme
weather
2081-2100
Moderate
Weather
Increase
0
2000
2025
2050
2075
2100
1
2
3
4
5
6
7
8
RCP8.5
RCP2.6
3.7 °C
1.0 °C
SSP1 – 2.6
Aggressive
mitigation scenario
Net Zero Emissions
by 2050
Global average temperature rising by 1.3 – 2.4°C by 2100
Aligned with Paris Agreement
SSP5 – 8.5
Low mitigation scenario
Emissions tripled by 2075
Global average temperature rising by 3.3 – 5.7°C by 2100
Aligned with business-as-usual projections
31
Emerging Risks can be found in the Annex section.
Alpek’s
Governance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Operative Framework
GRI: 2-23, 2-24
TCFD: Governance, Strategy
& Risk Management
ESG Strategy
As part of Alpek’s ESG Risk Management, the Company has
adopted a dynamic materiality approach through which it
conducts a comprehensive analysis of ESG and industry
trends, and how it is perceived by its stakeholders.
This process includes ongoing dialogue with stakehold-
ers, which allows an adequate response to be given to
their demands and expectations, while also managing
the impact to their organization.
ESG RISK
IDENTIFICATION
& ANALYSIS
COMMITMENT
& OVERSIGHT
STRATEGY &
EXECUTION
TARGETS &
METRICS
Identify ESG Risks and Opportunities (R&O)
Implement a dynamic materiality analysis
Embed ESG R&O into its business risk management strategy
Define key performance indicators (KPIs) and set
targets to measure success for each initiative
Measure result impact
Establish proper initiatives for targets to be achieved
Identify the level of change needed to
establish best-in class standards
Build and improve internal capabilities to react quickly
Implement the right initiatives to address R&O
Identify partnerships that support improvement
Assign the appropriate people for decision-making
Set mechanisms to ensure the achievement of targets
Communicate and report progress
at organizational level
Review and improve
32
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
GRI: 2-29, 3-1
TCFD: Governance, Strategy, Risk Management
CSA S&P: 1.3, 1.3.1
Materiality
Establish criteria evaluating
external impacts of Alpek's
operations and potential financial
consequences for the Company.
Prioritization of material issues
within a matrix based on the
Company’s maturity level
and overall risk exposure.
Alpek’s business model,
initiatives and commercial
relationships were evaluated and
compared with industry peers’
performance. Market conditions,
financial results and ESG-linked
incentives were considered.
Key ESG indicators aligned with
leading frameworks: GRI, IFRS,
SDGS, etc. were categorized
into economic, governance,
environmental, and social
dimensions using Global Industry
Classification Standard (GICS).
Analysis of material issues’
relevance for external stakeholders
and alignment with internal
strategy, ensuring a comprehensive
understanding of their impact.
EVALUATION
CRITERIA
MATURITY
ASSESSMENT
RESULTS
DEFINITION OF
INDICATORS
EXPOSURE TO ESG AND
FINANCIAL RISKS
1
3
5
2
4
In 2023, Alpek's dual materiality assessment evaluated risk exposure through
comprehensive industry benchmarking and an analysis of ESG stewardship
maturity. In 2024, the Company further strengthened this assessment by
fully integrating the dual materiality approach across all the countries
where it operates. Ongoing engagement with key stakeholders provided
deeper insights into the positive and negative impacts of these material
topics on both business operations and society.
This process enhanced risk awareness, enabling a more proactive approach
to managing both financial and non-financial risks. To remain at the fore-
front of evolving global standards and stakeholder expectations, Alpek
plans to update its dual materiality assessment in 2025.
Double Materiality
Assessment Process
Alpek conducted its 2023 dual materiality assessment in collaboration with
a third-party sustainability consulting firm, incorporating insights from
clients, suppliers, and key industry players through public sustainability
and financial data analysis. Internal stakeholders contributed through
interviews and surveys, integrating financial risks with stakeholder in-
sights to identify 14 material issues, which were approved by the ESG
Executive Committee.
33
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Materiality Matrix
8
7
6
5
11
10
9
14
12
13
3
4
2
1
14 Material Issues
GROW RESPONSIBLY
1. Climate Change Strategy
2. Circularity and Product
Responsability
3. Environmental Management
4. Water Management
LEAD WITH EMPATHY
5. Occupational Safety
6. Human Rights
7.
Diversity, Equity and Inclusion (DEI)
8. Social Impact
UPHOLD HIGHEST STANDARDS
9. Sustainable Corporate Governance
10. Cybersecurity
11. Compliance and Transparency
EMBRACE CHANGE
12. ESG Risk and Impact
Management
13. Innovation and Sustainable
Development
14. Value Chain Management
DEVELOPMENT VS. INDUSTRY
RISK (RELEVANCE AND EXTERNAL IMPACT)
GRI: 3-2
TCFD: Governance, Strategy, Risk Management
CSA S&P: 1.3
34
Main material issues can be found in the Annex Section.
Alpek’s
Governance
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
GRI: 2-23, 2-24
TCFD: Governance, Strategy
GROW RESPONSIBLY
Alpek strives to continue growing
sustainably, making sure to minimize
any adverse effects from its products
and processes.
Climate Change Strategy
Circularity and Product
Responsibility
Water Management
Environmental
Management
LEAD WITH EMPATHY
Alpek empowers its people
to create value for the Company
and communities.
Occupational Safety
Diversity, Equity
and Inclusion (DEI)
Social Impact
Human Rights
UPHOLD
HIGHEST
STANDARDS
Alpek is committed to
meeting and exceeding
the highest ESG standards.
Its ongoing focus is on enhancing
transparency and accountability
of its performance.
EMBRACE
CHANGE
Alpek actively monitors its
changing environment and develops
new ways to tackle emerging challenges
through its enablers.
ESG Risk and
Impact Management
Innovation and Sustainable
Development
Value
Chain Managemen
ESG Model
Alpek’s ESG Model is an internal platform to launch programs and initia-
tives that allows the tracking and development of its environmental, social,
and governance objectives. Involving different functions at all levels of the
organization, Alpek embraces a shared focus on its economic growth, de-
velopment of stakeholders, promotion of social equity and the protection
of the environment.
Sustainable Corporate Governance
Compliance and Transparency
Cybersecurity
35
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Corporate Policies
As part of Alpek’s Risk Management processes, the Company developed and published
policies and initiatives that support compliance of its ESG Strategy across all operations.
Click on each circle to visit the policy.
HUMAN
RIGHTS
INFORMATION
SECURITY
SAFETY, HEALTH
AND WELL-BEING
ENVIRONMENTAL
SUPPLIER CODE
OF CONDUCT
ESG
BOARD CODE
OF ETHICS
WATER
MANAGEMENT
RESPONSIBLE
INVESTMENT
DIVERSITY
EQUITY AND
INCLUSION (DEI)
CODE
OF ETHICS
CODE OF
CONDUCT
WHISTLEBLOWER
CONFLICT OF
INTEREST
ANTICORRUPTION
TAX
GRI: 2-23
CSA S&P: 1.4.2, 1.7.1, 1.8.1, 2.2,2. 3.4
36
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Code of
Conduct
Alpek has a code of conduct for all employees, suppliers
and any third party involved in its business. This document
establishes the core values, standards and culture that reg-
ulates its daily behaviors. The most relevant topics the Code
addresses are anticorruption practices (including bribes and
gift policies), conflict of interests, proprietary information, in-
tellectual property, Human Rights, environmental protection,
community relations, and occupational health and safety.
All of Alpek’s operations
are carried out under
a framework of legality,
respect for human rights
and ethical conducts.
For more information on the Code of Conduct, please visit the website.
GRI: 2-23
CSA S&P: 1.5.2
37
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Cybersecurity
Strategy & Execution
As cybersecurity challenges continue to evolve, Alpek acknowledges the importance and strategic priority
of this material topic. In response, the Company’s cybersecurity strategy relies on its Chief Information
Security Officer, who ensures the effective development of diverse initiatives to enhance the safety of all
information systems.
The cybersecurity strategy model has three focus areas:
1 Cybersecurity Framework NIST (National Institute of Standards and Technology)
2 Information Security Management
3 Defense Systems Assessment
ENTÉRATE
HOY
ENTÉRATE
HOY
Y CUÍDATE DEL ENGAÑO
Ingeniería Social
La ingeniería social es una técnica de manipulación
psicológica utilizada por ciberdelincuentes para engañar
a las personas y que revelen información confidencial.
Los medios más comunes de engaño son:
Llamadas telefónicas
Realizadas para obtener
información sensible
haciéndose pasar por
entidades confiables.
Correos electrónicos
Enviados aparentemente
de fuentes legítimas para
engañar a las personas y
obtener su información.
Mensajes de texto
Utilizados como medio
para engañar con
promociones falsas a
través de enlaces.
Recomendaciones
01.
02.
03.
Verifica la identidad de las personas que te solicitan
información confidencial.
Evita acceder a enlaces y no descargues archivos
adjuntos de correos electrónicos o mensajes no
solicitados.
Mantén tu software, sistemas y dispositivos
actualizados y monitorea tus cuentas
regularmente.
Progress 2024
Throughout 2024, Alpek dedicated substantial time and resources to
enhancing its cybersecurity framework. This critical initiative ensures
the safety and continuity of its operations by implementing best prac-
tices across all business units. Collaboration and a deep understanding
of potential risks are vital for Alpek’s employees to act effectively.
Here are four key cybersecurity milestones achieved in 2024:
1 Initial Cybersecurity Behavior Survey: Alpek conducted a survey
to assess the cybersecurity maturity level of its users, achieving an
overall score of 4.0 out of 5. This indicates a high level of prepared-
ness among employees.
2 Cybersecurity Campaigns: As part of the awareness program,
Alpek distributed several specific case videos and newsletters to
the general audience, key personnel, and their families.
3 Awareness Program Compliance: Alpek promoted educational
materials and conducted phishing simulations across all business
units to ensure compliance and enhance cybersecurity awareness.
4 Specialized Training: Alpek offered specialized training for tech-
nical audiences on topics such as “Defending Against AI-Enhanced
Cyber Threats” and “Cybersecurity Leadership: Protecting High-Value
Targets in the Digital Age.” Additionally, Alpek provided general cy-
bersecurity training for all employees using the KnowBe4 platform.
TCFD: Risk Management
CSA S&P: 1.9 Cybersecurity
ALPEK’S
CYBERSECURITY
FRAMEWORK
IDENTIFY
PROTECT
RECOVER
RESPOND
DETECT
38
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
People
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
PEOPLE
39
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
People
Alpek’s Team
GRI: 401-2, 404-2
CSA S&P: 3.3.2, 3.3.5
MANAGEMENT
BY OBJECTIVES
360°
FEEDBACK
Each year, executive
management and employees
establish objectives
aligned with departmental
and organizational
visions and targets.
Alpek’s 360° feedback process
collects anonymous input from
supervisors, peers, and subordinates,
providing a comprehensive view of
performance, identifying strengths
and areas for improvement.
Employee Development Programs
At Alpek, development is a cornerstone of its corporate culture. The Company is dedicated
to implementing and offering robust programs and initiatives that continuously enhance
the skills of its workforce, fostering a dynamic environment of growth and innovation.
LEADERSHIP AND PROJECT MANAGEMENT CAPACITY BUILDING
The Company organized multiple training programs across its business units to develop
or enhance soft skills related to team communication and leadership. These initiatives
directly benefited almost 800 employees, fostering their professional development and
enhancing organizational effectiveness.
ONGOING PROFESSIONAL EDUCATION
In 2024, Alpek provided employees with academic advancement opportunities through
scholarships for various educational programs. These included professional certifications,
diplomas, and master’s degrees, enabling employees to enhance their skills, advance
their careers, and contribute more effectively to the organization. Throughout the year,
these initiatives benefited more than 40 employees.
Performance Appraisal
At Alpek, performance appraisals are crucial for evaluating workforce effectiveness and ensuring
proper employee development. The Company employs various performance appraisal methods
across its business units and employee levels, delivering accurate assessments that foster pro-
fessional growth and align individual achievements with Alpek’s strategic objectives. These eval-
uations take place at least annually at both the executive management and management levels.
HOW DOES IT WORK AT ALPEK?
40
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
People
Strategy & Execution
Alpek is committed to fostering a supportive and inclusive
work environment that prioritizes employee well-being and
professional growth. To achieve this, the Company imple-
ments various programs and policies designed to enhance
work-life balance and career development.
Key Initiatives Include:
1 Flexible work arrangements, including remote work,
part-time options, and adaptable schedules.
2 Comprehensive parental leave, granting paid leave to
all employees, even in countries where it is not legally
required. Female employees receive between 4 and 24
weeks of leave, while male employees are entitled to 5
days to 5 weeks, depending on local regulations.
3 Dedicated lactation facilities and support, ensuring a
family-friendly workplace.
4 OrientaMe, offering access to professional therapy, per-
sonalized nutrition guidance, and expert financial and
fiscal consultancy for all employees.
Through these initiatives and additional benefits, Alpek con-
tinues to promote a workplace culture that values employee
well-being, engagement, and long-term success.
Quality of Life
Progress 2024
In 2024, Alpek developed and implemented a customized
engagement survey tool to enhance the depth and relevance
of employee insights. The Company conducted a compre-
hensive survey to assess the perceptions and experiences of
over 5,000 employees across its operations in nine countries.
Despite being the first year of implementation, the survey
achieved an impressive 86% response rate, reflecting strong
employee participation and commitment.
86%
r e s p o n s e
r a t e
HIGH PERFORMANCE MODEL
HIGH PERFORMANCE
COMPONENTS
ENGAGEMENT
Commited and loyal employees,
illing to go extra mile
ENABLEMENT
The right people in the righ roles, in
a productive work envorinment.
Detached
Least
Effective
Most
Effective
Frustrated
Enablement
Engagement
-
+
-
+
GRI: 401-2
CSA S&P: 3.3.7
41
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
People
Strategy & Execution
Alpek believes that a diverse representation of gender, cul-
tures and perspectives across all organizational levels and
an inclusive workplace promotes innovation, creativity, and
enhanced decision-making.
Implementing inclusive recruitment processes, minority-fo-
cused development programs and DEI training are key ini-
tiatives to achieve a diversified workforce.
Progress 2024
In 2024, Alpek reinforced its commitment to foster a more
inclusive workforce by by endorsing two important causes:
Women Empowerment Principles by the United Nations
Global Compact and UN Women, dedicated to gender equal-
ity, as well as Movimiento Congruencia, focused on occu-
pational inclusion of people with disabilities.
Throughtout the year, Alpek has implemented several ini-
tiatives aligned to its strategy:
Sustained the implementation of women’s network
and mentoring programs.
Continued hosting sessions on unconscious bias and
gender gap to raise awareness among employees.
Conducted training sessions that included
unconscious bias and a focus on a management
framework to spur acceleration.
Alpek’s leadership team leads by example, striving to create
an inclusive and collaborative environment where everyone
can thrive, while also fostering a culture of continuous im-
provement, innovation, and growth.
This is only the beginning as Alpek embarks on a journey of
cultural transformation and leadership development.
“We embrace women’s
contributions to
our organization
and society,
acknowledging that
equality is everyone’s
responsability.
Alpek will further
diversify its workforce
through strategic
hiring, retention,
and organizational
development. Our
success relies on
innovation that comes
from having different
strengths perspectives,
and experiences.”
JORGE YOUNG
ALPEK CEO
Diversity, Equity and Inclusion (DEI)
19%
1,032
RACE
DIVERSITY
(% of Alpek’s
workforce)
81%
4,482
GENDER DIVERSITY
19% of
Management
positions are
occupied by
women.
Note: Management positions consider top, middle and junior
management positions (from Jr. Management to Executives)
Note: Races classified according to S&P CSA report.
Hispanic or Latino
African American
Indigenous or Native American
White
Asian
Other races
49%
30%
15%
1%
1%
GRI: 405-1 to 2
CSA S&P: 3.1.3
4%
42
Additional and detailed information for
2024 can be found in the Annex section.
Alpek’s
People
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek is committed to achieving true gender parity in terms of salary and opportunities,
continuously enhancing inclusivity across all business levels. For the first time, in 2023, the
Company publicly disclosed its gender pay data. In 2024, Alpek further improved its analysis
by segmenting the data by levels and regions, as well as creating an internal platform for
the human resources team to continuously monitor variances.
As of December 31, 2024, across Alpek’s global organization men earn 1% more than women
at a median level and women earn 16% more than men on average, according to the United
Kingdom government’s methodology.
Alpek employs various layers of data analysis to understand structural salary differences
and address root-level and individual impact issues. These layers include differences in
salaries by Mercer level roles, bonuses, and other compensation differences, representa-
tion in top, middle, and lower management, gender segmentation by country, and salary
percentage groups, among others.
While the Company is committed to transparency on this material issue, Alpek understands
that true gender parity extends beyond high-level numbers. The Company is actively de-
veloping new strategies to ensure that all women and men within the organization feel
represented, understood, and treated equitably.
Gender Pay GAP
1%
D i f f e r e n c e a t
a m e d i a n l e v e l
- 1 6 %
D i f f e r e n c e a t a n
a v e r a g e l e v e l
GRI: 405-2
CSA S&P: 3.1.4
43
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
People
Occupational Safety
Strategy & Execution
Alpek consistently invests in maintaining a safe and healthy
work environment for all its employees and contractors.
Each of Alpek's facilities operates under a Health and Safety
Management System that adheres to international standards
or national regulations.
1,096
Initiatives and training programs were
implemented, covering areas such as a
safe workplace, facility improvements,
a n d m a c h i n e a d a p t a t i o n s .
Progress 2024
During 2024, 10 sites achieved zero recordable incidents.
By the end of the year, a total of 54 initiatives were carried
out to boost health and safety in operations. Additionally,
Alpek conducted 1,042 safety-related training programs,
totaling more than 29,000 hours of training. Among the
most relevant courses were Firefighting Training and Safe
Forklift Operation.
Even though safety is a top priority for Alpek, regretta-
bly, in 2024, the incident rates (TRIR & LTIR) increased
against last year. The Company strives to learn from all
incidents and improve the standard ways of working
across the organization.
GRI: 403-1, 403-5, 403-9
SASB: RT-CH 320A.1
CSA S&P: 3.4
2024
2024
2023
2023
2022
2022
42
0.36
0.27
0.35
30
34
0.57
0.51
0.42
Recordable Incidents
Lost time Incidents
Lost time Incidents Rate (LTIR)
Total Recordable Incidents Rate (TRIR)
RECORDABLE INCIDENTS | TRIR
(Number of cases | cases per 200,000 man-hours)
LOST TIME INCIDENTS | LTIR
(Number of cases | cases per 200,000 man-hours)
66
47
49
44
Additional and detailed information for 2024
can be found in the Annex section.
Alpek’s
People
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Human Rights
Strategy & Execution
Alpek commits to establish policies and practices dedicat-
ed to upholding fundamental human rights and principles
across its operations, value chain and communities. This
commitment is vital to the Company's success and reflects
its dedication to contributing to societal well-being. Alpek
implemented its Code of Ethics and Human Rights Policy
to strengthen its commitment to the human rights of its
employees and communities. The Company ensures that
ethics are deeply embedded in its corporate culture and
incorporates a detailed due diligence process for any per-
ceived Human Rights violations.
Each business unit conducts its own Human Rights due
diligence process, considering the following elements:
Employment is freely chosen
Safe and hygienic working conditions
Prohibition of child labor
Living wages are paid
Working hours are not excessive
No discrimination is practiced
No harsh treatment is allowed
Through Alpek’s Audit process, it proactively conducts as-
sessments to identify any potential human rights issues,
as the internal team thoroughly covers and visits all sites
every 2 to 3 years. Each visit follows an approved risk pro-
cess which follows up with a specific gap and improvement
plan for each site.
GRI: 2-23, 2-24, 2-25
CSA S&P: 1.5.4, 3.2.1, 3.2.2, 2.2.4
45
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
People
Human Rights
Since 2021, Alpek has pledged to the UN Global Compact to
advance the protection of human rights. To ensure adher-
ence, Alpek has implemented a rigorous framework with
sanctions for violations, well-defined reporting channels, and
effective remediation processes. This approach guarantees
compliance and accountability. Instances of human rights
violations can be reported through the Integrity and Trans-
parency Helpline, ensuring prompt and thorough resolution.
Alpek's comprehensive strategy underscores its unwavering
commitment to fostering a workplace and community that
respects and upholds fundamental human rights.
All Alpek’s sites are governed by this Due Diligence
Process .
The Internal Audit of Alfa does the investigation and
analysis.
Depending on the complaint, additional company
personnel may be involved to help the investigation.
Violation or non-compliance, or the making of any
act in violation of Alpek’s Code of Conduct and/or
Human Rights Policy, will result in disciplinary action,
which may include termination of employment.
1.
Please refer to the “Code of Business Conduct” for further details on the Helpline process
2.
Following the internal process, all complaints (verified or not) are analyzed in an equal manner by Alpek’s auditing and human capital functions and are fully investigated in a
step-by-step escalation procedure. Those complaints which are verified through the process, are then acted upon and escalated to action resolution are considered “verified”.
MESSAGE
CLASSIFICATION
ANALYSIS AND
ASSIGNMENT
RESOLUTION
CASE
EVALUATION
MEETING
REPORT
TO AUDIT
COMMITTEE
IDENTIFIABLE
ANONYMOUS
1. Complaint Filing
2. Complaint
Information gathering
3. Investigation
and resolution
EMAIL
Transparency@alfa.com.mx
TELEPHONES
1-800
WHATSAPP
+52 81 2353 9583
WEB FORM
www.alfa.com.mx/transparency.html
GRI: 2-23, 2-24, 2-25, 2-26
46
Alpek’s
People
Additional and detailed information for 2024
can be found in the Annex section.
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Social
Impact
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
IMPACT
47
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
Impact
Supporting Communities
GRI: 201-1, 413-1
CSA S&P: 3.6.2
Strategy & Execution
Since the update to a dual materiality assessment, supporting
local communities has become a central part of Alpek’s strategy.
While Alpek engages and supports in various forms, given the
context of most of its local communities, it prioritizes educa-
tion in all its forms. By enhancing social welfare, the Company
realizes the “Lead with Empathy” pillar of its ESG Model.
+36,000
P e
o
p
l
e
b
e
n
e
f
i
t
t
e
d +3,500
Employees and external volunteers
+$73,000
in donations (cash, in-kind, etc).
Progress 2024
Following its Lead with Empathy strategy, Alpek has
made significant contributions to its communities by:
Building Educational Platforms for Youth: Alpek
actively promotes environmental education through
school talks and reinforces its commitment to social
development by supporting ALFA Fundación’s Ex-
tra Academic Talent Centers. These centers provide
high-quality education to young individuals from
vulnerable communities, empowering them with the
tools to achieve academic excellence. In 2024, 104
students from ALFA Fundación’s high school program
successfully graduated from college, demon- strating
the program’s lasting impact on their academic and
professional growth.
Enhancing Community Safety: All Alpek facilities
conduct various safety training sessions for surround-
ing communities to prepare for potential emergencies
related to the Company’s operations.
Promoting Environmental Awareness: Alpek
spreads awareness through talks in schools, fo-
rums, and collaborations with local authorities and
associations.
48
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
Impact
Alpek’s Value Chain
CRACKER
CRACKER
OIL
NAPHTHA
REFORMER
PARAXYLENE
STYRENE
POLYETHYLENE
ETHYLENE
OXIDE
MONOETHYLENE
GLYCOL
BENZENE
PENTANE
PTA
EPS
ARCEL
POLYPROPYLENE
NAPHTHA
PROPYLENE
ETHYLENE
ETHANE
OIL
PROPANE
REFINERY
REFINERY
PDH
CRACKER
THERMOFORM
PACKAGING
rPET
SHEET
PET
SHEET
rPET
FLAKE
rPET
PELLET
PET
Alpek’s products are
used by millions of
people daily, in a wide
variety of applications.
49
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
Impact
Value Chain
Strategy & Execution
Alpek acknowledges that achieving its sustainability vision
and strategic goals requires aligning its core values through
active collaboration across the entire value chain, especially
with suppliers and customers.
Committed to promoting a sustainable value chain, Alpek
has actively pursued ESG opportunities with its custom-
ers, including innovation projects aimed at reducing the
environmental impact of products and processes. In re-
sponse to the evolving landscape of sustainable supply
chain management best practices, Alpek is dedicated to
improving its relationships by developing a supplier pro-
gram that ensures adherence to the highest ethical, social,
and environmental standards.
Supplier Screening Results
Alpek maintains a network of over 3,500 Tier-1 suppliers,
with more than 400 classified as critical. Due to the exten-
sive supplier base, the initial screening process conduct-
ed in 2024 focused on 17 key suppliers across three SASB
industries:
Oil & Gas – Exploration & Production
Oil & Gas – Refining & Marketing
Chemicals
The screening revealed that 3 of the 17 key suppliers did not
meet industry thresholds and were classified as significant
suppliers for Alpek. This phase provided a broad under-
standing of the ESG progress among Alpek’s key suppliers.
Moving forward, Alpek aims to refine its methodology,
expand supplier coverage, and gather more detailed data
to better understand supply chain risks and align with its
sustainability goals.
Supplier Screening Process
Alpek’s supplier screening methodology is tailored to industry-specific standards, aiming to effectively identify and mitigate
supply chain risks while promoting sustainability throughout its operations. The process includes the following steps:
SUPPLIER
SCREENING
PROCESS
1. Supplier
Industry
Mapping
2. SASB
KPIs
Identification
3. Significant
Supplier
Threshold
4. Risk
Level
Assessment
Identify the
industries of Alpek’s
suppliers using
the Sustainable
Accounting
Standards Board’s
(SASB) industry
classification
standards.
Compile a
comprehensive list
of ESG indicators
recommended
by SASB for each
industry to measure
performance
and progress.
Select a subset of
industry-specific ESG
indicators to serve as
thresholds, ensuring
standardized
comparability and
risk identification.
Establish minimum
requirements for
each ESG pillar
(Environmental,
Social and
Governance).
Further assess
suppliers that do
not meet at least
one industry-
specific threshold.
This assessment,
combined with
the supplier’s
business relevance,
determines their
significance and
identifies major
ESG risk aspects.
GRI: 2-6, 308-1
CSA S&P: 1.7
50
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
Impact
Progress 2024
In 2024, Alpek conducted a comprehensive review of its Scope 3 emissions,
which revealed that around 55% of these emissions are associated with
Purchased Goods and the Processing of Sold Products. These emissions
are directly linked to the activities of Alpek’s suppliers and customers,
respectively. As a result, Alpek has focused its efforts on addressing these
key areas.
During the year, Alpek developed a decarbonization roadmap for Scope
3 emissions (Categories 1 and 10) targeting 2035. The roadmap includes
a commitment to engage both suppliers and customers in efforts toward
emissions reductions. On the supplier side, Alpek plans to take into con-
sideration an optimization of its supplier mix and use of bio-based raw
materials. On the customer side, Alpek aims to expand its customer base
while encouraging commitments to sustainability. To support these ob-
jectives, Alpek has classified its supplier and customer base into a matrix
with two key axes: volume and sustainability commitment. This classifi-
cation allows Alpek to prioritize high-engagement stakeholders, fostering
stronger sustainability relationships and identifying promising, highly
engaged sustainability partners for expanding business contracts.
Looking ahead, Alpek intends to enhance its collection of accurate, first-
hand data from its value chain through targeted surveys, leveraging spe-
cialized ESG software to strengthen its sustainability efforts.
Alpek has been improving its supply chain by making it more resource-ef-
ficient and environmentally friendly. One example of this is CaPETAll, a
development of Alpek’s polyester business that uses 100% PET Resin for
cap closures for beverage containers. The technology supports a circular
economy by making it easier to recycle post-consumer PET bottles. This
reduction in waste, along with a focus on increasing material reuse, helps
minimize environmental impact and promotes more sustainable packag-
ing solutions. It enhances the overall efficiency and sustainability of the
supply chain.
Another example is Polyfilter, where Alpek’s polypropylene business, in part-
nership with its customer, developed a special resin for the mining industry,
which sought sustainable and innovative solutions for its filtration process.
89%
w a s
t h e
a v e r a g e
satisfaction rate achieved
in customer satisfaction
assessments conducted
by Alpek’s business units.
These surveys evaluate overall satisfaction, product quality,
customer service, supply reliability, and other aspects.
Note: The customer satisfaction assessment takes into account the surveys from 2023 and 2024.
SUPPLIER CODE OF CONDUCT
Alpek is committed to conducting business with
the highest standards of integrity, ethical behav-
ior, and sustainability. The Company’s Supplier
Code of Conduct outlines clear expectations for
all suppliers to adhere to these values, ensuring
compliance with applicable laws, anti-corruption
measures, fair labor practices, and environmen-
tal stewardship. Alpek encourages its suppliers
to promote human rights, safeguard health and
safety, and uphold confidentiality standards. As
part of its dedication to social responsibility, Al-
pek invites its customers and partners to join in
fostering a culture of transparency and ethical
business practices, working together to build a
more sustainable and responsible future.
For more information, click here to access:
Alpek’s Supplier Code of Conduct Policy
Supply Chain Management
GRI: 308-1
CSA S&P: 1.7.1, 1.7.2, 1.7.3, 1.7.4, .1.7.5, 1.7.6
51
Annexes
Consolidated
Financial Statements
Financial
Review
Natural
Capital
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Social
Impact
NATURAL
CAPITAL
52
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Natural
Capital
Strategy & Execution
In pursuit of its 2030 SBTi goal, Alpek has
made significant progress, while stead-
fastly maintaining its long-term ambition
of achieving carbon neutrality by 2050.
In 2023, Alpek embarked on the devel-
opment of its Net Zero roadmap by con-
ducting a thorough analysis of decarbon-
ization strategies and solutions globally.
This analysis identified the sites contrib-
uting the most to Alpek's Scope 1 and 2
emissions, representing over 90% of the
total. Three key decarbonization pathways
emerged as having the greatest potential:
Electrification
Renewable Energy
Carbon Capture, Utilization, and
Storage (CCUS) *
Progress 2024
Building upon this foundation, 2024 witnessed a
refinement of the roadmap. Site visits were con-
ducted at the most strategic locations, culminating
in the development of detailed decarbonization
plans for each. These plans encompass proposed
strategies, estimated investment requirements,
and comprehensive implementation timelines.
Concurrently, research efforts were expanded to
provide a holistic overview of progress, and ro-
bust monitoring mechanisms are currently being
developed to track the successful implementation
of the roadmap at each site.
Climate Change &
Net Zero Strategy
SBTi Target
27.5%
S1&2
reduction
by 2030
Other disruptive
technologies
Offsetting
Carbon-free
energy
Optimization
Electrification
Remaining
emissions
CCU/CCS*
Total emissions
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2%
20%
20%
22%
2%
27%
7%
2019
2022
2030
2035
2040
2045
2050
* Optimization considers process and site portfolio optimization.
GRI: 305-5
TCFD: Targets and Metrics
SASB: RT-CH-110A.2
CSA S&P: 2.5.12
53
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Natural
Capital
Climate Change & Net Zero Strategy
Internal Carbon Pricing
Alpek is exploring the implementation of an Internal Car-
bon Pricing (ICP) system to align its operations with carbon
emissions reduction goals. In 2024, the Company paid an
average of ~$3 USD per ton of CO2 in regions with carbon
taxes or Emissions Trading Systems (ETS).
During the year, Alpek conducted an ICP analysis based
on future carbon pricing expectations, tailored to specific
regions.
In the short term, Alpek is evaluating the potential adap-
tation of its Investment Review Process to incorporate the
impact of carbon emissions.
These initiatives aim to integrate Alpek’s sustainability strat-
egy with its corporate objectives.
Potential Investment Review Process
CURRENT PROCESS
ADDITIONAL STEPS
Generate investment ideas by subsidiaries
Definition of the potential benefits
and/or additional costs
Identify if there is a decrease or
increase in energy consumption
Assess economic viability
Calculate & add carbon
emission impact
Present CAPEX to Top Management
Request formal approval
Track approved projects that
impact Alpek’s CO2 emissions
CSA S&P: 2.5.14
54
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Natural
Capital
2.0
1.2
0.8
1.9
1.1
0.8
Energy & Emissions
Execution & Strategy
Alpek’s decarbonization commitments to 2030 have been
approved by the Science Based Targets Initiative (SBTi) since
2022. To achieve this goal, Alpek has embraced a dual-front
strategy based on its analysis of global decarbonization
strategies and solutions.
Transition to Low or Zero-Emission Energy
Sources: Alpek is exploring energy alternatives with
minimal or zero-carbon emissions, including nuclear
and hydro energy.
Energy Utilization Efficiency Enhancement:
Alpek actively improves energy efficiency with
measures like adopting efficient equipment,
electrifying processes, and implementing procedures
for optimal thermal energy use.
Progress 2024
In 2024, despite achieving higher operating yields and acquiring full owner-
ship of a recycling facility in Fayetteville, N.C., Alpek achieved a 6% reduc-
tion in total CO2 emissions compared to 2023. This progress was driven by
an increased share of nuclear energy at two sites in Mexico, the continued
procurement of International Renewable Energy Certificates (IRECs) for select
facilities in Chile, Argentina, Mexico, and Brazil, as well as targeted initiatives
to optimize chemical processes and electrify key operational equipment
across multiple sites.
Additionally, Alpek provides training programs to equip employees with ex-
pertise in energy efficiency, covering boilers, engines, low-pressure vapor
recovery, optimal energy use, and renewable energy financing, amongst
others. Meanwhile, its R&D department drives continuous improvements
in energy optimization and reduction, including condensate return system
redesigns, and boiler and pump efficiency upgrades.
Alpek has already surpassed its SBTi 2030 target of a 27.5% reduction in Scope
1 and 2 emissions. The next challenge is to consider aligning its emissions
reductions with the 1.5°C climate pathway and ultimately achieve carbon
neutrality by 2050.
GRI: 302-1, 302-3, 302-4, 305-1, 305-2, 305-4, 305-5
TCFD: All elements
SASB: RT-CH-110a.1, RT-CH-110a.2
CSA S&P: 2.2, 2.2.1
2024
2023
2022
2.4
1.4
1.0
2019
SBTi Base
1.4
2.8
1.4
0.4
0.4
0.3
Scope 1
Scope 2
Natural
gas
Steam
Electricity
Other Fuels
CO2 Emissions Intensity:
(Ton CO2 /Ton Produced)
Energy Consumption Intensity
(GJ/Ton Produced)
Note:
1. The emission figures provided adhere to the SBTi criteria, wherein the emissions from all
plants acquired are taken into account, regardless of the year of acquisition.
2. The energy consumption figures accurately reflect the actual use of energy, respecting the dates of acquisitions.
3. Carbon-free electric energy is estimated considering the renewable energy mix of some country's electric grids.
4. 2023 data adjusted to reflect newly acquired sites.
0.6
28
2024
2023
29
10
10
12
11
2022
12
7
7
6
32
13
5
5
5
OVERALL CO2 EMISSIONS
(SBTi S1&2)
OVERALL ENERGY CONSUMPTION
X 106 GJ
39.6%
Carbon
free EE
(% of total
electricity)
55
Additional and detailed information for
2024 can be found in the Annex section.
Natural
Capital
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Waste Management
Strategy & Execution
Alpek’s strategic focus on continuing to push for a more
circular economy, particularly through its participation
in the PET recycling industry, will continue to impact its
post-industrial waste initiatives. However, it’s crucial to
recognize that the overall environmental impact is reduced
compared to the alternative, for the purchased PET bottle
bales to end up in a landfill. Investing in recycling opera-
tions allows the Company to provide a new lease on life to
its product and ensure proper disposal of any impurities.
As Alpek navigates these strategic priorities, it remains
committed to pursuing innovative approaches to reduce
waste landfill disposal, increase packaging material reuse,
and minimize off-spec products.
1,980
participants in waste management
a n d h a n d l i n g t r a i n i n g s
Progress 2024
In 2024, only 1.8% of Alpek’s waste was deemed hazardous and
required proper containment. Around 23.5% of the Company’s
waste is actively recycled, reused, or commercially utilized. Addi-
tionally, 41.1% of Alpek’s generated waste originates directly from
its recycling operations.
Alpek has increased its sorting capability in some of its recycling
facilities by upgrading optical sorters and other specialized equip-
ment. This allows the Company to decrease the potential impact
of discarding valuable PET bottles and enhance the quality of the
final recycled product.
To better understand Alpek’s waste output, the Company introduced
an enhanced indicator (Productive Waste over Landfill Ratio) to
help better monitor the overall impact of its operation, due to the
complexity of its recycling business.
GRI: 301-3, 306-1, 306-2, 306-3
TCFD: Governance
SASB: RT-CH-150a.1
CSA S&P: 2.3
Definitions:
Productive Waste includes the waste that is utilized or repurposed in a
way that contributes to productive activities or generates value.
Internal Productive Waste includes the waste that is reused and
recycled or otherwise, directed to produce energy.
External Productive Waste includes the volume from PET Bales entering the
Company’s recycling sites discarding the volume sent to landfill from these sites.
98
75
2024
2023
110
79
2022
Generated
Waste
Productive
Waste
32
33
31
23
106
98
74
65
Scope 1
Scope 2
CO2 Emissions Intensity:
(Ton CO2/Ton Produced)
WASTE GENERATION
(Thousand Tons)
2024 GENERATED VS. PRODUCTIVE WASTE
(Thousand Tons)
Disposed
Recycled
Controlled
+ Landfill
Internal
Productive
Waste
External
Productive
Waste
148
115
33
+129%
Productive
waste over
landfill
PRODUCTIVE WASTE OVER LANDFILL RATIO
2.3
OUR TARGET
“Alpek will generate a waste
diversion plan by 2028,
focusing on sites generating
~90% of landfill waste, using
2023 as the baseline.”
56
Additional and detailed information for
2024 can be found in the Annex section.
Natural
Capital
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Biodiversity
Strategy & Execution
Alpek recognizes the critical role of biodiversity in ensuring business continuity and
mitigating operational and reputational risks. To address this, the Company conducted
a Biodiversity Risk Assessment (BRA) using the World Wildlife Fund’s Biodiversity Risk
Framework (BRF). This framework evaluates physical and reputational risks by assign-
ing numeric scores to operational sites based on industry-specific vulnerabilities and
geographic factors.
Progress 2024
The initial BRA focused on Alpek’s operational sites and
adjacent areas, aligning with the BRF classification for the
“Chemicals and Other Materials Production” industry. The
assessment allowed to identify sites with high to very high
biodiversity risks, scoring between 3.4 and 5 on the BRF
vulnerability scale.
Elevated physical risks indicate potential
disruptions due to environmental dependencies.
Increased reputational risks highlight stakeholder
concerns regarding biodiversity impact.
Key findings:
Of Alpek’s entire global operations, only 2 sites
had a high or very high score.
Moving forward, Alpek will develop and implement site-spe-
cific biodiversity risk management strategies, ensuring long-
term resilience and responsible environmental stewardship.
BRF methodology follows the approach showed below
1
3
2
4
Risk Aggregation
Data Collection
Scoping the
Assessment
Risk Assessment
This proactive approach enables Alpek to identify high-risk sites and integrate biodi-
versity considerations into corporate risk management strategies.
Identified industry materiality
and explored biodiversity
importance and integrity.
Evaluated biodiversity-related
physical and reputational risks.
Gathered location-specific
operational data.
Consolidated site-level
risk scores to determine
company-wide exposure.
GRI: 101-2, 101-4, 101-5, 101-6, 101-7
CSA S&P: 2.6.1
57
Additional and detailed information for
2024 can be found in the Annex section.
Natural
Capital
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
OUR TARGET
“All of Alpek’s high water-stressed and water-scarce
sites will have a water stewardship and mitigation
action plan by 2028.”
Water Management
Strategy & Execution
Alpek is committed to enhancing water effi-
ciency across its operations while ensuring
compliance with all state and federal require-
ments. Understanding the vital role of water
for all living beings, the Company proactively
addresses environmental challenges linked to
this resource.
The organization routinely performs thorough
water risk assessments using Aqueduct, which
helps identify potential risks based on various
indicators such as water quality, depletion, and
stress. This strategy enables Alpek to effectively
monitor and reduce water consumption in areas
experiencing drought and freshwater shortages.
Progress 2024
After conducting a comprehensive analysis of its water-re-
lated challenges, Alpek has decided to prioritize sites locat-
ed in regions with high and extremely high-water stress,
as well as those facing water scarcity. As a result, Alpek
will implement a water stewardship and mitigation action
plan for these sites in the coming years.
Furthermore, Alpek continues to adopt practices aimed
at reducing water consumption and maximizing resource
utilization. For instance, the Company’s expandable styren-
ics business has introduced a closed-loop reactor cooling
system at its Argentina facility, resulting in an over 80%
reduction in industrial water consumption of the site. In
the United States, the Polyester business has installed a
bottle batch wash reactor at one of its recycling facilities,
with an expected reduction in domestic water intake and
wastewater generation.
Additionally, Alpek remains committed to enhancing wa-
ter quality by removing pollutants from effluents across
its facilities.
GRI: 303-1, 303-2, 303-3
CSA S&P: 2.4.1 , 2.4.6
SASB: RT-CH-140a.1, RT-CH-140a.3
WATER INTAKE
(Million m3)
140
2024
2023
2022
134
149
24.4
23.7
Water Intake Intensity
(m3/ton Produced)
23.9
Note: Water-stress in sites was assessed by Aqueduct in 2023 , only active operational sites are displayed on the map.
Fayetteville
Riyadh
Santiago
Lerma
Cedar Creek
Altamira
Extremely High (4)
High (3)
Water-scarce areas (3)
Salalah
Concón
WATER
STRESS LEVEL
(# OF SITES)
58
Additional and detailed information for
2024 can be found in the Annex section.
Natural
Capital
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Innovation & Sustainable Development
Strategy & Execution
Innovation is responsible for creating new value, resulting in top and/or bottom-line growth. Alpek's innovation
strategy integrates optiminzation with research and development efforts to enhance operational efficiency and fos-
ter forward-thinking, positioning the Company as resilient in a dynamic business landscape. This year, innovation is
driving transformation, including agile methodologies. As part of this commitment, each Business Unit contributes
to Alpek’s continuous evolution by developing and implementing various projects:
Progress 2024
In 2024, 33% of these projects were completed, gen-
erating about $1 million in revenue and cost savings.
The remaining 67% are still in the evaluation or imple-
mentation phase and are expected to bring significant
benefits once completed.
Innovation Awards
In 2024, Alpek celebrated its 2024 Innovation Awards in
which 24 teams from 6 countries presented their projects.
The results included:
Development of 10 new products which include
a resin that makes bottle caps 100% from PET
(CaPETall®), making it easier to recycle without
losing any functionality.
Cost reduction initiatives which yielded savings of
approximately 10M USD.
Alpek remains committed to driving innovation by promoting
a culture of agility and continuously adapting to change.
RESEARCH
OPERATIVE
Alpek
Polyester
32
Styropek
9
Indelpro
21
Polioles
28
Terza
11
Alpek
3
~ 1 M USD
EVALUATION: 42%
IMPLEMENTATION: 25%
FINISHED: 33%
GRI: 2-25, 306-2
TCFD: Risk Management
internal innovation projects are divided into two
categories: operational and administrative efforts,
and research and development initiatives
104
59
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Natural
Capital
Circularity & Product Responsibility
Strategy & Execution
Alpek, a leading plastics manufacturer, is committed to addressing pollution and the depletion of finite raw materials by
promoting a circular economy. Its long-term strategy focuses on developing products and adapting operations to reduce
environmental impact, emphasizing the integration of recycled and bio-based materials and optimizing recycling site ef-
ficiency to foster a circular economy.
Alongside, the Company has been committed to ensuring that its circular products comply with the highest standards of
circularity practices. Alpek’s expandable styrenics business holds three distinct certifications related to circularity:
Progress 2024
Alpek acquired a 50% stake, ultimately gaining full ownership of Clear Path Recycling LLC, a recycling facility
located in Fayetteville, NC, further reinforcing its commitment to contributing to a circular economy.
Throughout the year, Alpek focused on maximizing the efficiency of its existing recycling facilities through various
projects aimed at improving recycling yield and enhancing the quality of the final recycled product. One notable
initiative was the installation of a bottle batch wash reactor at Clear Path Recycling to improve the washing process
and remove haze from the bottles. Another initiative was the upgrade of sorting equipment at various recycling
sites. Additionally, the polyester division has been granted Third-Party Post-Consumer Recycled Content (PCR) Cer-
tification, recognized by the Association of Plastic Recyclers (APR), for products produced with recycled content at
the Clear Path Recycling and Darlington facilities. As a result, all U.S. recycling sites hold valid certification for 2024.
Over 2,000 tons of EPS with
biodegradable and recyclable
content sold in the Americas
region in 2024
r-PET CAPACITY
(Thousand Tons)
Bottle to
Flake
132
268
Flake to
Pellet
41
169
Single Pellet
Technology
30
78
r-PET
Sheet
0
33
2020
2024
OUR TARGETS
PP: “Alpek will leverage its
partnerships to develop recycling
solutions for Polypropylene and
increase its share of Copolymers,
employed in long-term usage
applications.”
EPS: “By 2030, Alpek commits to
offer up to 30% of recycled and/
or bio-based content in packing
products, and expand its portfolio of
highly energy-efficient products for
thermal insulation applications in the
construction sector up to 100%.”
GRI: 301-2
60
Annexes
Consolidated
Financial Statements
Financial
Review
Social
Impact
Alpek’s
People
Alpek’s
Governance
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Natural
Capital
Financial
Review
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Natural
Capital
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People
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Governance
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Management
2024
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About
Alpek
2024
Performance
Financial
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Management Analysis
Unless otherwise specified, figures are expressed in mil-
lions of nominal pesos, while certain figures are expressed
as millions of dollars (US$) due to the high dollarization of
Alpek’s revenues. Percentage variations are stated in nom-
inal terms. All information is presented in accordance with
International Financial Reporting Standards (IFRS) .
Volume
Alpek experienced stable demand levels throughout the year
which led to stronger volumes across its product portfolio,
specially in the Polyester business, reaching Alpek total vol-
ume of 4,745 thousands tons in 2024, 2% higher than the
4,635 thousands tons in 2023.
Volume
[Thousand of Tons]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Polyester
3,911
3,785
4,099
3
-8
Plastics & Chemicals
834
849
966
-2
-12
Total Volume
4,745
4,635
5,065
2
-8
Average Price
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Polyester
Millions of Pesos
26
27
34
-5
-21
Millions of Dollars
1
2
2
-8
-11
Plastics & Chemicals
Millions of Pesos
35
33
48
8
-33
Millions of Dollars
2
2
2
6
-24
Total
Millions of Pesos
29
30
42
-3
-29
Millions of Dollars
2
2
2
-5
-20
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Revenues
Alpek’s total revenue in 2024 was $137,409 million (US $7,530 million), 1% lower than the $138,159 million (US $7,759
million) in 2023. This decrease was primarily due to decreased average prices of 3% and 5% in pesos and dollars, re-
spectively, mainly from lower paraxylene feedstock prices partially offset by incremental volume.
Revenues
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Polyester
Millions of Pesos
99,937
102,154
140,717
-2
-27
Millions of Dollars
5,483
5,739
6,991
-4
-18
Plastics & Chemicals
Millions of Pesos
29,501
27,709
46,804
6
-41
Millions of Dollars
1,614
1,556
2,321
4
-33
Others
Millions of Pesos
7,972
8,296
24,914
-4
-67
Millions of Dollars
433
464
1,243
-7
-63
Total
Millions of Pesos
137,409
138,159
212,435
-1
-35
Millions of Dollars
7,530
7,759
10,555
-3
-26
Revenues by Business Segment
Polyester’s net revenues in 2024 were $99,937 million
(US $5,483 million), 2% less than the $102,154 million
(US $5,739 million), in 2023. This segment decreased
5% and 8% in average sale prices in pesos and dollars,
respectively. Volume increased 3% when compared to
2023 mainly due to stable demand levels.
Plastics & Chemicals posted revenues of $29,501 mil-
lion (US$1,614 million) in 2024, in comparison to the
$27,709 million (US$1,556 million) in 2023. The average
sale prices in pesos and dollars increased by 8% and
6%, respectively, partially offset by volume decreased
of 2% year-over-year, from PP overcapacity in the region
and as construction remained under pressure due to
high interest rates, resulting an overall 6% increase in
revenues.
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2024
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Operating Profit and EBITDA
In 2024, the operating income was $5,170 million (US $295 million), 180% higher than
the operating loss of $6,437 million (US $386 million) in 2023. As of December 31, 2024,
consolidated EBITDA was $11,728 million (US $646 million) an increase of 27% compared
to the $9,260 million (US $514 million) in 2023. The consolidated EBITDA includes a net
negative effect from extraordinary items of $1,128 million (US $53 million), resulting in
a Comparable EBITDA of $12,855 million (US $699 million), 2% lower than in 2023.
Operating Profit and EBITDA by Business Segment
In 2024, the EBITDA for the Polyester segment increased by 52% to $7,707 million (US
$426 million), including a net negative effect from extraordinary items of $818 million
(US $38 million). Adjusting for these items, the Comparable EBITDA for the Polyester
segment was $8,526 million (US $464 Million), a decrease of 4% year-over-year from
lower average sales prices as feedstock prices decreased which was partially offset from
stable demand levels.
The EBITDA for the Plastics & Chemicals segment decreased 8% to $3,784 million (US
$207 million), compared to $4,108 million (US $228 million) in 2023, including a net
negative effect from extraordinary items of $325 million (US $15 million). Adjusting for
these items, the Comparable EBITDA for the Plastics & Chemicals segment was $4,109
million (US $223 million), a decrease of 1% year-over-year, from greater influence from
Asian imports in the Americas, lower construction demand from high interest rates and
additional PP capacity in the region.
EBITDA
[Millions of Dollars]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Polyester
426
281
886
52
-68
Plastics & Chemicals
207
228
564
-9
-60
Others
13
5
5
135
-
Total
646
514
1,455
26
-65
EBITDA
[Millions of Pesos]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Polyester
7,707
5,062
17,923
52
-72
Plastics & Chemicals
3,784
4,108
11,391
-8
-64
Others
236
90
110
164
-19
Total
11,728
9,260
29,424
27
-69
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2024
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Net Financial Result
In 2024, the net financial cost was $5,920 million (US $321
million), 122%higher than in 2023. The net financing ex-
penses that comprise this item increase from $2,665 mil-
lion (US $149 million) in 2023, to $3,580 million (US $191
million) in 2024. In addition, variations in exchange rates
resulted in the recognition of a non-cash foreign exchange
loss of $2,340 million (US $130 million) in 2024, versus loss
of $3 million (US $1 million) in 2023.
Taxes
In 2024, an income tax was posted for $582 million
(US $27 million) as a result of a decreased pretax in-
come, while 2023 posted an income tax of -$727 million
(US -$39 million).
Financial Result, Net
[Millions of Pesos]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Financial expense
-4,449
-3,982
-3,224
-12
-23
Financial income
869
1,317
922
-34
43
Financial expenses, net
-3,580
-2,665
-2,302
-34
-16
Loss due to exchange
fluctuation, net
-2,340
-3
-695
-83,342
100
Financial result, net
-5,920
-2,668
-2,997
-122
11
Taxes
[Millions of Pesos]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Income (loss)
before taxes
-794
-9,306
21,475
91
-143
Income tax rate
30%
30%
30%
Statuory income
tax rate (expenses)
benefit
238
2,792
-6,443
-91
143
Taxes for permanent
differences between
accounting-
taxable profit
344
-3,519
934
110
-477
Total income tax
582
-727
-5,509
180
87
Effective tax rate
73%
8%
26%
Comprised as follows:
Current income tax
-1,237
-2,358
-5,345
48
56
Deferred income tax
1,819
1,631
-164
12
1,095
Total income tax
582
-727
-5,509
180
87
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Net (Loss) Income Attributable to the Controlling Interest
In 2024, consolidated net loss attributable to the controlling interest was $765 million (US $33 million),
from the consolidated net loss of $10,914 million (US $636 million) in the previous year.
Statement of Income
[Millions of Pesos]
2024
2023
2022
‘24 VS ‘23
[%]
‘23 VS ‘22
[%]
Operating income
5,170
-6,437
24,539
180
-126
Financial result, net
-5,920
-2,668
-2,997
-122
11
Equity in income
of associates and
joint ventures
-44
-201
-67
78
-200
Income tax
582
-727
-5,509
180
87
Consolidated
net income
-212
-10,033
15,966
98
-163
Income attributable to
Controlling Interest
-765
-10,914
13,744
93
-179
Financial Indicators
[Times]
2024
2023
2022
Net Debt / EBITDA
2.9
3.4
1.3
Interest Coverage
3.4
3.4
11.4
Total liabilities /
Stockholder’s equity
2.5
2.1
1.6
Net Debt1
Net debt was $38,190 million (US $1,884 million) as of December 31, 2024, 31% below the $29,205 million
(US $1,729 million) as of December 31, 2023. The cash balance and cash equivalents totaled $6,602 million
(US $326 million) Including restricted cash at year end 2024.
(1) Net Debt = Current debt plus non - current debt (excluding debt issuance costs), plus accrued interest
payable, less cash and cash equivalents, less restricted cash and cash equivalents.
Investments in Fixed and Intangible Assets
In 2024, investments in fixed and intangible assets totaled $2,223 million (US $121 million), 55% lower
than the $4,965 million (US $277 million) posted in 2023 as Alpek successfully prioritize free cash flow
generation. A significant portion of the resources were allocated to schedule maintenance.
66
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2024
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2024
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Debt Profile
Short and Long
Term Debt2
2024
2023
‘24 VS ‘23
Integrated
2024
Integrated
2023
Short term debt
81
41
98%
4%
2%
Current portion
of LT Debt
120
-
-
-
-
2 years
120
-
100%
6%
-
3 years
503
133
278%
25%
7%
4 years
200
503
-60%
10%
25%
5 years
499
200
150%
25%
10%
6 years
-
499
-100%
-
25%
7 years
597
-
100%
30%
-
8+ years
8
605
-99%
0%
31%
Total
2,007
1,981
1%
100%
100%
Avg Maturity LT
Debt (years)
4.3
5.2
Avg Maturity Total
Debt (years)
4.1
5.2
(2) Exclude leases and lease interests
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Glossary
A
Arcel®
A Polystyrene (PS) & Polyethylene (PE) copolymer used
in protective packaging for high-end products like elec-
tronics. Due to its resistance to tearing, puncturing,
cracking, and flaking, it absorbs shocks without de-
creasing its protection.
Areas of water stress and scarcity
Includes areas of med-high, high, and very high-water
stress based on World Resources Institute aqueduct
data
C
Chemical Oxygen Demand
(COD)
The capacity of water to consume oxygen during the
decomposition of organic matter and the oxidation of
inorganic chemicals such as Ammonia and nitrite. COD
measurements are commonly made on samples of waste
waters or of natural waters contaminated by domes-
tic or industrial wastes. In wastewater treatment, the
COD is used as an index to assess the effect discharged
wastewater will have on the receiving environment.
Circularity
All products that have a circularity focus are manufac-
tured in a way so they can be disassembled or come to
their end-of-life and their materials will either be broken
down by nature or returned to production. It means
that these products are designed, and developed with
their end-of-life taken into consideration.
Clean Industry Certification
Certification granted by the Mexican environmental
Protection agency (Profepa) to companies that comply
with environmental legislation.
CO2 emissions
Unit to measure the carbon dioxide produced by the
burning of solid, liquid and gaseous fuels, including
natural gas.
Comprehensive responsibility
administrative system (National
Association of the Chemical
Industry, ANIQ)
Certification given to companies that comply with the six
comprehensive responsibility requirements established
by the ANIQ, covering Process safety, Health and safety
in the workplace, Product safety, Transportation and
distribution, Prevention and control of environmental
pollution and Community protection.
E
ESG
Environmental, Social and Governance.
Ethane
Hydrocarbon part of the natural gas liquids, which at
room temperature is colorless and odorless. It is used
as a raw material to produce ethylene.
Ethylene
Compound produced from ethane. It is the raw material
used to produce vinyl acetate, ethyl chloride, styrene,
ethylene oxide and polyethylenes.
Ethylene oxide
Compound produced from ethylene and used as an inter-
mediate in the production of MEG and other chemicals.
Expandable polystyrene (EPS)
Light, rigid, cellular plastic, product of the polymerization
of styrene monomer. EPS is a versatile material because
of its properties as an impact reducer and thermal insula-
tor, with customized molding capacity. These properties,
combined withthe ease with which it can be processed,
make EPS a popular packaging for impact-sensitive items
and for protecting perishables. It is also widely used in
construction systems, to lighten floor and roof structures,
and as an insulator.
D
DPET
Advanced Technology for PET Sheet Production with a
2% Lower Carbon Footprint Compared to Industry Stan-
dards .
F
Fatality
A fatality is any death of an employee or contractor as a
result of a work-related incident.
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G
Greenhouse gases (GHGs)
Components of the atmosphere that absorb and emit
radiation within the infrared range, causing the Earth’s
surface temperature to increase.
H
Hazardous waste
Waste that is classified as hazardous (or the regulatory
equivalent) by the local regulatory authority.
L
LTIR
Lost Time Incident Rate is a standard OSHA metric that
calculates the number of incidents that result in time
away from work.
M
Major operating sites
A site or grouping of sites that produce or manage pe-
troleum, chemical, or manufactured products where
such products, their production or their exploration pro-
cesses have the potential to cause significant impact on
the environment or the safety and health of employees,
neighbors, or consumers.
Megawatt (MW)
Unit of power, equal to 1 million watts.
N
Non-hazardous waste
Waste that is not classified as hazardous (or the regula-
tory equivalent) by the local regulatory authority.
P
Paraxylene (PX)
Hydrocarbon in the xylene family used to produce PTA.
It is also a component of gasoline.
Polyethylene terephthalate (PET/
vPET)
Material widely used to manufacture bottles and other
containers for liquids, food and personal hygiene, house-
hold and healthcare products. PET flakes and films are
used to produce caps, trays and recipients. Because of
its transparency, strength, durability and high protection
barriers, PET presents no known health risks, is light
and recyclable, and has a wide range of applications
in reusable, temperature-sensitive packaging. PET has
replaced glass and aluminum, as well as other plastics
such as PVC and polyethylene, for making containers.
Polypropylene (PP)
Thermoplastic polymer, produced from the polymer-
ization of propylene monomer. Its properties include a
low specific gravity, great rigidity, resistance to relatively
high temperatures and good resistance to chemicals
and fatigue. PP has diverse applications, including for
packaging, textiles, recyclable plastic parts and differ-
ent kinds of containers, autoparts and polymer (plastic)
banknotes.
Propylene
Unsaturated, 3-carbon hydrocarbon, coproduct of the
cracking process at petrochemical complexes and a by-
product at oil refineries. It is used in the petrochemical
industry to produce PP, propylene oxide, cumene, isopro-
panol, acrylic acid and acrylonitrile. It is also converted
into a gasoline component by alkylation with butanes
or pentanes.
Propylene oxide
Compound produced from propylene and used to man-
ufacture commercial and industrial products, including
polyols, glycols and glycol-ethers.
Protected areas
Includes World Heritage Sites, Ramsar sites, IUCN Cate-
gory I-II, Natura 2000 sites.
See bp.com/protectedareas for details
Purified terephthalic acid (PTA)
Aromatic dicarboxylic acid, the main raw material in poly-
ester production. PTA is produced by the oxidation of
paraxylene. It is used to manufacture PET, which is then
used to make bottles for water, soft drinks and other
beverages, containers and other packaging, and poly-
ester fiber for rugs, clothing, furniture and industrial
applications, as well as other consumer products.
R
Recycled polyethylene
Terephthalate (rPET)
PET bottles are cleaned and crushed to produce new
PET products. Other rPET uses include carpets, fabrics
for the clothing industry, and fibers.
Glossary
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S
SBTi
Science Based Targets initiative (SBTi) is a collaboration
between the Climate Disclosure Project (CDP), the Unit-
ed Nations Global Compact, World Resources Institute
(WRI) and the World Wide Fund for Nature (WWF) to
help companies define a target of emissions reduction.
Scope 1, 2 and 3
Scope 1 are emissions directly related to the operations,
scope 2 are emissions related to utilities (indirectly) and
scope 3 are emissions that are generated up and down
the chain of a product creation and use (suppliers and
customers).
SDGs
Sustainable Development Goals.
Single-pellet technology™
The Single-pellet Technology creates a pellet where me-
chanically Recycled PET (rPET) flake is used as a raw
material feedstock in the virgin PET production process.
Once injected into the PET manufacturing process, the
rPET flake melts and the polymer is chemically integrated
allowing the rebuilding of polymer chains to create a new
PET resin pellet with an integrated recycle content of up
to 25% with performance equal to that of virgin PET.
Styrene monomer
Unsaturated hydrocarbon used to make a variety of plas-
tics, synthetic rubber, protective coatings and resins. It
is the main raw material in EPS production and used as
a solvent and chemical intermediate.
Sustainable emissions reduction
Sustainable Emission Reductions (SERs) result from ac-
tions or interventions that have led to ongoing reduc-
tions in Scope 1 (direct) and/or Scope 2 (indirect) GHG
emissions (carbon dioxide and methane) such that GHG
emissions would have been higher in the reporting year
if the intervention had not taken place. SERs must meet
three criteria: BP made a specific intervention that has
reduced GHG emissions, BP must be able to quantify the
reduction and it is expected to be ongoing. Reductions
are reportable for a 12-month period from the start of
the intervention/action.
T
Tier 1 process safety event
Losses of primary containment of greatest consequence
– causing harm to a member of the workforce, costly
damage to equipment, or exceeding defined quantities.
TRIR
“Total Recordable Incident Rate.” It is a calculation that
takes into account how many OSHA recordable incidents
your company has per number of hours worked.
Top management
Includes employees who are group leaders, senior-level
leaders or in other management positions.
W
Watt
Unit of power in the International System of Units (SI).
WEPs
Women’s Empowerment Principles.
Glossary
71
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Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Altamira
1,000
640
240
Cosoleacaque
610
185
15
Lerma
100
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Montreal
144
Alpek’s
Footprint
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Fayetteville, NC
170
64
Columbia, SC
640
725
Bay St. Louis, MS
430
15
Richmond, IN
66
31
Darlington, SC
26
Monaca, PA
123
36
Cincinnati, OH
33
45
Reading, PA
115
49
CANADA
(144)
USA
(2,568)
MEXICO
(2,790)
Note: rPET flake capacity was modified to reflect inputs / totals and may reflect rounding.
Kta: Thousand tons per year.
Source: Alpek estimates.
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Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Zárate
190
Pacheco
22
15
General Lagos
19
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Guaratingueta
46
Ipojuca
640
450
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Santiago
5
Puerto Montt
2
Punta Arenas
1
Concón
20
BRAZIL
(1,136)
CHILE
(28)
ARGENTINA
(246)
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Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Salalah
574
400
48
48
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
2,890
3,260
433
268
169
93
640
493
36
479
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Riyadh
11
Site
PTA
Resin
Sheet
Flake
Pellet
SPT
PP
EPS
Arcel
Other
Wilton
220
SAUDI
ARABIA
(11)
UK
(220)
OMAN
(1,072)
TOTAL
(8,366)
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In accordance with its commitment to sustainability, since
2015, Alpek has consistently reported its environmental,
social, governance (ESG) information using the Global Re-
porting Initiative (GRI) methodology. In 2020, Alpek made a
strategic shift on its reporting approach in order to provide
accurate and meaningful reporting, adopting a framework
that complies with disclosures from several sustainability
institutions.
Striving for continuous improvement, this report is the
first approach to an integrated report, and outlines its ESG,
sustainability and financial performance for the period
between January 1st and December 31, 2024 for all its glob-
al operations. It was prepared with reference to the GRI
Standards 2021 and 2016 versions, ensuring compliance
with the clarity, balance, comparability, completeness, and
timeliness principles, as a minimum.
Furthermore,
Alpek participates
in prominent
sustainability
indices, including
S&P CSA, CDP and
FTSE4Good, among
others.
Approach
to Reporting
This document aims to provide clear and transparent infor-
mation for Alpek’s stakeholders on the priorities related to
its material topics. There are no restatements of information
unless otherwise identified.
GRI: 2-2, 2-3, 2-4
CSA S&P: 1.1.1
We describe the frameworks used for this report below.
GRI
SASB
TCFD
Sustainable
Development
Goals (SDGs)
CDP
S&P
The Global Reporting Ini-
tiative is an international
independent standards
organization that helps
companies, governments
and organizations under-
stand and communicate
their impact on relevant
sustainability issues.
SASB enables businesses
to identify, manage and
communicate financially
relevant sustainability in-
formation to their inves-
tors. This Board published
standards with material
topics for each industry.
Alpek complies with SASB
Standards for the Chemi-
cal Sector.
TCFD developed a
framework to help pub-
lic companies and other
organizations disclose
more effectively their
climate-related risks and
opportunities through
their reporting processes.
The 2030 Agenda defined
17 SDGs to achieve a bet-
ter and more sustainable
future. They address glob-
al challenges every com-
pany and government
face, including poverty, in-
equality, climate change,
environmental protection,
peace and justice, among
others.
CDP is a non-profit orga-
nization that manages a
global disclosure system
for investors, companies,
countries and regions to
manage their environ-
mental impacts.
S&P developed the Cor-
porate Sustainability As-
sessment (CSA), which
applies a best-in-class
approach to evaluate
management of ESG
issues in companies
and industries world-
wide. Based on their
performance, compa-
nies receive scores and
percentile ratings for
approximately 20 finan-
cially relevant sustain-
ability criteria.
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2024
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2024
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Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Material Risk
Climate Change Strategy
Circularity & Product Responsibility
Sustainability Risk & Impact Management
Business Case
Helps mitigate operational and financial risks, ensures regulatory
compliance, reduces future costs, and meets investor and stakeholder
expectations. By reducing carbon emissions and improving energy
efficiency, companies can save costs and enhance their brand reputation.
Investing in renewable energy attracts conscious consumers and investors,
fosters innovation, and drives competitive advantage, ensuring long-term
business resilience and sustainability.
It reduces costs, enhances resource efficiency, ensures regulatory
compliance, meets consumer demand for sustainable products, and
bolsters reputation. By integrating circular economy principles, Alpek
will minimize waste, maximize resource use, and drive innovation in
product design and business models. This approach reduces supply chain
dependency, fortifies resilience, and differentiates brands in the market.
Properly integrated across the organization, Sustainability Risk and
Impact Management will ensure long-term business continuity
by mitigating risks, enhancing operational resilience, increasing
adaptation, building stakeholder trust, attracting investment, and
fostering innovation.
Business Impact
• Save on operating and tax costs in the long term
• First-mover advantage in carbon abatement will lead to cost reductions
as well
• Minimization of acute physical climate risks by enhancing operational
and organizational preparedness
• Achieve cost reductions by maximizing resource use and minimizing
waste expenditures
• Differentiate offerings with circular products, enhancing business
continuity and capturing growing market opportunities, which will
translate into increased revenues
• The most significant impact is risk reduction through strategic
foresight and operational preparedness, resulting in cost avoidance
and potential revenue generation from new market opportunities
Business Strategies
• Identify more CO2 reduction projects at business units
• Optimize energy usage through best practices and smart technologies
• Transition to greater electrification and adoption of renewable/less
carbon-intensive energy sources
• Identify CO2 reduction projects at business units
• Evaluate and adopt CO2 offsetting technologies
• Conduct large-scale training exercises to raise climate change awareness
and its connection to operational continuity
• Assess technologies for chemical recycling & biodegradability
• Expand capacities for recycling post-industrial (EPS/PP) and post-
consumer (PET) waste
• Advocate for circularity and promote Alpek’s sustainable products
• Identify and implement additional post-industrial waste and
wastewater reduction projects at business units
• Conduct Lifecycle Assessments for Alpek’s main products
• Align compensation structures with ESG goals
• Establish ESG Committees at the Board, C-Suite, and business unit
levels with clear objectives
• Provide training to familiarize the organization with new ESG
frameworks
• Standardize and enhance data collection, review processes, and
communication efforts
Target or Metric
• 27.5% absolute emissions reduction for Scope 1 and Scope 2
• 13% absolute emissions reduction for Scope 3
• rPET capacity of 300,000 tons across Alpek’s operations
• rPET capacity of 268,000 tons, which represents 89% of progress
towards the 2025 goal
•
Target yet to be established due to the material issue’s novelty
Target Year (if applicable)
• 2030
• 2025
• Not Applicable
MAIN MATERIAL ISSUES
GRI: 3-2, 3-3 | CSA S&P: 1.3.2, 1.3.4, 1.3.5
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2024
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Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
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RISK ANALYSIS
The company counts with several measures, processes and platforms to overview and manage its risks and mitigating actions.
Risk Exposure Review
• Annually: The company conducts a strategic review of each business unit, analyzing market conditions, energy sourcing, new legislation, the global economic situation, and overall expectations.
• On-demand: For each strategic decision, the company assesses potential risks to execution and profitability and identifies mitigation strategies.
Risk Culture
• For the development of products, the company evaluates the projects and investments based on determined guidelines and methodologies which encompass risk assessment. Based on this need, the company
ensures that its management employees receive training to identify and quantify the risks related.
• Everyone working at Alpek has the responsibility and authority to report potential risks through the company. They can do it by the superior or use our hotline and give their concern. The risk potential is then
evaluated, and measures are taken.
• In Alpek, we have different protocols to provide objective identification of situations and activities in our facilities that pose a risk to personnel health and safety.
• Executive and line managers link some of their financial incentives to the most critical identified risks by monitoring these risks and developing mitigating actions.
RISK MANAGEMENT PROCESS
GRI: 201-2 | CSA S&P: 1.4.2
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2024
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Alpek’s
People
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Capital
Financial
Review
To minimize the potential impacts of the top 10 identified strategic risks, Alpek established and implemented a mitigation action plan for each risk among all potentially affected Business Units. Alpek’s Audit Team monitors the status of each mitigating
plan throughout the year. All mitigating actions must be validated by the Audit Team to ensure the action plans are appropriate. The risks and mitigating actions are regularly discussed and approved by Alpek’s Board and Top Executive Team Committees.
R1
Cyberattacks
R2
Dependence on Mexico’s Raw Material Supply
R3
Delays and Permits of Raw Material Imports
R4
New Competition, Less Margin
R5
Plastic Pollution Regulation and Social Pressure
• Infrastructure update
• Security Policy
• Employee Awareness Campaigns
• Insurance contract
• Continous search of national and foreign
supply contracts
• Follow-up to import permit paperwork with
Custom Authorities
• Increase the sale contract percentage
• Cost structure optimization
• Recycling strategy
• Development of alternative products
• Awareness campaigns on the benefits
of “recyclable at scale” plastics
• Analysis of recycling and CCUS* technologies
R6
Raw Material Supply Chain Issues
R7
Access to Potable Water
R8
Business Competitiveness vs. Asian Market Prices
R9
Imported Fixed Assets Verification
R10
Specific Supplier Dependence
• Monitoring of raw material markets
• Preserve optimal inventory levels
and critical materials
• Continous searching for alternative
raw materials
• Procurement and development
of specialized personnel
• Government relationship to monitor
and support the situation
• Continuous monitoring of studies and
indicators
• Analyze potential measures against
disloyal practices
• Business competitiveness analysis
• Footprint optimization
• Implementation of a control system to
track the documentation
• Decommissioning and removal of assets
• Negotiation with new suppliers
• Assure contracts with existing key suppliers
MITIGATION ACTIONS
GRI: 3-3 | CSA S&P: 1.4.3
STRATEGIC RISKS
* Carbon Capture, Utilization, and Storage
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2024
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Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Alpek recognizes the importance of identifying and assessing emerging risks that could impact its operations and supply
chain in the medium and long term. The company has proactively implemented strategies to better understand and mitigate
these risks.
Impact of Ukraine-Russia Conflict on Raw Material Supply
• The Russia-Ukraine conflict has significantly disrupted global energy markets and supply chains, presenting challenges for
petrochemical companies, including rising feedstock costs driven by energy price volatility. These increased costs elevate
operational expenses and weaken overall competitiveness.
• To mitigate these risks, Alpek has implemented strategic measures, such as diversifying its procurement sources beyond a
single region and expanding its supplier base. Looking ahead, the company plans to establish strategic partnerships with
key producers, enhance storage capacity, and diversify transportation networks. Furthermore, Alpek conducts regular
monitoring of raw material costs and market dynamics, enabling agile responses to market shifts and safeguarding its
competitive position.
Global Supply Chain Impact Due to Red Sea Instability
• Alpek operates within a complex global supply chain, with exposure to international markets. Ongoing geopolitical tensions
in the Middle East due to the Israel-Hamas conflict continued to escalate during 2024 disrupting maritime trade routes,
notably affecting the Red Sea and transit through the Suez Canal, a key passage between East and West. These disruptions
introduced logistical challenges, including delayed transit times due to rerouted shipping, stock shortages, and elevated
logistics costs, which could impact Alpek’s operational efficiency and competitiveness.
• To address these challenges, Alpek has implemented proactive measures, including maintaining close communication
with shipping companies, optimizing logistics by adjusting reorder points, and closely monitoring container pricing.
These actions are designed to strengthen supply chain resilience, minimize operational risks, and sustain the company’s
competitive position in a volatile global environment.
MITIGATION ACTIONS FOR CLIMATE-RELATED RISKS
CSA S&P: 2.5.11
EMERGING RISKS
Alpek has implemented comprehensive mitigation measures at all sites located near coastal zones to anticipate and minimize
the impacts of climate events, particularly those involving high water levels such as coastal, river, and urban flooding, cyclones,
tsunamis, and more.
These mitigation measures consist of a tiered response plan based on rising water levels, ensuring a systematic and
effective approach to managing risks.
The process includes:
• Reducing Operational Expenditures: The initial step involves scaling back non-essential operations to minimize costs and
focus resources on critical activities.
• Minimizing Operational Workforce: As conditions worsen, the company reduces the number of on-site personnel to ensure
their safety while maintaining essential functions.
• Scheduled Shutdown of Site: If water levels continue to rise, a planned shutdown of the site is initiated, ensuring all
processes are safely halted.
• Removing Reactor Contents and Final Shutdown: In extreme scenarios, the contents of reactors are removed to prevent
potential hazards, followed by a complete site shutdown.
However, the company is further understanding the results of the physical climate risk assessment to determine a mitigation
plan for the other potential risks evaluated in the analysis.
CSA S&P: 1.4.3
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2024
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Alpek’s
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Financial
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SOCIAL
EMPLOYEE BREAKDOWN BY POSITION
GRI: 2-7, 405-1 | CSA S&P: 3.1.2, 3.1.3
Employee Breakdown by Type
(Number of Employees)
2022
2023
2024
Total Employees
7,259
5,930
5,514
Management
334
365
319
Administrative
1,954
1,790
1,752
Operative
4,971
3,775
3,443
Female
1,191
1,090
1,032
Management
55
68
62
Administrative
615
587
591
Operative
521
435
379
Male
6,068
4,840
4,482
Management
279
297
257
Administrative
1,339
1,203
1,161
Operative
4,450
3,340
3,064
EMPLOYEE BREAKDOWN BY COUNTRY
GRI: 2-7, 405-1 | CSA S&P: 3.1.3
Employee Breakdown by Country
(Number of Employees)
2022
2023
2024
Total Employees
7,259
5,930
5,514
Management
334
365
319
Administrative
1,954
1,790
1,752
Operative
4,971
3,775
3,443
Mexico
3,331
2,171
2,092
Management
143
143
130
Administrative
907
868
936
Operative
2,281
1,160
1,026
Canada
69
71
64
Management
2
9
6
Administrative
23
18
21
Operative
44
44
37
United States
1,712
1,566
1,375
Management
99
124
101
Administrative
501
438
375
Operative
1,112
1,004
899
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2024
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Alpek
2024
Performance
Alpek’s
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Employee Breakdown by Country
(Number of Employees)
2022
2023
2024
Argentina
413
419
370
Management
20
18
17
Administrative
108
119
109
Operative
285
282
244
Chile
267
276
251
Management
1
5
3
Administrative
70
42
41
Operative
196
229
207
Brazil
624
548
507
Management
14
14
14
Administrative
159
162
133
Operative
451
372
360
United Kingdom
103
106
101
Management
7
10
9
Administrative
31
45
47
Operative
65
51
45
Oman
620
627
607
Management
32
18
11
Administrative
112
58
52
Operative
314
551
544
Employee Breakdown by Country
(Number of Employees)
2022
2023
2024
Saudi Arabia
64
68
68
Management
4
2
2
Administrative
8
6
5
Operative
52
60
61
Other Countries - Management
56
78
79
United Arab Emirates
45
66
70
Ireland
1
1
-
Spain
1
1
-
Germany
1
1
1
Austria
1
1
1
Shanghai
6
6
6
Singapore
1
1
-
Peru
-
-
1
Denmark
-
1
1
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2024
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Alpek
2024
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Alpek’s
Governance
Alpek’s
People
Social
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Capital
Financial
Review
EMPLOYEE BREAKDOWN BY AGE
Employee Breakdown by Type
(Number of Employees)
2022
2023
2024
Total Employees
7,259
5,930
5,514
Over 50 years old
1,816
1,364
1,268
Male
1,625
1,194
1,116
Female
191
170
152
30-50 years old
4,121
3,547
3,319
Male
3,380
2,865
2,664
Female
741
682
655
Under 30 years old
1,322
1,019
927
Male
1,063
781
702
Female
259
238
225
GRI: 2-7
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2024
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Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
DIVERSITY, EQUITY & INCLUSION
WORKFORCE BREAKDOWN BY GENDER
GRI: 2-7 | CSA S&P: 3.1.2
Female Employee Breakdown by Position
(As % of Total Employees)
2022
2023
2024
Total Female Employees
16%
18%
19%
Management (Junior, Middle and Top Management)
16%
19%
19%
In Top Management
5%
6%
6%
In Middle Management
10%
12%
10%
In Junior Management
21%
23%
25%
Administrative
31%
33%
34%
Operative
10%
12%
11%
Share of women in management positions
in revenue-generating functions
(as % of all such managers)
12%
27%
30%
Share of women in STEM-related positions
(as % of total STEM positions)
14%
15%
16%
WORKFORCE BREAKDOWN BY RACE
GRI: 405-1 | CSA S&P: 3.1.3
Total Workforce Distribution
(As % of Total Employees)
2022
2023
2024
Asian
1%
13%
15%
White
22%
35%
30%
Hispanic or Latino
57%
45%
49%
Indigenous or Native American
0%
1%
1%
African American or Black
4%
5%
4%
Others, two or more races
14%
1%
1%
Non-Identified
1%
0%
0%
Total Alpek Workforce (%)
100%
100%
100%
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Alpek
2024
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Alpek’s
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Review
Junior, Middle, and Senior Management Workforce Distribution
(As % of Junior, Middle, and Senior
Management Employees)
2022
2023
2024
Asian
1%
11%
10%
White
30%
32%
32%
Hispanic or Latino
54%
45%
52%
Indigenous or Native American
0%
1%
1%
African American or Black
1%
1%
1%
Others, two or more races
15%
7%
4%
Non-Identified
-
-
0%
Total %
100%
100%
100%
(Total Alpek’s junior, middle, and senior management identified in 2024: 319 employees)
Alpek Employees with a Disability
(Number of Employees)
2022
2023
2024
With a disability
15
16
20
WORKFORCE BREAKDOWN BY RACE AT MANAGEMENT LEVEL
GRI: 405-1 | CSA S&P: 3.1.3
WORKFORCE BREAKDOWN BY DISABILITY
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2024
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Alpek
2024
Performance
Alpek’s
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
HUMAN CAPITAL MANAGEMENT
TRAINING AND DEVELOPMENT
GRI: 404-1 I CSA S&P: 3.3.1
Training & Development
(Average Training Hours per Employee)
2022
2023
2024
Average Training Hours | Employees
22
34
29
Female
37
32
24
Male
19
34
30
Operative
11
25
26
Administrative and Management
41
49
32
Average amount spent per FTE, USD
425
388
271
HUMAN CAPITAL RETURN ON INVESTMENT
CSA S&P: 3.3.3
Human Capital Return on Investment
($ Million MXN)
2022
2023
2024
Total Revenue
212,435
138,159
137,409
Total Operating Expenses
188,344
133,713
131,730
Total employee-related expenses (salaries + benefits)
7,538
6,976
6,996
Human Capital ROI1
4.2
1.6
1.8
Total Employees
7,259
5,930
5,514
1. Human Capital ROI calculated based on: (Total Revenue – (Total Operating Expenses - Total employee-related expenses))/ Total employee-related
expenses.
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2024
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Alpek
2024
Performance
Alpek’s
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
External and Internal
Employee Hiring
(Number of Employees)
2022
2023
2024
Total filled vacancy positions
1,557
21%
1,087
18%
673
12%
Internal Hiring
633
9%
307
5%
252
5%
Male
511
7%
225
4%
194
4%
Female
122
2%
82
1%
58
1%
External Hiring
924
13%
780
13%
421
8%
Male
698
10%
605
10%
328
6%
Female
226
3%
175
3%
93
2%
EMPLOYEE HIRING BREAKDOWN BY AGE
GRI: 401-1 | CSA S&P: 3.3.4
Employee Hiring by Age
(Number of Employees)
2022
2023
2024
Total filled vacancy positions
1,557
21%
1,087
18%
778
14%
Over 50 years old
170
2%
121
2%
54
1%
Male
132
2%
97
2%
41
1%
Female
38
1%
24
0%
13
0%
30-50 years old
724
10%
461
8%
304
6%
Male
580
8%
349
6%
250
5%
Female
144
2%
112
2%
54
1%
Under 30 years old
663
9%
505
9%
420
8%
Male
497
7%
384
6%
231
4%
Female
166
2%
121
2%
189
3%
INTERNAL AND EXTERNAL EMPLOYEE HIRING
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2024
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Alpek
2024
Performance
Alpek’s
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Alpek’s
People
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Capital
Financial
Review
MATERNITY & PATERNITY LEAVE CASES
GRI: 401-3
TOTAL EMPLOYEE TURNOVER
GRI: 401-1 I CSA S&P: 3.3.8
Total Employee Turnover Rate1
(% of Total Employees)
2022
20232
2024
Total
15.90%
36.60%
11.75%
Over 50 years old
2.90%
10.00%
2.94%
Male
2.50%
9.40%
2.61%
Female
0.40%
0.60%
0.33%
Between 30 and 50 years old
7.10%
15.80%
5.93%
Male
5.80%
13.10%
4.97%
Female
1.30%
2.70%
0.96%
Below 30 years old
5.90%
10.80%
2.88%
Male
5.00%
9.20%
1.99%
Female
0.90%
1.60%
0.89%
Maternity and Paternity Leave
(Number of Cases)
2022
2023
2024
Maternity leave
55
36
35
Paternity leave
102
67
107
Reincorporation after Maternity or Paternity leave
87
86
122
Reincorporation Rate
55%
83%
86%
1. There was a change in the calculation methodology for this indicator in 2022. It is calculated based on the total of employees who leave the organization divided by the total of
employees at the end of the year.
2. Increased turnover rate due to closure of manufacturing sites in 2023.
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2024
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Alpek
2024
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Alpek’s
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Alpek’s
People
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Financial
Review
Voluntary Employee Turnover Rate
(% of Total Employees)
2022
2023
2024
Total
10.80%
11.90%
5.48%
Over 50 years old
1.90%
1.90%
1.20%
Male
1.60%
1.70%
1.03%
Female
0.30%
0.20%
0.16%
Between 30 and 50 years old
4.60%
5.20%
2.58%
Male
3.60%
4.30%
2.25%
Female
1.00%
0.90%
0.33%
Below 30 years old
4.40%
4.80%
1.70%
Male
3.70%
4.10%
1.09%
Female
0.80%
0.70%
0.62%
VOLUNTARY EMPLOYMENT TURNOVER RATE
GRI: 401-1 I CSA S&P: 3.3.8
EMPLOYEE ENGAGEMENT RATE
CSA S&P: 3.3.9
New 2024 Engagement Tool: HUGO
High Performance Components
Korn Ferry Model Dimensions
Customized Dimensions
Engagement
• Clear & Promising Direction
• Confidence in Leaders
• Quality & Customer focus
• Respect & Recognition
• Development opportunities
• Pay & Benefits
• Diversity and Inclusion
• Corporate Social Responsibility
• Wellbeing
Enablement
• Performance Management
• Authority & Empowerment
• Resources
• Training
• Collaboration
• Work, Structure, & Process
88
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2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Employee Highly Engagement 1
(% Actively Engaged Employees)
2019
2020
2021
20222
2023
2024
Employees with top level of Engagement
70%
82%
74%
74%
71%
71%
Data coverage of Alpek Employees
87%
78%
68%
68%
86%
86%
1. Scores from 4 to 5 on a 5-point scale are considered highly engaged employees.
2. In 2021, Alpek started to carry out its employee engagement assessments every two years to develop and implement action plans to improve employee
engagement. Therefore, 2023 and 2024 have the same score.
FREEDOM OF ASSOCIATION
GRI: 2-30 I CSA S&P: 3.1.5
CSA S&P: 3.3.9
Employee Freedom of Association
(% of Employees)
2022
2023
2024
Employees represented by an independent trade union
or by collective bargaining
52%
35%
36%
89
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Financial Statements
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Management
2024
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Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
CHAMBERS & ASSOCIATIONS PARTICIPATION
Chambers and Associations Participation
(Name of the Institutions)
Argentina
Asociación Argentina de Poliestireno (AAPE)
Cámara de exportadores (CERA)
Cámara Comercio Argentina-Mexicana
Comité industrial Medio Ambiente Campana-Zarate (CICACZ)
Asociación Nacional de Industrias de Materiales Aislantes (ANDIMA)
Cámara de la Industria Química
Asociación Civil Argentina Pro-Reciclado del PET (ARPET)
Cámara de Industria Química y Petroquímica (CIQyP)
Cámara Argentina de Industria Plástica (CAIP)
Instituto Petroquímico Argentino (IPA)
Cámara Argentina de la Industria de reciclados plásticos (CAIRPLAS)
Brazil
Associação Brasileira da Indústria do PET (ABIPET)
Sindicato das Indústrias de Produtos Químicos para Fins Industriais,
Asociación Industrial Química Brasileña (ABIQUIM)
Canada
Montreal East Industry Association
Engineering Association - Quebec
Chile
Cámara Chilena de la Construcción (CChC)
Asociación Gremial de Industriales del Plástico
Cámara Chileno-Mexicana
Centro de Envases y Embalajes de Chile (CENEM)
Mexico
AISTAC – Asociación de Industriales del Sur de Tamaulipas
ASOLMEX (Asociación Mexicana de Energía Solar)
Asociación Nacional de Industrias del Plástico (ANIPAC)
AMH2 (Asociación Mexicana de Hidrógeno)
Asociación Nacional de la Industria Química (ANIQ)
Ecología y Compromiso Empresarial A. C.
Alianza por la Eficiencia Energética (ALENER)
Eriac Capital Humano, A.C.
Asociación Petroquímica y Química Latinoamericana (APLA)
Red Circular / Plan de Manejo de Residuos
Cámara de la Industria de Transformación de Nuevo León (CAINTRA)
Comisión de la Industria del Plástico, Responsabilidad y Desarrollo Sustentable (CIPRES)
GRI: 2-28 I CSA S&P: 3.6.2
90
Annexes
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Chambers and Associations Participation
(Name of the Institutions)
Mexico
Asociación Nacional de Fabricantes de Pintura y Tintas (ANAFAPYT)
CESPEDES (Comisión de Estudios del Sector Privado para el Desarrollo Sustentable)
ACE (Asociación de Comercializadores de Energía)
AMGN (Asociación Mexicana de Gas Natural)
ISSC International Sustainability and Carbon Certification
Red del Pacto Mundial (UN Global Compact)
Confederación de Cámaras Industriales (CONCAMIN)
Movimiento Congruencia, A.C.
Oman and Saudi Arabia
Oman American Business Center
Environment Society of Oman
Chartered Institute of Management Accountant
Omani Society for Human Resources Management
Association of Chartered Certified Accountants UK
Saudi Organization for Chartered and Professional Accountants
Saudi Council of Engineers
Saudi Engineering Council (SEC)
United Kingdom
British Plastics Federation
Northeast England Process Industry Cluster
Chemical Industry Association
Northeast England Chamber of Commerce
Committee of PET Manufacturers in Europe
RECOUP Plastics Recycling
United States
Carolinas Recycling Association
National Association for PET Container Resources
EPS Industry Alliance (EPSIA)
The Recycling Partnership
MS Economic Council
Wayne County IN Chamber of Commerce
Indiana Chamber of Commerce
PET Resin Association
Plastic Industry Association
American Chemistry Council (ACC)
United Way of Beaver County & Lake County
Ameripen
SCS (Styrenics Circular Solutions)
Sustainability Packaging Association
Association of Plastic Recycling
South Carolina Manufacturers Alliance
Pennsylvania Resources Council
Circular Indiana (Indiana Recycling Coalition)
91
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
SAFETY PROGRAMS
OHS PROGRAMS
GRI: 403-1, 403-2, 403-7, 403-8, 403-9 | CSA S&P: 3.4.2
Alpek’s business units have all implemented Occupational Health and Safety (OHS) programs to comply with safety
requirements in their operations. These activities include:
• Hazard identification and analysis
• Action plans to reduce, mitigate, and eliminate safety hazards
• Internal and external emergency action plans
• Measuring the Total Recordable Incident Rate (TRIR)
All employees are involved in safety processes, either through direct participation or access to communication
channels and consultation on the programs that structure the OHS system. Alpek aims their participation,
contribution, and consultation through the following OHS programs (among others):
• Internal Commission for Accident Prevention
• Participation in campaigns and SMS awareness training
• Effective participation in recording deviations
• Effective participation in behavioral audits
• Participation in daily safety dialogues
• Participation in the disclosure of hazard and risk assessments
• Disclosure and consultation of the PCMSO Program (Occupational Health Medical Control Program)
• Dissemination and Consultation of the PPRA Program (Environmental Risk Prevention Program)
• Disclosure and consultation of preliminary risk analysis
• Preparation and consultation of task safety analysis
• Transparency Channel – for reporting, complaints, and inquiries regarding integrity, ethics, and transparency
in the company
Some of the activities covered by the OHS programs include:
• Industrial Activities (operational maneuvers, equipment inspection, maintenance, electricity services, process
control, activity releases, sample collection)
• Mechanical Workshop Activities (maintenance, cargo handling, lubrication, calibration, repair, cutting and welding)
• Transport (internal and external movement of employees)
• Logistics (storage, material handling, packaging, production planning, supply and distribution)
• Laboratory (chemical, physico-chemical analysis, control of materials, processes, and products)
• Engineering (project design, construction monitoring, construction inspection, and process optimization techniques)
• Patrimonial (preservation of company assets, access control, and internal security)
• Health Service (urgent and emergency care, occupational medical care, periodic examinations, issuance of technical
reports, and health program monitoring)
• Emergency Assistance (incident response, fire, explosions, leaks, spills, and occupational accidents)
• Warehousing (Receipt of materials, product storage, material movement, and distribution)
92
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
TOTAL WORKFORCE SAFETY
GRI: 403-9, 403-10 | SASB: RT-CH-320a.1 | CSA S&P: 3.4.3, 3.4.4, 3.4.5
Total Personal Safety Overview
(Employees + Contractors)
20201
20211
2022
2023
2024
Total Recordable Incidents
(number of incidents)
68
63
66
47
49
Incapacitating Incidents
(number of incidents)
40
42
42
30
34
Non incapacitating Incidents
(number of incidents)
28
21
24
17
15
Fatalities
(number of incidents)
0
0
1
0
0
Lost days
(number of days)
1,931
1,102
1,228
1,005
1,150
TRIR – Total Recordable Incident Rate
(200,000 hours worked)
0.73
0.61
0.57
0.42
0.51
LTIR – Lost Time Incident Rate
(200,000 hours worked)
0.43
0.40
0.36
0.27
0.35
Hours Worked by Alpek Employees & Contractors
(number of hours)
18,540,338
21,077,638
23,156,390
22,565,712
19,379,039
1. Personal safety Data of 2020 and 2021 Includes Employees + Contractors working in all sites; Plants, Offices and Warehouses
Employee Safety Overview
20201
20211
2022
2023
2024
Total Recordable Incidents
(number of incidents)
48
49
48
34
39
Incapacitating Incidents
(number of incidents)
28
33
33
23
28
Non incapacitating Incidents
(number of incidents)
20
16
15
11
11
Fatalities (number of incidents)
0
0
0
0
0
TRIR – Total Recordable Incident Rate
(200,000 hours worked)
0.72
0.70
0.65
0.46
0.62
LTIR – Lost Time Incident Rate
(200,000 hours worked)
0.42
0.47
0.45
0.31
0.44
Hours Worked by Employees
(number of hours)
13,287,314
14,003,671
14,764,474
14,806,171
12,626,830
1. Personal Safety Data of 2020 and 2021 Includes Employees + Contractors working in all sites; Plants, Offices and Warehouses
EMPLOYEES BREAKDOWN (INCIDENTS)
93
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2024
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Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
CONTRACTORS BREAKDOWN (INCIDENTS)
GRI: 403-7, 403-9, 403-10 | SASB: RT-CH-320a.1 | CSA S&P: 3.4.3, 3.4.4, 3.4.5
CSA S&P: 3.4.6
Contractors Safety Overview
20201
20211
2022
2023
2024
Total Recordable Incidents
(number of incidents)
20
14
18
13
10
Incapacitating Incidents
(number of incidents)
12
9
9
7
6
Non incapacitating Incidents
(number of incidents)
8
5
9
6
4
Fatalities
(number of incidents)
0
0
1
0
0
TRIR – Total Recordable Incident Rate
(200,000 hours worked)
0.76
0.40
0.43
0.34
0.30
LTIR – Lost Time Incident Rate
(200,000 hours worked)
0.46
0.25
0.21
0.18
0.18
Hours Worked by Contractors
(number of hours)
5,253,024
7,073,967
8,391,916
7,759,541
6,752,209
1. Personal Safety Data of 2020 and 2021 Includes Employees + Contractors working in all sites; Plants, Offices and Warehouses.
PROCESS SAFETY EVENTS TIER 1
Process Safety Events Tier 1
2022
2023
2024
Number of tier 1 process safety events per 1,000,000 hours
0.73
0.04
0.00
Alpek has thoroughly identified the Process Safety Events that have occurred at its sites during 2024, in accordance with the
definition established by the Center for Chemical Process Safety (“CCPS”).
94
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Financial Statements
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
HUMAN RIGHTS AND CODE OF ETHICS
HUMAN RIGHTS
CSA S&P: 3.2.1, 3.2.2
Alpek has implemented a Human Rights Policy as a public document to mitigate any potential human rights violations within its operations.
As part of this mitigation process, Alpek ensures full compliance with national and international labor regulations, commits to the UN Global Compact Principles, and adheres to the ILO Convention recommendations. This ensures that all Alpek sites have
the necessary measures in place to respect the human rights of employees and nearby communities.
All cases of human rights violations can be reported through the Integrity and Transparency Helpline and are addressed promptly.
Additionally, in 2023, Alpek published its Supplier Code of Conduct, which specifically references human rights in its “Principles” (5 vi.) as follows:
a. At Alpek, we support and respect the principles established in the United Nations Universal Declaration of Human Rights. We encourage Suppliers to have a diverse workforce and provide a workplace free from discrimination or any other form of abuse.
b. Harassment, including unwelcome verbal, visual, physical, or other conduct of any kind that creates an intimidating, offensive, or hostile work environment will not be tolerated. Employment decisions shall be based on qualifications, skills, performance,
and experience.
c. Supplier employees shall receive compensation and benefits that comply with Applicable legal regulations, ensuring that they work in compliance with all Applicable legal regulations and industry standards regarding the number of hours and days
worked. The supplier employees will have clear written employment information for all employees that define remuneration, deductions, and terms of employment.
d. This policy (Code) is supported by Alpek’s Humans Right Policy (PO-ALPEK-CH-04).
The scope of this Supplier Code of Conduct applies to all suppliers, who must respect and adhere to the Code when conducting business with or on behalf of Alpek. Suppliers are also expected to apply this Code and their relevant policies throughout their
supply chain, ensuring compliance by their parent company, affiliates, employees, agents, suppliers, contractors, sub-contractors, and related third parties. The Code sets out guidelines for these business partners to ensure that all interactions can be
monitored and reviewed for improvement.
Alpek also ensures that employees who become new parents have access to leave time benefits with their newborn or adopted children.
95
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2024
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Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
CODE OF ETHICS AND HUMAN RIGHTS BREACHES
GRI: 2-26, 2-27, 205-3, 406-1 | CSA S&P: 1.5.3, 1.5.4, 1.5.5, 3.2.3, 3.2.4
The following are the results from Alpek’s Integrity and Transparency Helpline1:
In response to the verified complaints process, and in accordance with Alpek’s Human Rights and Code of Ethics Policy, the
following summarized actions were issued and documented in response to the previously mentioned cases:
• Equal remuneration. Action: Detailed verbal feedback.
• Corruption – Bribery against the Company. Action: Detailed verbal feedback, collaborator dismissal.
• Discrimination – Harassment. Action: Detailed verbal feedback, collaborator dismissal, commitment letter,
and personnel training.
• Conflict of Interest. Action: Detailed verbal feedback.
Additionally, as stated in the Due Diligence process, there is also a thorough mitigation plan set forth for every “verified” case
before it concludes. Depending on the severity of the case, the assigned responsible for the case makes a recommendation,
based on procedure, to have the local site handle mitigating actions, or escalate it to the top management, to instigate a
potential business unit training, culture, and mitigation action (for example, in case of Harassment).
1. Please refer to the “Code of Business Conduct” for further details on the Helpline process.
2. Following the internal process, all complaints (verified or not) are analyzed in an equal manner by Alpek’s auditing and human capital functions and are
fully investigated in a step-by-step escalation procedure. Those complaints which are verified through the process, are then acted upon and escalated to
action resolution are considered “verified”. “Total Complaints received” references all information sent through the integrity and transparency helpline,
both anonymous or identifiable, which then goes through the process and is categorized as “verified” or “non-verified”. “Non-verified” refers to those
complaints that are concluded without action after a case evaluation and resolution by the assigned responsible.
3. All non resolved complaints were due to timing, being received on the last 2 months of the year.
Breaches To Human Rights and Code of Ethics
(Number of Complaints and/or Issues)
2022
2023
2024
Human Rights
2
2
1
Forced Labor
0
0
0
Human Trafficking
0
0
0
Child Labor
0
0
0
Freedom of association
0
0
0
Right to collective bargaining
0
0
0
Equal Remuneration
2
2
1
Code of Ethics
9
10
5
Corruption – Bribery against the Government
0
0
0
Corruption – Bribery against the Company
3
2
2
Discrimination - Harassment
4
4
2
Customer Privacy Data
0
1
0
Conflicts of Interest
2
2
1
Money Laundering or Insider trading
0
0
0
Total of Verified and Actionable Complaints2
11
11
5
Total Complaints received2
14
20
15
Resolution during the year in analysis of Total Complaints received2
89%
100%
80%3
96
Annexes
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Financial Statements
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
ENVIRONMENTAL
ENVIRONMENTAL INVESTMENTS
Alpek is committed to investing in environmental initiatives focused on reducing emissions through energy optimization, as
well as minimizing waste generation, conserving water, promoting recycling, developing sustainable products, and imple-
menting environmental remediation and prevention measures.
Environmental Investments
($ Million USD)
2022
2023
2024
CAPEX Disbursed
NA
NA
26.8
Note: NA stands for information not available.
Significant Environmental and Water- Related
Incidents or Situations
(Number of Incidents)
2022
2023
2024
Non-compliance associated with environmental permits,
standards, and regulations
0
0
0
Governed by national, state, and local statuary permits and
regulations
0
0
0
GRI: 2-27 I SASB: RT-CH-140a.2 I CSA S&P: 2.15, 2.5.6
SIGNIFICANT ENVIRONMENTAL AND WATER RELATED INCIDENTS
Alpek is committed to ensuring that its operations do not harm the environment or the water bodies surrounding its sites. A
violation is deemed to have occurred when a recognized authority (e.g., a governmental agency, an independent commercial
or non-commercial regulator, etc.) determines that a law, regulation, or code related to environmental or ecological matters
has been breached. “Significant” incidents that result in fines or penalties are defined as those exceeding $10,000 USD (or the
equivalent amount in local currency).
CSA S&P: 2.1.4
97
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
BRA Results
Description
Number
of Sites
Material Biodiversity Risks
Total number of Alpek’s sites with a high or
very high Physical Scape Risk score
2
Water Scarcity, Water Condition, Air Condition,
Landslides, Fire Hazards, Extreme Heat, Tropical
Cyclones and Pollution
Total number of Alpek’s sites with a high or
very high Reputational Scape Risk score
0
Media Scrutiny
BIODIVERSITY RISK ASSESSMENT
“Chemicals and Other Materials Production” Industry
Risk Type
Impact/
Dependency
Ecosystem Service Type
BRF Indicators
Vulnerability
Level
Physical
Dependency
Provisioning Services
1.1 Water Scarcity
4
Physical
Dependency
Regulating & Supporting
Services - Enabling
2.2 Water condition
3
Physical
Dependency
Regulating Services - Mitigating
3.1 Landslides
4
Physical
Dependency
Regulating Services - Mitigating
3.2 Wildlife Hazard
3
Physical
Dependency
Regulating Services - Mitigating
3.5 Extreme Heat
3
Physical
Dependency
Regulating Services - Mitigating
3.6 Tropical Cyclones
4
Reputational
Impact
Pressures on Biodiversity
5.4 Pollution
5
Reputational
Impact
Environmental Factors
6.1 Protected/Conserved Areas
3
Reputational
Impact
Socioeconomic Factors
7.1 Indigenous Peoples (Ips);
Local Communities (LCs);
Lands & Territories
3
Reputational
Impact
Additional Reputational Factors
8.1 Media Scrutiny
5
GRI: 101-2, 101-4, 101-5, 101-6, 101-7 | CSA S&P: 2.6.1
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2024
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About
Alpek
2024
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Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
REPORTED EMISSIONS
GRI: 305-1 to 5 | TCFD: All elements | SASB: RT-CH-110a-1 | CSA S&P: 2.5.1 to 4
CO2 Emissions by Scope
(GHGP based)
(Millions of tons)
2019
2020
2021
2022
2023
2024
Scope 1
1.17
0.94
1.08
0.91
0.80
0.80
Scope 2
1.30
1.29
1.27
1.36
1.19
1.07
Total Scope 1 & 2
2.47
2.24
2.35
2.27
1.99
1.87
Scope 1 and 2
Emissions Intensity
2019
2020
2021
2022
2023
2024
Intensity (Tons CO2 Emissions /
Tons Produced)
0.56
0.35
0.37
0.36
0.37
0.31
Intensity (ktons CO2 Emissions /
MUSD Revenues)
0.40
0.42
0.31
0.22
0.26
0.25
CO2 Emissions
by Scope (SBTi based)
(Millions of tons)
2019
2020
2021
2022
2023
2024
Scope 1
1.33
1.10
1.16
0.95
0.81
0.81
Scope 2
1.47
1.43
1.47
1.40
1.20
1.08
Total Scope 1 & 2
2.80
2.54
2.63
2.35
2.02
1.89
Scope 3
20.95
21.31
24.65
25.11
22.24
24.43
TOTAL CO2 EMISSIONS INTENSITY
EMISSIONS
The following section includes the emissions reported in previous years; however, the emissions from newly acquired sites
emissions are reported following their acquisition and aligns with the financial consolidation of the Company.
The data in the following table may vary due to the integration of emissions from all acquired plants, regardless of the year,
in order to meet the SBTi criteria
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2024
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Alpek
2024
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Alpek’s
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Alpek’s
People
Social
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Natural
Capital
Financial
Review
SCOPE 3 EMISSIONS BREAKDOWN
OTHER GHG EMISSIONS & POLLUTANTS
GRI: 305-3 I CSA S&P: 2.5.3
GRI: 305-7 | CSA S&P: 2.3.4, 2.3.5, 2.3.6, 2.3.7 | SASB: RT-CH-110a.1 & RT-CH-120a.1
Scope 3 Emissions
(Millions of tons CO2e)
2019
2020
2021
2022
20231
2024
Purchased Goods and Services
7.27
7.37
7.80
7.69
6.922
6.99
Capital Goods
0.29
0.12
0.14
0.19
0.04
0.04
Fuel-and-energy-related- activities
(not included in Scope 1 or 2)
0.19
0.19
0.21
0.20
0.44
0.43
Upstream transportation and distribution
0.97
0.91
0.76
0.66
0.96
1.01
Waste generated in operations
0.02
0.02
0.02
0.04
0.03
0.03
Business travel
0.0003
0.0001
0.0001
0.0007
0.00062
0.0005
Employee commuting
0.01
0.01
0.01
0.01
0.003
0.003
Upstream leased assets
-
-
-
-
-
-
Downstream transportation and distribution
0.08
0.08
0.08
0.08
0.06
0.03
Processing of sold products
7.78
7.64
7.76
7.56
6.15
6.42
Use of sold products
2.23
2.88
5.81
6.76
5.97
7.64
End-of-life treatment of sold products
1.96
1.95
1.92
1.82
1.64
1.82
Downstream leased assets
-
-
-
-
-
-
Franchises
-
-
-
-
-
-
Investments
0.16
0.14
0.14
0.11
0.02
0.001
Other upstream
-
-
-
-
-
-
Other downstream
-
-
-
-
-
-
Total Scope 3
20.95
21.31
24.65
25.11
22.222
24.43
1. Scope 3 emissions from 2023 onward may differ from results of 2022, since the calculation methodology was reviewed by a third party consultant.
2. Adjustment was made from LY report to show improved verifiable data.
GHG Emissions by Gas
(tons)
2019
2020
2021
2022
2023
2024
NOx
779
455
498
405
308
457
SOx
95
263
30
94
84
76
Volatile Organic Compounds (VOCs)
816
674
711
984
807
801
Chemical Oxygen Demand
295
292
296
5,247
4,182
1,507
100
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2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
GHG EMISSIONS 3RD PARTY VERIFICATIONS
CSA S&P: 2.1.3
KPI
Location
Third Party
2019
2020
2021
2022
2023
2024
GHG emissions
CO2 Scope 1 & 2,
CH4, N2O, HFCs,
PCFs, NF, SF
Cosoleacaque, Ver., Mexico
The Climate Registry
Verified
Verified
Verified
Verified
Verified, waiting for certificate
Verified, waiting for certificate
Montreal, Quebec, Canada
The Climate Registry
-
Verified
Verified
Verified
Verified, waiting for certificate
Under current verification
Fayetteville, NC, USA
The Climate Registry
Verified
Verified
Verified
Verified
Verified, waiting for certificate
Under current verification
Columbia, SC, USA
The Climate Registry
Verified
Verified
Verified
Verified
Verified, waiting for certificate
Under current verification
Bay St. Louis, MS, USA
The Climate Registry
Verified
Verified
Verified
Verified
Verified, waiting for certificate
Under current verification
Charleston, SC, USA
The Climate Registry
Verified
Verified
Verified
Verified
Verified, waiting for certificate
Under current verification
Richmond, IN, USA
The Climate Registry
-
-
Verified
Verified
Verified, waiting for certificate
Under current verification
Reading, PA, USA
The Climate Registry
-
-
Verified
Verified
Verified, waiting for certificate
Under current verification
Altamira, TS, Mexico
The Climate Registry
-
-
-
Verified
Verified, waiting for certificate
Under current verification
Ipojuca, PE, Brazil
The Climate Registry
-
-
-
Verified
Verified, waiting for certificate
Under current verification
Zárate, Argentina
The Climate Registry
-
-
-
-
Verified, waiting for certificate
Under current verification
Pacheco, Argentina
The Climate Registry
-
-
-
-
Verified, waiting for certificate
Under current verification
Wilton, United Kingdom
The Climate Registry
-
-
-
-
Verified, waiting for certificate
Under current verification
Cincinnati, OH, USA
The Climate Registry
-
-
-
-
-
Under current verification
Salalah, Oman
The Climate Registry
-
-
-
-
-
Under current verification
Riyadh, Saudia Arabia
The Climate Registry
-
-
-
-
-
Under current verification
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2024
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Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Non-Hazardous Waste
(ktons)
2022
2023
2024
Total Generated
103.7
108.3
96.2
Total Recycled / Reused
30.9
30.0
22.3
Total Disposed
72.8
78.3
73.9
Hazardous Waste Disposal
(Thousand tons)
2022
2023
2024
Total Generated
1.8
1.8
1.8
Total Recycled / Reused
0.5
0.5
0.7
Total Disposed
1.3
1.2
1.1
Non- Hazardous Waste Disposal Destination
(ktons)
2022
2023
2024
Landfill
60.0
66.3
64.4
Incineration with energy recovery
3.8
0.0
8.8
Composted
8.7
-1
-1
Confined
0.2
3.8
0.0
Other
0.1
8.2
0.6
Total Disposed
72.8
78.3
73.9
1. According to CSA definition, Composted waste is considered recycled waste.
Hazardous Waste Disposal Destination
(ktons)
2022
2023
2024
Landfill
0.3
0.1
0.1
Incineration with energy recovery
0.07
0.7
0.8
Composted
0.05
-1
-1
Confined
0.2
0.2
0.0
Other
0.7
0.3
0.2
Total Disposed
1.3
1.2
1.1
Note: NA stands for information not previously disclosed.
1. According to CSA definition, Composted waste is considered recycled waste.
NON-HAZARDOUS WASTE GENERATION
HAZARDOUS WASTE GENERATION
NON-HAZARDOUS WASTE DISPOSAL DESTINATION
HAZARDOUS WASTE DISPOSAL METHOD
GRI: 306-3, 306-4 I CSA S&P: 2.3.1
GRI: 306-3, 306-4 | CSA S&P: 2.3.3 | SASB: RT-CH-150a.1
GRI: 306-5 | SASB: RT-CH-150a.1
GRI: 306-5 | SASB: RT-CH-150a.1
WASTE MANAGEMENT
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2024
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People
Social
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Capital
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Review
Waste Generation Breakdown
(% Over Total Waste Generation)
2022
2023
2024
Hazardous Waste Generated
1.7%
1.6%
1.8%
Non-Hazardous Waste Generated
98.3%
98.4%
98.2%
Total Waste Generated
100.0%
100.0%
100.0%
Hazardous & Non-Hazardous Waste Intensity
(Tons Total Waste / ktons Produced)
2022
2023
2024
Waste Generated
16.9
20.0
16.5
Waste Used/recycled/sold
5.0
5.6
3.9
Waste Disposed
11.9
14.5
12.6
WASTE GENERATION BREAKDOWN
WASTE INTENSITY
GRI: 306-3 I CSA S&P: 2.3.1
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2024
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People
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Capital
Financial
Review
ENERGY CONSUMPTION
GRI: 302-1, 302-3, 302-4 | CSA S&P: 2.2.2
CSA S&P: 2.2.2
Energy Consumption by Segment
(Million GJ)
20191
20201,2
20211,2
2022
2023
2024
Polyester
28.0
29.1
29.2
29.7
25.6
25.2
Plastics & Chemicals
5.3
3.8
5.5
3.7
3.1
3.1
Total
33.4
33.0
34.7
33.4
28.7
28.2
Energy Consumption by Fuel
(Million GJ)
20191
20201,2
20211,2
2022
2023
2024
Natural gas
14.6
13.3
15.2
13.8
12.0
11.4
Coal
0.3
-
-
-
-
-
Diesel
0.1
0.4
0.4
0.1
0.1
0.1
Fuel oil
0.0
0.0
0.0
0.3
0.2
0.2
Gasoline
0.0
0.0
0.0
0.0
0.0
0.0
Ethanol
0.1
0.1
0.0
0.0
0.0
0.0
Others
0.0
0.0
0.0
0.0
0.0
0.2
Total Direct Consumption
15.1
13.8
15.7
14.3
12.3
11.9
Electricity
7.0
7.1
7.6
7.5
6.6
6.2
% Carbon-free Electricity3
NA
NA
13%
19.7%
27.1%
39.6%
% of Renewable Electricity4
NA
NA
NA
NA
17.1%
18.1%
Steam
11.2
12.0
11.5
11.6
9.8
10.1
Indirect Energy Consumption
18.3
19.1
19.1
19.1
16.4
16.3
Total Energy Consumption
33.4
33.0
34.7
33.4
28.7
28.2
ENERGY CONSUMPTION BY FUEL TYPE
ENERGY
ENERGY INTENSITY
Energy Consumption intensity
(GJ / Ton Produced)
2019
2020
2021
2022
2023
2024
Intensity
7.6
5.2
5.5
5.3
5.3
4.7
1. Due to M&A at the end of 2020 and some changes in the current methodology, this information has been revised and adjusted.
2. The addition of 2 new plants at the end of 2020 (M&A NOVA EPS business) and the higher production of CPL, resulted in an increase in the total energy
consumption for 2021 vs. 2020.
3. Carbon-free electricity is estimated based on the mix of renewable energy from the electricity grids of some countries. Carbon-free electricity includes
nuclear energy.
4. According to CSA definition, renewable energy is generated through inexhaustible sources, excluding nuclear energy. iRECs are considered.
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2024
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2024
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Social
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Capital
Financial
Review
WATER MANAGEMENT
Alpek has various water management strategies. It has water treatment plants on most sites to ensure that discharged water is
of optimal quality. They measure quality parameters from a daily to monthly basis such as temperature, pH, Chemical Oxygen
Demand (COD), Biochemical Oxygen Demand (BOD), Suspended Solids, among other pollutants. Approximately 75% of Alpek’s
withdrawals are dedicated to cooling processes, and this water is subsequently returned to its sources in compliance with
applicable discharge quality standards.
Water Consumption
(Million m3)
2022
20231,2
2024
Total Withdrawals
149.2
133.9
140.4
Total Discharges
93.8
113.8
144.2
Total Consumption
55.4
20.2
-3.8
1. The variation in consumption between 2024 & 2023 against 2022 is attributed to inconsistencies in the discharge measurement systems at certain plants.
2. Update based on number reassessment.
Water Withdrawal by Source
(Million m3)
2022
2023
2024
Fresh surface water, including rainwater, rivers, and lakes
141.7
126.9
134.0
Municipal Water
1.5
1.5
1.5
Brackish surface water
-
-
0.0
Groundwater – renewable
0.9
0.7
0.5
Groundwater - non-renewable
-
-
0.0
Produced/Entrained water
1.1
0.9
1.0
Third-party sources
4.1
3.9
3.4
Total
149.2
133.9
140.4
GRI: 303-3 | CSA S&P: 2.4.2 I SASB: RT-CH-140a.1
GRI: 303-5 | CSA S&P: 2.4.2 | SASB: RT-CH-140a.1
GRI: 303-1, 303-2 I CSA S&P: 2.4.1
WATER WITHDRAWAL BY SOURCE
WATER CONSUMPTION
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2024
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Review
Water Discharge by Destination
(Million m3)
2022
2023
2024
Fresh surface water
86.2
101.4
132.6
Brackish surface water
5.0
7.4
6.8
Groundwater
-
0.0
0.0
Third-party destinations
2.6
5.0
4.8
Total
93.8
113.8
144.2
Water Management
(Million Cubic Meters)
2022
2023
2024
Treated
93.3
90.8
109.3
Recycled
0.2
0.2
0.1
Total Treated water
93.5
91.0
109.4
Water Intensity
(m3/ Tons Produced)
2022
2023
2024
Total Withdrawals
23.9
24.4
23.7
Total Consumption
8.9
3.7
-0.6
Water Risk Management
(Million m3)
2022
2023
2024
Operating Sites in Extremely High-Water Stress Areas (Number)
5
5
4
Water Withdrawals in Extremely High-Water Stress Operating Sites
million cubic meters
1.0
0.6
0.5
% of total withdrawals
0.7%
0.4%
0.37%
Water Consumptions in Extremely High-Water Stress Operating Sites
million cubic meters
0.4
0.2
0.2
% of total consumption
0.7%
1.0%
-4.5%
GRI: 303-1 I CSA S&P: 2.4.5, 2.4.6 I SASB: RT-CH-140a.1
GRI: 303-4 | CSA S&P: 2.4.2 I SASB: RT-CH-140a.1
WATER INTENSITY
WATER RISK MANAGEMENT
WATER DISCHARGE BY DESTINATION
WATER TREATMENT
Alpek diligently monitors the water risk across its sites using the WRI Aqueduct platform. Based on the analysis results, Alpek
formulates strategies to reduce water consumption and withdrawals at these locations.
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2024
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Review
Main Raw Materials Used by Weight
(Thousands of tons)
2022
2023
20241
PTA
2,929
1,303
1,113
Paraxylene
1,690
1,391
1,464
MEG
1,009
993
997
Propylene
454
397
416
Styrene
405
329
350
Acetic Acid
82
83
97
Main Raw Materials
6,569
4,496
4,437
1. In 2024, 0.03% of the raw materials came from 100% renewable resources.
Green Products Input and Capacities
(Thousands of tons)
2022
2023
2024
Input (bottles)
121.7
145.3
150.5
Capacity- Bottle to Flake
268
268
268
Capacity- Flake to Pellet
137
169
169
Capacity- Pellet to Single Pellet
70
93
78
Capacity- rPET sheet
33
33
33
Low-Carbon & Avoided Emissions Products
%
20221
20232
20242
% of total revenue
52%
61%
60%
1. Includes only rPET, PET and EPS for construction.
2. Includes rPET, PET, PET Sheet and EPS for construction.
GRI: 301-1 | CSA S&P: 2.7.4
GRI: 301-2 I CSA S&P: 2.7.3
MATERIALS
GREEN PRODUCTS
CSA S&P: 2.5.13
LOW CARBON & AVOIDED EMISSIONS
Alpek classifies the following products as low-carbon options: rPET, PET, and PET Sheet. These products exhibit minimal
embedded emissions and contribute to the transition toward a low-carbon economy. Additionally, Alpek designates EPS for
construction as an emissions-avoidance product. By leveraging its insulation properties, this product enables clients to reduce
their environmental impact by minimizing greenhouse gas emissions associated with heating and cooling energy consumption
in buildings and houses.
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2024
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2024
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Review
Life Cycle Assessment Approach
(% of Total Main Family Products1)
2022
2023
2024
Full LCAs
9%
12%
12%
Simplified LCAs
6%
3%
6%
Other externally recognized tools (e.g. material flow accounting,
ecological footprint, MIPS)
0%
0%
0%
In 2024, Alpek enhanced its company-wide hazardous substances assessment, leveraging the ICCA Guidance on Chemical Risk
Assessment as a reference. The assessment encompassed products accounting for 99.9% of the Company's total revenue.
• The assessment revealed that 12 products contain restricted substances in the Annex XVII REACH Regulation, representing
0.6% of Alpek’s revenue.
• The assessment revealed that 5 products contain substances on the Candidate List of substances of very high concern
(SBHC) for authorization above 0.1% by weight, representing 0.1% of Alpek’s revenue.
To address this issue, Alpek is actively pursuing two innovative solutions aimed at eliminating hazardous substances from its
products:
• Biosolvents
• Biosurfactants
GRI: 416-1 I CSA S&P: 2.7.2
CSA S&P: 2.7.5 & 2.7.6
LCAs
EXPOSURE TO HAZARDOUS SUBSTANCES
1. Alpek has 33 main families’ products across its business units
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2024
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A clear example of the application of this Product Design Criteria is the development of a Bio-fertilizer.
Design Criteria
Bio-fertilizer Development
Sustainable Raw Materials
Incorporates an active ingredient that captures CO2 during its growth process and remains
GHG-neutral after application, unlike synthetic fertilizers.
Resource-efficient Product
Achieves low GHG emissions, utilizes less equipment and human resources than a syn-
thetic process and recirculates water.
Transportation, Distribution
and Storage
Supplies nitrogen using 14% less material than Urea, reducing storage demands for
customers. Comparing it to synthetic fertilizers, it requires lower capital expenditure to
construct new production plants, enabling installation in high-demand areas closer
to crops. This proximity eases distribution and minimizes emissions.
Fostering Circular Economy
Delivers a product that is 100% biodegradable.
Alpek’s R&D teams are dedicated not only to improving existing products but also to innovating new ones that align with
sustainable practices. The company’s unwavering dedication to sustainability drives all R&D efforts, positioning Alpek at the
forefront of environmentally responsible innovation.
When creating a new product, several key criteria are meticulously considered:
1.
Incorporation of Low Environmental Footprint Raw Materials: Alpek prioritizes biodegradable and circular solutions
as raw materials, aiming to minimize environmental impact.
2.
Resource Efficiency Across the Lifecycle: From production to end use, Alpek ensures that its products are resource-
efficient. This includes minimizing water and energy consumption as well as emissions.
3.
Optimized Value Chain Impact: Alpek designs products with transportation, distribution, and storage efficiency
in mind, reducing environmental impacts throughout the value chain.
4.
Circular Economy Focus: Alpek emphasizes effective end-of-life management for its products, contributing to a
circular economy.
GRI: 2-25 | CSA S&P: 2.7.1
PRODUCT DESIGN CRITERIA
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2024
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Board of Directors Composition
(Number of Board Members)
2022
2023
2024
Female
2
3
3
Male
9
11
11
Total
11
14
14
Board of Directors Attendance
(% of Attendance)
2022
2023
2024
Board Meetings
98%
98%
96%
Audit and Corporate Practices Committee
92%
92%
100%
Board of Directors Independence Composition
(Number of Board Members)
2022
2023
2024
Independent
5
8
8
Independent Proprietary
2
1
1
Related Proprietary
2
2
3
Patrimonial
2
3
2
Total
11
14
14
Audit and Corporate Practices Committee
3
3
3
GOVERNANCE
GRI: 2-9, 405-1 | CSA S&P: 1.2.1, 1.2.5
CSA S&P: 1.2.6
BOARD OF DIRECTORS COMPOSITION & INDEPENDENCE
BOARD OF DIRECTORS ATTENDANCE
Board of Directors Tenure
(Board Members Distribution)
2022
2023
2024
10+
8
8
8
8-10
0
0
0
6-7
0
0
2
3-5
2
2
1
0-2
1
4
3
CSA S&P: 1.2.7
BOARD OF DIRECTORS TENURE
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2024
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Non-Executive Board Member Remuneration Total
($ Million MXN)
2022
2023
2024
Non-Executive Board Members
424
410
410
Non-Executive Remuneration / Committee Meeting
($ Thousand MXN)
2022
2023
2024
Board Meetings
70
Mexican Residence or Nationality
115
115
Foreign Residence or Nationality ($ thousand USD)
15
15
Audit and Corporate Practices Committee
50
75
75
Name
Gender
Age
(Years)
Tenure
(Years)
Type
(Independent,
Related, Patrimonial)
Attendance
Board
Meetings
Attendance
CPC1
Alejandro Mariano Werner
M
58
2
Independent
100%
-
Álvaro Fernández Garza
(Chairman of the Board)
M
56
14
Related Propietary
100%
-
Ana Laura Magaloni Kerpel
F
61
3
Independent
100%
-
Andrés E. Garza Herrera
(Member of Audit and CPC)
M
57
13
Independent
100%
100%
Armando Garza Sada
M
67
14
Related
Propietary
100%
-
Cecilia Montserrat Ramiro Ximénez
F
52
2
Independent
100%
-
Enrique Zambrano Benítez
(Chairman of Audit and CPC)
M
69
13
Independent
100%
100%
Francisco José Calderón Rojas
(Member of Audit and CPC)
M
58
13
Independent
Propietary
100%
100%
Jaime Zabludovsky Kuper
M
68
6
Independent
100%
-
José Antonio Rivero Larrea
M
72
7
Independent
80%
-
José de Jesús Valdez Simancas
M
72
2
Related Propietary
100%
-
Merici Garza Sada
F
66
13
Patrimonial
60%
-
Pierre Francis Haas García
M
73
13
Independent
100%
-
Rodrigo Fernández Martínez
M
49
13
Patrimonial
100%
-
1. CPC: Corporate Practices Committee
To ensure the effectiveness of Alpek’s board of directors, internal guidelines dictate a minimum of 75% attendance for all
board members during the year and the board itself is considered a one-tier system.
GRI: 2-9, 2-11 I CSA S&P: 1.2.2, 1.2.3, 1.2.6, 1.2.7
GRI: 2-19
NON-EXECUTIVE BOARD MEMBER REMUNERATION
BOARD OF DIRECTORS BREAKDOWN
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2024
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Alpek’s Board of Directors oversees the company’s management and overall strategy. In fulfilling this responsibility, the Board
adopts an enterprise-level approach to understand major risks facing the company and identify strategic opportunities.
The Board and its Chairman oversee all relevant ESG-related progress, with the CEO leading the company’s ESG strategy. Alpek’s
CFO, who also serves as the appointed Sustainability Officer, is responsible for the effective management and execution of the
strategy across all business units.
To support this effort, the company has established an ESG Taskforce, managed by the Sustainability Officer, Sustainability
Director, Senior Vice President of Human Capital, and the Presidents of all business units. The objective of this group is to
determine and oversee ESG initiatives and metrics, identify and mitigate ESG risks, and align opportunities for the company’s
growth.
During Alpek’s Board of Directors meetings, the management team presents progress on all strategic initiatives and objectives,
including those impacting ESG priority issues. Examples include: Alpek’s rPET capacity growth, efforts to foster a circular
economy in collaboration with partners, tracking decarbonization goals, and innovation projects aimed at making processes
and products across all business units more sustainable.
Alpek’s Code of Ethics for the Board is periodically reviewed and revised, following the guidelines of the Mexican Stock
Exchange’s recommended code of professional ethics for all public companies participating in the stock market. This Code of
Ethics adheres to strict global ethical principles and guides the actions of both the company and its individual board members.
As the code of ethics is reliant on the country's market guideline, where the native language is Spanish, you will be able to find
a copy of the Spanish version of the document in the following link.
GRI: 2-12, 2-13, 2-14, 2-16
GRI: 2-23
BOARD CODE OF ETHICS
BOARD OVERSIGHT
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2024
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Position of individuals on the board with responsibility for climate-related issues
Board Chair
Alpek’s Chairman is independent of the management and has the highest authority on the board
of directors to provide the vision, direction, and strategies for the company. Alpek’s Chairman
ensures that the business has a clear knowledge of its exposure to climate-related risks.
Board-Level Committee
Alpek’s Audit & Corporate Practices Committee, appointed by the Board of Directors, consists
of three independent members of the board and has the direct responsibility of supervising
the effective strategies to address Climate Change issues and risks (including circular economy,
energy eco-efficiency, and CO2 emissions). The Committee is also in charge of financial and
administrative issues and is evaluating the supervision of all other ESG-related matters.
Chief Executive Officer
(CEO)
Alpek’s CEO leads business continuity, opportunities, and impacts, and is actively involved in
managing climate-related risks and opportunities. Alpek’s CEO has has highlighted sustainability
as a key growth pillar for the company. He has been a critical leader in enforcing ESG KPI goals
throughout the organization and advocating for greater transparency and visibility. With a special
focus on climate-related risks and opportunities, Alpek continues to pursue a sustainable future,
with its CEO and top management leading efforts towards more sustainable operations.
Chief Financial Officer
(CFO)
Alpek has appointed its CFO as the Sustainability Officer to implement and coordinate the
company’s ESG strategy. Additionally, the company has consolidated an ESG Taskforce, comprising
top executives from each business unit. Together with the Sustainability Officer, the ESG Taskforce
is responsible for establishing and overseeing environmental initiatives and metrics, identifying
financial and other risks and opportunities, developing and implementing strategies, and
gathering and analyzing information for reporting to Alpek’s Board of Directors.
The Innovation and Sustainability Departments, which report to the CFO, are continuously
working on improving and developing products and solutions to enhance Alpek’s sustainable
portfolio and operations..
As part of its annual company-wide target-setting activity, Alpek follows a top-down objective process where various KPIs are
established for all business units and Executive Management. These KPIs are directly linked to potential monetary remuner-
ation at the end of the year. The KPIs differ across businesses, covering priorities such as financial, operational, sales, safety,
environmental, budget, and strategic projects.
Below is a table showcasing the types of KPIs related to Environmental, Social, or Governance that have been authorized for
each individual’s objectives and are in effect for 2024. All C-Suite objectives are reviewed and approved by Alpek’s CEO, while
the CEO’s objectives are reviewed by the Company’s Board of Directors.
Division
Role
ESG KPIs1
Environmental
Social
Governance
C- Suite
Alpek CEO
Alpek CFO
Sr. VP Human Capital
President of Polyester Business
President of Polypropylene Business
President of Expandable Styrenics Business
President of Specialty Chemicals Business
President of Natural Gas Business
1. Green cell denotes the person has at least one KPI related to sustainability which is tied to their end-of-year remuneration. These KPIs, among others,
are then cascaded to all individual business units and senior teams.
GRI: 2-24 I CSA S&P: 2.5.6
GRI: 2-13, 2-17 | CSA S&P: 2.5.4, 2.5.5 I CDP: C1.1a
BOARD MEMBERS WITH CLIMATE OVERSIGHT/RESPONSIBILITY
CLIMATE-RELATED MANAGEMENT INCENTIVES
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2024
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Financial
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Alfa and Alpek Policy Highlight
• The company listens to complaints from all stakeholders.
• Alfa and Alpek are committed to processing them with transparency, fairness, keeping information confidential and
protecting the whistleblower.
• Alpek uses Alfa’s integrity and transparency hotline as a third party.
• Complaints can be submitted by email, website, WhatsApp, and phone helplines.
• There is a minimum of information required for the complaint to be processed:
▸
Name or anonymous
▸
Person and company that is being reported
▸
Date of the complaint
▸
Details of the complaint
• The companies will protect the identities of the participants and will hold and manage them confidentially.
All business units are supported by the Alfa Integrity and Transparency Helpline
• Alfa’s Internal Audit department manages the Integrity and Transparency Helpline, as they have the proper operational
processes and infrastructure required for its functioning.
• All complaints are monitored until their conclusion.
• It offers free and accessible multilingual communication channels to file complaints.
▸
1-800 Phone available in 31 countries
▸
Emails received in any language
▸
Site: http://www.alfa.com.mx/transparency.html & http://www.alpek.com/transparency-mailbox.html
▸
WhatsApp in various countries
• Integrity and Transparency Helpline communication and presence:
▸
Internet: Websites of Alfa & subsidiaries
▸
Pocket Calendars and Posters
▸
Business documents: orders, requests, invoices, etc.
▸
Annual company campaigns: Screensavers, mailing, videos, posters.
Country
Phone
Argentina
0800-444-5685
Brazil
0800-892-2016
Chile
800-914-378
Canada
1-866-238-2860
Mexico LD
52-818-748-2991
Mexico
01-800-265-2532
USA
1-866-482-1957
Alpek’s Code of Conduct is the main document that dictates the guidelines for all the company’s and employees’ behavior. This
document is closely tied to policies on Human Rights and the Code of Ethics, to ensure proper attention to employee wellbeing.
Please refer to the “Human Rights and Code of Ethics” section for further details that support the Code of Business Conduct.
As part of the process of engaging in the most transparent and effective ways with Alpek’s stakeholders, the company follows
a specific process.
GRI: 2-23 I CSA S&P: 1.5.2
GRI: 2-26, 406-1 | CSA S&P: 1.5.4, 1.5.5
CODE OF BUSINESS CONDUCT
INTEGRITY AND TRANSPARENCY HELPLINE
(HUMAN RIGHTS & CODE OF CONDUCT)
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2024
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Financial
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Alpek does not have any specific stock ownership requirements, and none of its officers, nor its CEO, own more than 1% of
Alpek’s common shares.
DUAL-CLASS SHARES
There are no dual-class shares in the company.
STOCK SERIES AND RIGHTS
Alpek only have 1 series “A”, all the shares have the same rights.
There is no government ownership in Alpek. If any individual government officials hold shares, their ownership does not exceed
5%. Additionally, there are no golden shares in the company.
Alpek Shareholders meeting is held on April 1, 2025, the only Shareholder holding more than 5% of the shares representing the
capital stock of Alpek is Controladora Alpek S.A.B. de C.V, with 82.09% of the total number of shares. To the best knowledge of
Alpek, after due inquiry, no other Shareholder represents 5% or more of the total number of shares issued and outstanding,
as of April 1, 2025.
Short-term compensation for Alpek’s CEO is measured through a formula that uses three multiplied factors to calculate the
result at the end of the year. These factors are the following:
1) The number of months’ salary - fixed
2) The company bonus factor (CBF)
3) The performance matrix considers the results of the strategic objectives set forth at the beginning of the year
CBF is calculated using EBITDA, the budget EBITDA is considered the target and if the company reaches the factor to use its 80%,
the target includes a range +/- X%, the X% is calculated depending on the historical results of the company.
The performance matrix considers Environmental, Social, and Governance objectives set at the beginning of the year and
cascaded down to the rest of the executive level. Please reference above, in the climate-related management incentives section,
for a clearer understanding of the ESG objectives for the CEO and each C-suite member.
Salaries and benefits for all senior officers at Alpek include base salary, benefits, and variable compensation programs. Alpek
has a stock plan for the CEO and top Executive Officers, under which awards are granted and payable over five years. The cash
amounts payable during this period are based on quantitative and qualitative metrics such as financial results, the stock value
of Alpek and Alfa, and executive tenure in the company, among others. The Board of Directors of Alfa has appointed a technical
committee to manage the plan, which reviews the estimated cash settlement of this compensation at the end of each year.
CSA S&P: 1.2.9
CSA S&P: 1.2.11, 1.2.12
CSA S&P: 1.2.13
CSA S&P: 1.2.14
CSA S&P: 1.2.10
CEO COMPENSATION – SUCCESS METRICS
MANAGEMENT OWNERSHIP
GOVERNMENT OWNERSHIP
FAMILY OWNERSHIP
CEO LONG-TERM PERFORMANCE ALIGNMENT
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is important when the amount of the credit is greater than fifteen percent of the assets of the company itself or of its
counterpart.
VI.
Being an employee of a foundation, university, civil association, or civil society that receives important donations from
society5.
VII. Being a General Director or high-level official of a company in whose board of directors the General Director or a high-level
official of the company in question participates;
VIII. Those who are relative6 or related by consanguinity, affinity, or civil up to the fourth degree, as well as the spouses, the
common-law wife, and the common-law partner, of any of the natural persons referred to in sections I to IV of this article.
It should be noted that in the preceding paragraphs when speaking of a company, the legal entity or persons that make up the
business group to which the company belongs must be included.
A shareholder who does not exercise significant influence, or command power, or is linked to the management team of the
company, may be considered as an independent director.
1. Significant influence is considered to be the ownership of rights that allow, directly and indirectly, to exercise the vote of at least 20% of the capital stock.
2. It is the ability to decisively influence the agreements adopted in assembly or councils or in management.
3. If they represent significant income if it represents more than 10% of the advisor's income.
4. A customer or supplier is considered important when sales to or from the company represent more than 10% of the customer's or supplier's total sales,
respectively. Likewise, it is considered that a debtor or creditor is important when the amount of the credit is greater than 15% of the assets of the com-
pany or its counterpart.
5. Important donations are considered to be those that represent more than 15% of the total donations received by the institution.
6. This assumption applies to the spouse and up to the fourth degree in the cases of consanguinity and affinity, for the cases of items i and ii; and to the
spouse and up to the first degree in cases of consanguinity and affinity, for the cases set forth in subsections iii to vi.
Alpek’s Board oversees its responsible corporate citizenship, ensuring that its business conduct is ethical and properly governed.
The company is comprised of a 1 tier system consisting of executive, non-executive and independent directors.
Board Members type | Independent "Board Independence Statement”
Alpek defines independent directors in accordance with the Mexican Security Law (article 29) and the code of corporate best
practices published by the Mexican Securities Commission and the Mexican CEE (Advisory Corporate Council).
By legal provision, the Independent Council cannot be composed by the following persons:
I.
The relevant managers or employees of the company or of the legal entities that make up the business group or consortium
to which it belongs, as well as the commissioners of the latter.
II.
Have been an employee or manager of the company during the last twelve months prior to the date of his appointment.
III.
Without being an employee or manager of the company, have significant influence1 or power of command2 over the
managers of the same.
IV.
Being an advisor to the company or partner or employee of firms that act as advisers or consultants to the company or its
affiliates and whose income depends significantly3 on this contractual relationship.
V.
Clients, service providers, suppliers, debtors, creditors, partners, directors or employees of a company that is a client,
service provider, supplier, debtor or major creditor4. It is considered that a client, service provider or supplier is important,
when the company's sales represent more than ten percent of the total sales of the client, the service provider or the
supplier, during the twelve months prior to the date of the appointment. Likewise, it is considered that a debtor or creditor
GRI: 2-9, 2-10 | CSA S&P: 1.2.1, 1.2.2, 1.2.3
BOARD STRUCTURE
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2024
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Capital
Financial
Review
Regarding diversity on the Board, in early 2023, Alpek welcomed Montserrat Ramiro as a new independent member, following
the previous year’s addition of Dr. Ana Laura Magaloni. This addition helps prioritize and focus Alpek’s business strategy with a
sustainability outlook. Dr. Magaloni, a renowned lawyer with extensive knowledge of Human Rights and Diversity, Equity, and
Inclusion (DEI), and Ms. Ramiro, an expert in energy and renewable sources with over 25 years of experience, bring valuable
expertise to the Board. This action aligns with Alpek’s commitment to diversifying the Board’s scope and expertise and improving
its composition and effectiveness. Currently, Alpek’s Board of Directors is comprised of 21% female members.
In Alpek, Board members undergo an annual election and re-election process.
In the company’s By-laws document, page 11, Alpek declares that: “Independent board members and, where applicable, their
alternates, will be selected based on their experience, ability, and professional reputation, further considering that due to their
characteristics, they can perform their duties free of conflicts of interest and without being subject to personal, financial, or
economic interests. Independent board members who cease to be independent during their term, must make the Board of
Directors aware of this fact no later than during the next meeting of the Board.”
CSA S&P: 1.2.5
CSA S&P: 1.6.1, 1.6.2, 1.6.3
CSA S&P: 1.2.6
BOARD DIVERSITY
BOARD ELECTION PROCESS
ORGANIZATION CONTRIBUTIONS
BOARD EFFECTIVENESS
Board Election Process Results
(% of Votes)
2022
2023
In favour
97.6%
96.2%
Abstention
0.8%
0.6%
Against
2.6%
3.3%
Alpek’s Contributions and Other Spendings
($M USD)
2022
2023
2024
Interest representation / Stakeholder Engagement
0
0
0
Local, regional, or national political campaigns/
organizations /candidates
0
0
0
Trade associations or tax-exempt groups
1.92
1.47
2.10
Other
0
0
0
Total contributions ($USD)
1.92
1.47
2.10
Data Coverage (% of sites)
100%
100%
100%
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2024
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Social
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Capital
Financial
Review
Alpek does not make contributions from corporate funds to political campaigns, super political action committees, or political
parties. The company ensures full transparency by publishing the aggregate dues paid to trade associations that engage in
lobbying activities and lists trade associations to which it makes yearly payments of $5,000 or more.
The Government Affairs (GA) team regularly assesses and evaluates Alpek’s relationships with all current trade associations to
ensure alignment with the company’s strategies and positions. The GA team actively participates in and communicates with
trade associations to help shape their agendas and priorities (e.g., serving on trade associations’ boards and committees) and
to maintain real-time knowledge of their advocacy positions and policies.
Alpek does not participate in any political action or spending in the United States and focuses solely on engaging with governments
for educational purposes.
Support Sustainable Development of Chemical Industries
Alpek supports several institutions that promote sustainable economic and environmental development in the packaging and
chemical industry across the countries where it currently operates. These contributions assist associations such as National
Association for PET Container Resources, British Plastics Federation, Asociación Nacional de Ingeniería Química (ANIQ), among
others. In 2024, Alpek has contributed nearly $950,000 USD.
Recycling and Circular Economy
Alpek strengthens its commitment to circularity by actively supporting various institutions, including the Recycling Partnership,
Ecología y Compromiso Empresarial A. C. (ECOCE), Comisión de la Industria del Plástico, Responsabilidad y Desarrollo Sustentable
in Mexico, and others. These institutions promote synergy among their members to enhance recycling systems, showcase
emerging technologies for recycling, and foster the adoption of best recycling practices. In 2024, Alpek made a financial
contribution of approximately $660,000 USD to organizations that support this matter.
GRI: 415-1 | CSA S&P: 1.6.1
CSA S&P: 1.6.2
POLITICAL INVOLVEMENT
MOST RELEVANT CONTRIBUTIONS
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2024
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Financial
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This report covers the operation performance of all companies under Alpek SAB, where Alpek holds ownership of 50 percent or more of the total shares
Social Indicators
(% of Sites)
2022
2023
2024
Workforce
100%
100%
100%
Diversity, Equity, & Inclusion
NA
100%
100%
Human Capital Management
Training & Development
NA
88%
97%
Human Capital Return on Investment
NA
100%
100%
Talent Attraction & Retention
Employee Hiring
NA
97%
94%
Maternity & Paternity Leave Cases
NA
73%
97%
Employee Turnover Rate
NA
94%
97%
Employee Engagement Rate
NA
86%
86%
Freedom of Association
NA
100%
100%
Community Engagement
NA
91%
100%
Safety
100%
100%
100%
Human Rights & Code of Ethics
NA
100%
100%
Customer Satisfaction
NA
NA
91%
Environmental Indicators
(% of Sites)
2022
2023
2024
Biodiversity
NA
100%
100%
Emissions
Reported Emissions (Scope 1 & Scope 2)
100%
100%
100%
Emissions Intensity
100%
100%
100%
Scope 3 emissions
100%
100%
100%
Other GHG Emissions except. COD
100%
100%
100%
Chemical Oxygen Demand
100%
83%
100%
Waste Management
Non-hazardous Waste
100%
100%
100%
Hazardous Waste
100%
100%
100%
Energy
Energy Consumption
100%
100%
100%
Energy Intensity
100%
100%
100%
Water Management
100%
100%
100%
Materials
100%
100%
100%
Production
100%
100%
100%
COVERAGE
CSA S&P: 1.1.1
COVERAGE OF SOCIAL INDICATORS
COVERAGE OF ENVIRONMENTAL INDICATORS
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Product
Location
Certification
PTA
Altamira, TS, Mexico
ISO 9001, ISO 14001, Clean Industry
Columbia, SC, USA
SMETA, ISO 14001
Ipojuca, PE, Brazil
ISO 9001, ISO 14001, Responsible Care, Eco Vadis
Cosoleacaque, Ver, Mexico
ISO 9001, ISO 14001, Industria Limpia
PET Resin1
Columbia, SC, USA
ISO 9001, ISO 14001 BRCGS 6, SMETA
Ipojuca, PE, Brazil
ISO 9001, ISO 14001, Responsible Care, FSSC 22000, Eco Vadis
Bay St. Louis, MS, USA
ISO 9001, ISO 14001, BRCGS 6, SMETA
Wilton, UK
ISO 9001, ISO 14001, EcoVadis, FSSC 22000
Zárate, BA, Argentina
ISO 9001, SMETA, FSSC 22000
Cosoleacaque, Ver, Mexico
ISO 9001, BRCGS 6, TCCC SGP
Fayetteville, NC, USA
ISO 9001, BRCGS 6, ISO 14001
Montréal, Québec, Canada
FSSC 22000, SMETA
Salalah, Oman
ISO 9001, ISO 14001, ISO 45001, ISO 17025
PET Sheet
Salalah, Oman
ISO 9001, ISO 14001, ISO 45001, ISO 17025, BRCGS 6, Halal, Kosher
Cincinnati, OH, United States
-
PET Packaging
Riyadh, Saudi Arabia
ISO 9001, BRCGS 6
rPET
Pacheco, BA, Argentina
SMETA
Fayetteville, NC, USA
SMETA, UL 2809
Richmond, IN, USA
SMETA, UL2809, ISO 14001
Reading, PA, USA
UL 2809
Product
Location
Certification
PP
Altamira, TS, Mexico
ISO 9001, ISO 14001, Clean Industry, Responsible Care, ESR,
GEI, EcoVadis Bronze
EPS
Altamira, TS, Mexico
ISO 9001, UL GreenGuard Cert., FM approved, ICC ES.
Responsabilidad Integral, Gestión de crisis ALFA, International
Sustainability & Carbon Certification (ISCC Plus), ISO 14001,
SCS (Recycled Content Standard)
Monaca, Pennsylvania, USA
ISO 9001, ISO 14001, Factory Mutual (FM) Approvals; UL/ICC-ES,
International Sustainability & Carbon Certification (ISCC Plus)
Guarantinguetá, SP, Brazil
ISO 9001
Painesville, OH, USA
ISO 9001, ISO 14001, Factory Mutual (FM) Approvals; UL/ICC-ES
Concón, Valpo, Chile
ISO 9001, HACCP
Gral. Lagos, SF, Argentina
ISO 9001
ARCEL®
Monaca, Pennsylvania, USA
ISO 9001, ISO 14001
Molded EPS
Santiago, RM, Chile
ISO 9001, PEC, SEDEX
Puerto Montt, Lagos, Chile
ISO 9001, BRCGS 6
Punta Arenas, Patagonia, Chile
-
Other Chemicals
Lerma, MC, Mexico
ISO 9001, Sistemas de Gestión de Calidad Sistema de
Administración de Responsabilidad Integral OEA, C-TPAT
1. Includes SPT production (Single Pellet Technology) in Charleston, SC; Cosoleacaque, VZ & Bay St. Louis, MS
CSA S&P: 2.1.3
CERTIFICATIONS
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Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 2: GENERAL DISCLOSURES 2021
2-1
Organizational details
ALPEK S.A.B de C.V.
Page 7.
2-2
Entities included in the organization’s sustainability reporting
All financial-controlled entities.
Pages 3 and 75.
2-3
Reporting period, frequency and contact point
The period covered is Jan 1st to Dec 31st 2024. Alpek publishes its report
annually. Contact: mcoindreau@alpek.com
Page 75.
2-4
Restatements of information
Any restatement of information is indicated throughout the report.
Page 75.
2-5
External assurance
Some key sustainability data is in the process of being assured by an
external party, the letter of assurance will be reported once available.
2-6
Activities, value chain and other business relationships
Pages 7, 14 and 50.
2-7
Employees
Pages 80, 82 and 83.
Diversity, Equity and Inclusion
2-8
Workers who are not employees
Not applicable. Alpek does not have workers who are not employed
formally by the Company.
GRI Index
STATEMENT OF USE
Alpek, S.A.B. de C.V. has reported the information cited in this GRI content index for the period from January 1st to December 31, 2024 with reference to the GRI Standards.
GRI 1 USED
GRI 1: Foundation 2021
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Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
2-9
Governance structure and composition
Pages 21, 23, 110, 111 and 116.
Sustainable Corporate Governance
2-10
Nomination and selection of the highest governance body
The Board of Directors of Alpek is currently composed of 14 members, all
of them appointed as full-fledged directors, with no alternate directors
in place. The current directors were elected for the year 2024 at the
Annual General Shareholders' Meeting that took place on March 7th of
that same year. The members of the Board of Directors are chosen based
on their professionalism, business trajectory, leadership, experience
and alignment with Alpek’s values. No distinction is made for diversity
factors such as gender, race, nationality and / or personal beliefs.
Pages 21 and 116.
Sustainable Corporate Governance
2-11
Chair of the highest governance body
Pages 21, 23 and 111.
2-12
Role of the highest governance body in overseeing the management
of impacts
Pages 21, 22 and 112.
Sustainable Corporate Governance
ESG Risk and Impact Management
Goal 17: Partnerships for the goals
2-13
Delegation of responsibility for managing impacts
Pages 21, 22, 112 and 113.
Sustainable Corporate Governance
ESG Risk and Impact Management
Goal 17: Partnerships for the goals
2-14
Role of the highest governance body in sustainability reporting
Page 112.
Sustainable Corporate Governance
ESG Risk and Impact Management
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Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
2-15
Conflicts of interest
Alpek has a Conflict of Interest policy for the members of the Board of
Directors and for its employees. This establishes that the responsibilities
and duties of the members of the Board are governed by the Mexican
Securities Market Law (LMV), applicable in Mexico to securities issuers,
considering the Code of Professional Ethics of the Mexican Stock Market
Community, the Code of Best Corporate Practices, and the internal
regulations of the Mexican Stock Exchange. In accordance with the LMV,
the members of the Board have a duty of diligence, so they must always
act in good faith in the best interest of the company. They must keep
confidentiality with respect to information and / or public matters of the
company, as well as refrain from participating and being present in the
deliberation and voting on matters that represent a conflict of interest.
By policy, those members of the Board who may have a conflict of interest
in the decision on any matter, must inform the Chairman and the other
members, as well as refrain from participating in the discussion and
exercising their vote at the meetings. In the case of employees, Alpek's
policy states that they should avoid any situation in which their interests
differ from those of the company. All employees who may have interests
or relationships with current or potential suppliers or customers should
inform their immediate supervisor.
Page 22.
Sustainable Corporate Governance
2-16
Communication of critical concerns
Page 112.
Sustainable Corporate Governance
2-17
Collective knowledge of the highest governance body
Each year, the learning dynamic within Alpek is strengthened in all
areas of the company, including Alpek’s management team. Alpek aims
to continue with this practice, improving in every ESG area.
Pages 23 and 113.
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Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
2-18
Evaluation of the performance of the highest governance body
There are several evaluation methods for directors that measure various
factors: attendance to meetings of the Board and the committees to
which they belong, up to their participation in the deliberations and the
effectiveness of the strategic decisions taken.
Sustainable Corporate Governance
2-19
Remunearation Policies
Page 111.
2-20
Process to determine remuneration
This information is confidential for safety reasons.
2-21
Annual total compensation ratio
This information is confidential for safety reasons.
2-22
Statement on sustainable development strategy
Page 3 and 29.
ESG Risk and Impact Management
2-23
Policy commitments
Pages 32, 35, 36, 37, 45, 46, 112 and 114.
ESG Risk and Impact Management
2-24
Embedding policy commitments
Pages 32, 35, 45, 46 and 113.
Supplementary Sustainability Performance Report.
ESG Risk and Impact Management
2-25
Processes to remediate negative impacts
Pages 45, 46, 59 and 109.
ESG Risk and Impact Management
2-26
Mechanisms for seeking advice and raising concerns
Pages 46, 96 and 114.
ESG Risk and Impact Management
2-27
Compliance with laws and regulations
Alpek complies strictly with all laws and regulations that pertain
to its industry.
Pages 17, 96 and 97.
Compliance and Transparency
2-28
Membership in associations
Pages 19 and 90.
Compliance and Transparency
2-29
Approach to stakeholder engagement
Pages 19 and 33.
ESG Risk and Impact Management
2-30
Collective bargaining agreements
Page 89.
Human Rights
124
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 3 Material Topics 2021
3-1
Process to determine material topics
Page 33.
Sustainable Corporate Governance
ESG Risk and Impact Management
3-2
List of material topics
Pages 34 and 76.
ESG Risk and Impact Management
3-3
Management of material topics
Pages 76 and 78.
ESG Risk and Impact Management
GRI 200: ECONOMIC STANDARDS
GRI 201: Economic Performance 2016
201-1
Direct economic value generated and distributed
Pages 12, 29 and 48.
Goal 2: Zero Hunger
Goal 5: Gender equality
Goal 7: Affordable and clean energy
Goal 8: Decent work and economic growth
Goal 9: Industry, innovation and
infrastructure
201-2
Financial implications and other risks & opportunities due to climate
change
Pages 28, 29, 30 and 77.
Supplementary Sustainability Performance Report.
Climate Change Strategy
Goal 13: Climate action
201-3
Defined benefit plan obligations and other retirement plans
The pension plans, support for education and medical assistance are available
to 100% of Alpek’s employees. The pension system is a fixed contribution plan
to which the company and employees contribute the same amount, which
ranges from 4 to 17% of the employee's total salary and varies according
to applicable labor regulations. The resources to cover these benefits are
covered 100% by the company. Indelpro: Started in 2007 a fund called "grow"
by 4%. Alpek Polyester: Started in 2007 a program through "Skandia" where
the company considers a 4% of the base salary. Polioles: Started in 2007 a
fund with "Skandia" and is a contribution between 4% to 13.44%.
Occupational Safety
Goal 8: Decent work and economic growth
125
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
201-4
Financial assistance received from government
Alpek does not receive any financial aid from governments.
GRI 202: Market Presence 2016
202-1
Ratios of standard entry level wage by gender compared to local
minimum wage
Country Minimum wage ratio - Alpek vs. legal minimum wage: Mexico
1.17 to 1, United States 2.11 to 1.
Diversity, Equity and Inclusion
Goal 5: Gender equality
202-2
Proportion of senior management hired from the local community
Approximately 90% of managers come from the same community where
the operation is located.
Social Impact
Goal 8: Decent work and economic growth
GRI 204: Procurement Process 2016
204-1
Proportion of spending on local suppliers
Approximately 33% of Alpek’s volume comes from local supply.
Value Chain Management
Goal 12: Responsible consumption and
production
GRI 205: Anti-Corruption 2016
205-1
Operations assessed for risks related to corruption
All of Alpek’s plants.
ESG Risk and Impact Management
Goal 16: Peace, justice and strong institutions
205-3
Confirmed incidents of corruption and actions taken
Page 96.
ESG Risk and Impact Management
Goal 16: Peace, justice and strong institutions
GRI 206: Anti-Competitive Behavior 2016
206-1
Legal actions for anti-competitive behavior, anti-trust, and monopoly
practices
In 2024 there was no legal action against Alpek related to this aspect.
Goal 16: Peace, justice and strong institutions
126
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 300: ENVIRONMENTAL STANDARDS
GRI 301: Materials 2016
301-1
Materials used by weight or volume
Page 107.
Circularity and Product Responsibility
Goal 8: Decent work and economic growth
Goal 12: Responsible consumption and
production
301-2
Recycled input materials used
Pages 60 and 107.
Circularity and Product Responsibility
Innovation and Sustainable
Development
Goal 8: Decent work and economic growth
Goal 12: Responsible consumption and
production
301-3
Reclaimed products and their packaging materials
Page 56.
Please refer to External Productive Waste concept.
Circularity and Product Responsibility
Environmental Management
Goal 8: Decent work and economic growth
Goal 12: Responsible consumption and
production
GRI 302: Energy 2016
302-1
Energy consumption within the organization
Pages 55 and 104.
Climate Change Strategy
Goal 13: Climate Action
302-3
Energy intensity
Pages 55 and 104.
Climate Change Strategy
Goal 13: Climate action
302-4
Reduction of energy consumption
Page 55 and 104.
Climate Change Strategy
Goal 13: Climate action
GRI 303: Water and effluents 2018
303-1
Interactions with water as a shared resource
Alpek collaborates with authorities and complies with water-related
regulations in all operations.
Pages 58, 105 and 106.
Water Management
Environmental Management
Goal 6: Clean water and sanitation
127
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
303-2
Management of water discharge-related impacts
Pages 58 and 105.
Water Management
Goal 6: Clean water and sanitation
303-3
Water withdrawal
Page 58 and 105.
Water Management
Goal 6: Clean water and sanitation
303-4
Water discharge
Page 106.
Water Management
Goal 6: Clean water and sanitation
303-5
Water consumption
Page 105.
Water Management
Goal 6: Clean water and sanitation
GRI 101: Biodiversity 2021
101-1
Policies to halt and reverse
biodiversity loss
Certain Alpek operations are located close to areas of high biodiversity.
In the United States, Columbia plant is located 24 km from the Congaree
National Park, while the Zárate plant in Argentina, is less than 25 km from
the Paraná Delta Biosphere Reserve. Given that these are high-value
areas for water and biodiversity, these facilities implement activities that
contribute to water conservation and nearby habitats, such as funding
habitat recovery and giving talks on species conservation. Biodiversity
care is included in our Environmental Management Policy.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
101-2
Management of biodiversity impacts
Pages 57 and 98.
Supplementary Sustainabiblity Perfromance Report.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
101-4
Identification of biodiversity impacts
Pages 57 and 98.
Supplementary Sustainabiblity Perfromance Report.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
101-5
Locations with biodiversity impacts
Pages 57 and 98.
Supplementary Sustainabiblity Perfromance Report.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
128
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
101-6
Direct drivers of biodiversity loss
Pages 57 and 98.
Supplementary Sustainabiblity Perfromance Report.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
101-7
Changes to the state of biodiversity
Pages 57 and 98.
Supplementary Sustainabiblity Perfromance Report.
Environmental Management
Goal 6: Clean water and sanitation
Goal 14: Life below water
Goal 15: Life on land
GRI 305: Emissions 2016
305-1
Direct (Scope 1) GHG emissions
Pages 55 and 99.
Climate Change Strategy
Goal 13: Climate action
305-2
Energy indirect (Scope 2) GHG emissions
Pages 55 and 99.
Climate Change Strategy
Goal 13: Climate action
305-3
Other indirect (Scope 3) GHG emissions
Pages 99 and 100.
Climate Change Strategy
Goal 13: Climate action
305-4
GHG emissions intensity
Pages 55 and 99.
Climate Change Strategy
Goal 13: Climate action
305-5
Reduction of GHG emissions
Pages 53, 55 and 99.
Climate Change Strategy
Goal 13: Climate action
305-6
Emissions of ozone-depleting substances (ODS)
Alpek does not emit these substances.
Climate Change Strategy
Goal 13: Climate action
305-7
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air
emissions
Page 100.
Climate Change Strategy
Goal 13: Climate action
GRI 306 Waste 2020
306-1
Waste generation and significant waste-related impacts
Page 56.
Circularity and Product Responsibility
Goal 12: Responsible consumption and
production
129
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
306-2
Management of significant waste-related impacts
Pages 56 and 59.
Circularity and Product Responsibility
Goal 12: Responsible consumption and
production
306-3
Waste generated
Pages 56, 102 and 103.
306-4
Waste diverted from disposal
Page 102.
Circularity and Product Responsibility
Goal 12: Responsible consumption and
production
306-5
Waste directed to disposal
Page 102.
Circularity and Product Responsibility
Goal 12: Responsible consumption and
production
GRI 308: Supplier Environmental Assessment 2016
308-1
New suppliers that were screened using environmental criteria
Pages 50 and 51.
Value Chain Management
Goal 12: Responsible consumption and
production
Goal 13: Climate Action
GRI 400: SOCIAL STANDARDS
GRI 401: Employment 2016
401-1
New employee hires and employee turnover
Pages 86, 87 and 88.
Goal 5: Gender equality
Goal 8: Decent work and economic growth
401-2
Benefits provided to full-time employees that are not provided to
temporary or part-time employees
Non-management workers have bonuses, vacation bonuses, pantry
bonuses, savings funds, recognition for years of service, and pension
plan. Temporary and part-time employees do not have the pension plan.
Pages 40 and 41.
Goal 8: Decent work and economic growth
401-3
Parental leave
Page 87.
Goal 5: Gender equality
Goal 8: Decent work and economic growth
130
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 402: Labor / Management Relations 2016
402-1
Minimum notice periods regarding operational changes
The minimum term is two weeks.
Goal 8: Decent work and economic growth
GRI 403: Occupational Health and Safety 2018
403-1
Occupational health and safety management system
All Alpek’s plants have certifications in health and safety management
systems, according to the health and safety regulations of their countries.
Pages 44 and 92.
Occupational Safety
Goal 8: Decent work and economic growth
403-2
Hazard identification, risk assessment, and incident investigation
In accordance with the established management systems, the appropriate
risk identification procedure is carried out at each plant. For direct workers,
some of these actions are: start the day with the identification that the
safety equipment is complete and in optimal conditions; Walk through the
plant for risk identification; Documented procedures on how to act if one is
detected; Review Checklist (Pause, Think, Act). For indirect workers who are
at its facilities, the same applies, in addition to having evaluations that Alpek
performs on their employers so that they provide adequate safety measures.
Not all plants carry out this exercise with indirect workers. All workers must
report the incident or risk immediately to take corrective action.
Page 92.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-3
Occupational health services
Alpek is committed to safeguarding employee well-being and
workplace safety through comprehensive occupational health services.
These include regular medical check-ups, assistance programs, and
on-site medical specialists, with a strong focus on preventive care and
compliance with industry best practices. While internal records are
maintained, Alpek is actively working to standardize its data collection
processes to enhance consistency and comparability.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
131
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
403-4
Worker participation, consultation, and communication on occupational
health and safety
Workers have various means of communication to convey any concern or
need in occupational health and safety issues. No worker starts working
at the plant if he does not take an induction course for his job and the
risks that it may have.
Occupational Safety
Goal 8: Decent work and economic growth
403-5
Worker training on occupational health and safety
Page 44.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-6
Promotion of worker health
Alpek promotes employee health and well-being through a range of
initiatives, including wellness programs, health fairs, educational sessions,
and awareness campaigns, with a particular emphasis on women’s health.
These initiatives are continuously monitored to assess their impact;
however, detailed quantitative data is not included in this report.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-7
Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships
Page 92 and 94.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-8
Workers covered by an occupational health and safety management
system
100% of Alpek’s employees are covered by its plans established in the
health and safety systems.
Page 92.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-9
Work-related injuries
Page 44, 92, 93 and 94.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
403-10
Work-related ill health
Pages 93 and 94.
Occupational Safety
Goal 3: Good health and well-being
Goal 8: Decent work and economic growth
132
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 404: Training and Education 2016
404-1
Average hours of training per year per employee
Page 85.
Goal 4: Quality education
Goal 5: Gender equality
Goal 8: Decent work and economic growth
404-2
Programs for upgrading employee skills and transition assistance
programs
Page 40.
Goal 8: Decent work and economic growth
404-3
Percentage of employees receiving regular performance and career
development reviews
As highlighted in the “Alpek’s Team” section (page 40), the company
fosters professional growth through structured performance and
career development reviews as part of its talent management strategy.
While approximately 60% of employees receive some form of review
annually, variations in review types prevent precise reporting at this
time. Alpek remains committed to refining its tracking mechanisms to
provide more accurate data in the future.
Goal 5: Gender equality
GRI 405: Diversity and Equal Opportunities 2016
405-1
Diversity of governance bodies and employees
Pages 42, 80, 83, 84 and 110.
Diversity, Equity and Inclusion
Goal 5: Gender equality
405-2
Ratio of basic salary and remuneration of women to men
Pages 42 and 43.
Diversity, Equity and Inclusion
Goal 5: Gender equality
GRI 406: Non-Discrimination 2016
406-1
Incidents of discrimination and corrective actions taken
Pages 96 and 114.
Goal 5: Gender equality
Goal 16: Peace, justice and strong institutions
133
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 407: Freedom of Associations and Collective Bargaining 2016
407-1
Operations and suppliers in which the right to freedom of association
and collective bargaining may be at risk
Alpek has not identified any supplier or operation with this risk.
Value Chain Management
Goal 8: Decent work and economic growth
Goal 16: Peace, justice and strong institutions
GRI 408: Child Labor 2016
408-1
Operations and suppliers at significant risk for incidents of child labor.
Alpek has not identified any supplier or operation with this risk.
Value Chain Management
Goal 8: Decent work and economic growth
Goal 16: Peace, justice and strong institutions
GRI 409: Forced or Compulsory Labor
409-1
Operations and suppliers at significant risk for incidents of forced or
compulsory labor
Alpek has not identified any supplier or operation with this risk.
Value Chain Management
Goal 8: Decent work and economic growth
Goal 16: Peace, justice and strong institutions
GRI 410: Security Practices 2016
410-1
Security personnel trained in human rights policies or procedures
Alpek does not currently conduct trainings in human rights policies.
Human Rights
Goal 8: Decent work and economic growth
Goal 16: Peace, justice and strong institutions
GRI 411: Rights of Indigenous People 2016
411-1
Incidents of violations involving rights of indigenous people
In 2024, there were no incidents or violations related to indigenous
people.
Social Impact
134
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Standard #
Standard
Answer/Location
Material Aspect
SDG 2030
GRI 413: Local Communities 2016
413-1
Operations with local community engagement, impact assessments,
and development programs
A majority of Alpek’s operations have its own local community
engagement programs and processes. However, Alpek is currently
working on developing an engagement policy at the corporate level
so its entire operations have the necessary guidelines to build a
successful relationship with their communities.
Page 48.
Social Impact
Goal 17: Partnerships for the goals
GRI 415: Public Policy 2016
415-1
Political contributions
Alpek does not grant contributions to parties or political
representatives.
Page 118.
Goal 16: Peace, justice and strong institutions
GRI 416: Customer Health and Safety 2016
416-1
Assessment of the health and safety impacts of product and service
categories
Page 108.
Value Chain Management
Goal 16: Peace, justice and strong institutions
416-2
Incidents of non-compliance concerning the health and safety impacts
of products and services
In 2024 there were no cases of non-compliance with this concept.
Value Chain Management
Goal 16: Peace, justice and strong institutions
GRI 418: Customer Privacy 2016
418-1
Substantiated complaints concerning breaches of customer privacy and
losses of customer data.
In 2024 there were no claims related to the violation of privacy or
customer data breaches.
Value Chain Management
Cybersecurity
Goal 16: Peace, justice and strong institutions
135
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
As of and for the Years Ended December 31, 2024, 2023 and 2022,
and Independent Auditors’ Report Dated January 31, 2025.
Consolidated Financial
Statements
136
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Opinion
We have audited the consolidated financial statements of Alpek, S. A. B. de C. V. and
Subsidiaries (“Alpek” or the “Company”), which comprise the consolidated statements of
financial position as of December 31, 2024, 2023 and 2022, the consolidated statements
of income, the consolidated statements of comprehensive income, the consolidated
statements of changes in stockholders’ equity and the consolidated statements of cash
flows for the years then ended, and the notes to the consolidated financial statements,
including material accounting policies information.
In our opinion, the accompanying consolidated financial statements present fairly, in
all material respects, the consolidated financial position of Alpek, S. A. B. de C. V. and
Subsidiaries as of December 31, 2024, 2023 and 2022, and their consolidated financial
performance and consolidated cash flows for the years then ended, in accordance
with IFRS Accounting Standards, as issued by the International Accounting Standards
Board (IASB).
Basis for Opinion
We conducted our audits in accordance with International Standards on Auditing (“ISA”).
Our responsibilities under those standards are further described in the Auditors’ Respon-
sibilities for the Audit of the Consolidated Financial Statements section of our report. We
are independent of the Company in accordance with the International Ethics Standards
Board for Accountants’ Code of Ethics for Professional Accountants (“IESBA Code”)
together with the Code of Ethics issued by the Mexican Institute of Public Accountants
(“IMCP Code”), and we have fulfilled our other ethical responsibilities in accordance with
the IESBA Code and with the IMCP Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Other matters
The accompanying consolidated financial statements have been translated from Spanish
to English for the convenience of readers.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most
significance in our audit of the consolidated financial statements for the current period.
These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. We have determined that the matter described below
is the key audit matter that should be reported in our report.
Recognition of revenue in subsidiaries
The amount of the Company's revenue has a high degree of dependence on the adequacy
of management's assessment regarding the point in time when control of the goods
is considered to have been transferred to its customers, which is highly related to the
contractually agreed-upon terms of sale, said terms vary among Alpek's subsidiaries.
Due to the significance of the evaluation that the Company's management must perform
at each reporting period to identify the moment when the performance obligation is
satisfied for revenue recognition, we consider this to represent a key audit matter.
How our audit addressed this key audit matter:
To carry out audit procedures that mitigate the identified risk in a reasonable manner,
we include, among others, the following procedures:
•
We identified and assessed the risks of material misstatement related to revenue
recognition, including the risk of fraud.
•
We tested design and implementation, as well as operating effectiveness of relevant
controls that mitigate the risks.
•
We determined the scope for subsidiaries aiming to of reduce the risk to an acceptably
low level.
•
We designed and performed substantive tests of details and substantive analytical
procedures.
•
We directed, supervised, and reviewed the work of component auditors.
•
We reviewed compliance with the presentation and disclosure requirements set forth
in the accounting standard IFRS 15, Revenue from Contracts with Customers.
The results of our procedures were satisfactory.
Information other than the consolidated financial statements and auditor’s report
thereon
The Company’s management is responsible for the additional information presented.
Additional information includes: i) the information incorporated in the annual report that
the Company is required to prepare in accordance with Article 33, section I, subsection
b) of Title Four, Chapter One of the General Provisions Applicable to Issuers and other
Participants of the Stock Market in México and the Instructions that accompany these
provisions (the "Provisions"), which is expected that the Annual Stock Exchange Filling
and the annual report to be available for reading after the date of this audit report; and
ii) other additional information, which is a measure that is not required by IFRS Account-
ing Standards of accounting, and has been incorporated for the purpose of providing
additional explanation to its investors and main readers of its consolidated financial
statements to evaluate the performance of each of the operating segments and other
indicators on the capacity to meet obligations regarding the earnings before interest,
taxes, depreciation, amortization and non-current asset impairment ("adjusted EBITDA")
of the Company; this information is presented in Note 29.
Our opinion of the consolidated financial statements will not cover the additional infor-
mation and we will not express any form of assurance about it.
In connection with our audit of the consolidated financial statements, our responsibility
will be to read the additional information, when it becomes available, and when we do
so, to consider whether the additional information contained therein is materially in-
consistent with the consolidated financial statements or our knowledge obtained in the
audit or appears to contain a material misstatement. When we read the Annual Report,
we will issue the declaration on its reading, required in Article 33, Section I, subsection b)
Independent Auditors’ Report to the Board of Directors and Stockholders of
Alpek, S. A. B. de C. V. and Subsidiaries
(Figures in millions of Mexican pesos “$” and millions of U.S. dollars “US$”)
137
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
number 1.2 of the Provisions. Also, and in connection with our audit of the consolidated
financial statements, our responsibility is to read and recalculate the additional infor-
mation, which in this case is the measure not required by IFRS Accounting Standards of
accounting, and in doing so, consider whether the other information contained therein
is materially inconsistent with the consolidated financial statements or our knowledge
obtained during the audit, or appears to be materially misstated. If, based on the work
we have performed, we conclude that there is a material misstatement in the additional
information; we would be required to report that fact. As of the date of this report, we
have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRS Accounting Standards of accounting issued
by the IASB, and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for as-
sessing the Company’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those responsible with Company´s governance are responsible for overseeing the Com-
pany’s consolidated financial reporting process.
Auditors’ responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated finan-
cial statements as a whole are free from material misstatement, whether due to fraud or
error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken
on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial state-
ments, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in
the consolidated financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditors’ report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statements,
including the disclosures, and whether the consolidated financial statements represent
the underlying transactions and events in a manner that achieves fair presentation.
Plan and perform the group audit to obtain sufficient audit evidence regarding the
financial information of the entities or business units within Alpek as a basis for forming
an opinion on the group’s financial statements. We are responsible for the direction,
supervision, and review of the audit work performed for the purposes of Alpek's group
audit. We are solely responsible for our audit opinion.
We communicate with those charged with governance in the Company regarding, among
other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance in the Company with a statement that
we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance in the Company, we
determine those matters that were of most significance in the audit of the consolidated
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors’ report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.
Galaz, Yamazaki, Ruiz Urquiza, S.C.
Affiliate of a member firm of Deloitte Touche Tohmatsu Limited
C. P. C. JESÚS ISRAEL ALMAGUER GÁMEZ
Monterrey, Nuevo León, México
January 31, 2025
138
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
As of December 31, 2024, 2023 and 2022
In millions of Mexican pesos
Assets
Current assets:
Cash and cash equivalents
6
$
6,216
$
7,391
$
6,319
Restricted cash
6
386
8
193
Trade and other accounts receivable, net
7
18,431
17,473
23,248
Inventories
8
28,244
23,322
33,893
Derivative financial instruments
4
10
86
7
Prepayments
9
885
744
765
Total current assets
54,172
49,024
64,425
Non-current assets:
Restricted cash
6
-
314
360
Property, plant and equipment, net
10
46,317
40,952
48,451
Right-of-use asset, net
11
3,737
3,170
3,452
Goodwill and intangible assets, net
12
3,675
3,494
4,425
Deferred income taxes
20
4,140
1,334
1,709
Derivative financial instruments
4
5
9
3
Prepayments
9
12
6
7
Investments accounted for using the equity
method and other non-current assets
13
4,659
4,381
13,987
Total non-current assets
62,545
53,660
72,394
Total assets
$
116,717
$
102,684
$
136,819
Liabilities and Stockholders’ Equity
Current liabilities:
Debt
16
$
1,636
$
689
$
7,712
Lease liability
17
944
701
821
Trade and other accounts payable
15
31,336
27,129
31,985
Income taxes payable
20
433
390
1,410
Derivative financial instruments
4
802
253
1,220
Provisions
18
199
749
794
Total current liabilities
35,350
29,911
43,942
Non-current liabilities:
Debt
16
38,934
32,648
31,369
Lease liability
17
3,160
2,755
2,803
Derivative financial instruments
4
37
12
21
Provisions
18
1,651
739
1,060
Deferred income taxes
20
3,075
2,024
3,845
Employee benefits
19
854
880
1,025
Other non-current liabilities
21
151
493
560
Total non-current liabilities
47,862
39,551
40,683
Total liabilities
83,212
69,462
84,625
Stockholders’ equity
Controlling interest:
Capital stock
22
6,019
6,019
6,021
Share premium
8,908
8,909
8,917
Retained earnings
13,777
17,298
31,032
Other reserves
(451)
(3,534)
933
Total controlling interest
28,253
28,692
46,903
Non-controlling interest
14
5,252
4,530
5,291
Total stockholders’ equity
33,505
33,222
52,194
Total liabilities and stockholders’ equity
$
116,717
$
102,684
$
136,819
Consolidated Statements of Financial Position
ALPEK, S. A. B. DE C. V. AND SUBSIDIARIES (SUBSIDIARY OF ALFA, S. A. B. DE C. V.)
The accompanying notes are an integral part of these consolidated financial statements.
Note
2024
2023
2022
Note
2024
2023
2022
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Consolidated
Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
For the years ended December 31, 2024, 2023 and 2022
In millions of Mexican pesos, except for earnings (losses) per share amounts
Revenues
29
$
137,409
$
138,159
$
212,435
Cost of sales
24
(125,721)
(127,863)
(181,401)
Gross profit
11,688
10,296
31,034
Selling expenses
24
(2,012)
(2,132)
(3,144)
Administrative expenses
24
(3,997)
(3,718)
(3,799)
Other (loss) income, net
25
(509)
(10,883)
448
Operating income (loss)
5,170
(6,437)
24,539
Financial income
26
869
1,317
922
Financial expenses
26
(4,449)
(3,982)
(3,224)
Loss due to exchange fluctuation, net
26
(2,340)
(3)
(695)
Financial result, net
(5,920)
(2,668)
(2,997)
Equity in loss of associates and joint ventures recognized
using the equity method
(44)
(201)
(67)
(Loss) income before taxes
(794)
(9,306)
21,475
Income taxes
20
582
(727)
(5,509)
Net consolidated (loss) income
$
(212)
$
(10,033)
$
15,966
(Loss) income attributable to:
Controlling interest
$
(765)
$
(10,914)
$
13,744
Non-controlling interest
553
881
2,222
$
(212)
$
(10,033)
$
15,966
(Losses) earnings per basic and diluted share, in Mexican pesos
$
(0.36)
$
(5.18)
$
6.52
Weighted average outstanding shares (millions of shares)
2,107
2,107
2,108
Consolidated Statements of Income
The accompanying notes are an integral part of these consolidated financial statements.
Note
2024
2023
2022
ALPEK, S. A. B. DE C. V. AND SUBSIDIARIES (SUBSIDIARY OF ALFA, S. A. B. DE C. V.)
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
For the years ended December 31, 2024, 2023 and 2022
In millions of Mexican pesos
Net consolidated (loss) income
$
(212)
$
(10,033)
$
15,966
Other comprehensive (loss) income for the year:
Items that will not be reclassified to the statement of income:
Remeasurement of employee benefit obligations, net of taxes
19, 20
98
5
(19)
Items that will be reclassified to the statement of income:
Equity in other comprehensive income of associates and joint ventures
recognized through the equity method
1
(1)
1
Effect of derivative financial instruments designated as cash flow
hedges, net of taxes
4, 20
(452)
765
(855)
Translation effect of foreign entities
4, 20
4,345
(5,923)
(2,652)
Total other comprehensive (loss) income for the year
3,992
(5,154)
(3,525)
Consolidated comprehensive (loss) income
$
3,780
$
(15,187)
$
12,441
Attributable to:
Controlling interest
$
2,318
$
(15,381)
$
10,556
Non-controlling interest
1,462
194
1,885
Comprehensive (loss) income for the year
$
3,780
$
(15,187)
$
12,441
Consolidated Statements of Comprehensive Income
The accompanying notes are an integral part of these consolidated financial statements.
Note
2024
2023
2022
ALPEK, S. A. B. DE C. V. AND SUBSIDIARIES (SUBSIDIARY OF ALFA, S. A. B. DE C. V.)
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Consolidated
Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
For the years ended December 31, 2024, 2023 and 2022
In millions of Mexican pesos
Balance as of January 1, 2022
$
6,028
$
8,976
$
24,591
$
4,121
$
43,716
$
5,870
$
49,586
Net income
-
-
13,744
-
13,744
2,222
15,966
Total other comprehensive loss for the year
-
-
-
(3,188)
(3,188)
(337)
(3,525)
Comprehensive income
-
-
13,744
(3,188)
10,556
1,885
12,441
Dividends declared
-
-
(7,515)
-
(7,515)
(2,464)
(9,979)
Reissuance of shares
19
161
-
-
180
-
180
Repurchase of shares
(26)
(220)
-
-
(246)
-
(246)
Other
-
-
212
-
212
-
212
Balance as of December 31, 2022
6,021
8,917
31,032
933
46,903
5,291
52,194
Net loss
-
-
(10,914)
-
(10,914)
881
(10,033)
Total other comprehensive loss for the year
-
-
-
(4,467)
(4,467)
(687)
(5,154)
Comprehensive loss
-
-
(10,914)
(4,467)
(15,381)
194
(15,187)
Dividends declared
-
-
(2,866)
-
(2,866)
(955)
(3,821)
Reissuance of shares
36
176
-
-
212
-
212
Repurchase of shares
(38)
(184)
-
-
(222)
-
(222)
Other
-
-
46
-
46
-
46
Balance as of December 31, 2023
6,019
8,909
17,298
(3,534)
28,692
4,530
33,222
Net loss
-
-
(765)
-
(765)
553
(212)
Total other comprehensive loss for the year
-
-
-
3,083
3,083
909
3,992
Comprehensive loss
-
-
(765)
3,083
2,318
1,462
3,780
Dividends declared
-
-
(2,634)
-
(2,634)
(776)
(3,410)
Reissuance of shares
31
108
-
-
139
-
139
Repurchase of shares
(31)
(109)
-
-
(140)
-
(140)
Other
-
-
(122)
-
(122)
36
(86)
Balance as of December 31, 2024
$
6,019
$
8,908
$
13,777
$
(451)
$
28,253
$
5,252
$
33,505
Consolidated Statements of Changes in Stockholders’ Equity
Total
Non-
Total
Capital
Share
Retained
Other
controlling
controlling
stockholders’
stock
premium
earnings
reserves
interest
interest
equity
The accompanying notes are an integral part of these consolidated financial statements.
ALPEK, S. A. B. DE C. V. AND SUBSIDIARIES (SUBSIDIARY OF ALFA, S. A. B. DE C. V.)
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
For the years ended December 31, 2024, 2023 and 2022
In millions of Mexican pesos
Cash flows from operating activities
(Loss) income before income taxes
$
(794)
$
(9,306)
$
21,475
Depreciation and amortization
4,767
4,619
4,639
Impairment of long-lived assets
1,791
11,078
246
Allowance for doubtful accounts
(17)
(101)
(163)
Financial result, net
4,678
2,007
2,699
Gain on business combinations
(47)
-
(425)
(Gain) loss on sale of property, plant and equipment
(27)
66
74
Statutory employee profit sharing, provisions
and other items
(403)
2,247
764
Subtotal
9,948
10,610
29,309
Movements in working capital
(Increase) decrease in trade receivables and other assets
2,910
(2,107)
365
Decrease (increase) in inventories
(2,482)
6,623
(5,525)
Increase (decrease) in trade and other accounts payable
(2,746)
4,296
(3,218)
Income taxes paid
(1,372)
(4,398)
(5,721)
Net cash flows generated from operating activities
6,258
15,024
15,210
Cash flows from investing activities
Interest collected
670
1,258
511
Cash flows in acquisition of property, plant and equipment
(2,016)
(2,501)
(3,068)
Cash flows in sale of property, plant and equipment
61
13
93
Cash flows in acquisition of intangible assets
(18)
(40)
(11)
Cash flows in business acquisition, net of cash acquired
1
(512)
(10,198)
Cash flows paid in investment in associates and joint ventures
(250)
(1,925)
(831)
Loans granted to related parties
(216)
(65)
-
Notes receivable
(67)
-
(35)
Collection of notes
128
273
883
Restricted cash
1
179
(252)
Net cash flows used in investing activities
(1,706)
(3,320)
(12,908)
Cash flows from financing activities
Proceeds from debt
16,470
36,732
15,600
Payments of debt
(15,966)
(37,104)
(7,474)
Lease payments
(1,269)
(1,170)
(1,109)
Interest paid
(2,595)
(3,059)
(2,541)
Dividends paid by Alpek, S. A. B. de C. V.
(2,537)
(2,966)
(7,443)
Dividends paid by subsidiaries to non-controlling interest
(776)
(955)
(2,464)
Repurchase of shares
(140)
(222)
(246)
Reissuance of shares
139
212
180
Loan payments to related parties and others
-
-
(118)
Net cash flows used in financing activities
(6,674)
(8,532)
(5,615)
(Decrease) increase in cash and cash equivalents
(2,122)
3,172
(3,313)
Effect of changes in exchange rates
947
(2,100)
(909)
Cash and cash equivalents at the beginning of the year
7,391
6,319
10,541
Cash and cash equivalents at the end of the year
$
6,216
$
7,391
$
6,319
Consolidated Statements of Cash Flows
The accompanying notes are an integral part of these consolidated financial statements.
2024
2023
2022
2024
2023
2022
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
As of and for the years ended December 31, 2024, 2023 and 2022
Millions of Mexican pesos, except where otherwise indicated
In the following notes to the financial statements when referring to pesos or "$", it means millions of Mexican pesos. When re-
ferring to dollars or "US$", it means millions of dollars from the United States of America. When referring to Euros or "€" it means
millions of Euros.
2. SIGNIFICANT EVENTS
2024
a. Approval of the spin-off of Alfa´s equity interest in Alpek and the creation of Controladora Alpek
On October 24, 2024, the Shareholders' Meeting of Alfa SAB approved the spin-off of its entire equity interest in Alpek.
The process was subject to certain suspensive conditions, including the registration of Controladora Alpek as a listed issuer on
the Stock Exchange, which has not been completed as of December 31, 2024.
b. Suspension of EPS operations in Beaver Valley
On November 4, 2024, the Company announced its plans to suspend production at its Beaver Valley EPS facility in Monaca,
Pennsylvania, by January 2025.
The Company recognized impairment of inventories and fixed assets amounting to $96.5 (US$4.8) and $1,191 (US$58.7), respec-
tively, for the year ended December 31, 2024.
2023
c. Interruption for an indefinite term of Cooper River's PET resin production
On March 1, 2023, the Company announced the indefinite interruption of PET resin production at its Cooper River plant, located
in Charleston, South Carolina. The plant had an installed capacity of 170,000 tons of PET resin.
Notes to the Consolidated Financial Statements
1.
GENERAL INFORMATION
Alpek, S. A. B. de C. V. and Subsidiaries (“Alpek” or the “Company”) is a petrochemical company with operations through two
major business segments: “Polyester” and “Plastics and Chemicals”. The Polyester segment comprises the production of purified
terephthalic acid (“PTA”), polyethylene terephthalate (“PET”), recycled PET (“rPET"), and polyester fibers, which are mainly used for
food and beverage packaging, textile and industrial filament markets. The Plastics & Chemicals business segment comprises the
production of polypropylene (“PP”), expandable styrene (“EPS” and “Arcel®”), fertilizers and other chemicals, which serves a wide
range of markets, including the consumer goods, automotive, construction, agriculture, pharmaceutical and other markets.
Alpek is one of the largest petrochemical companies in México and the second largest in Latin America. Additionally, it is the
main integrated producer of polyester and one of the main producers of rPET in America. It operates the largest EPS plant in the
continent, and one of the largest PP plants in North America.
When reference is made to the controlling entity Alpek, S.A.B. of C.V. as an individual legal entity, it will be referred to as “Alpek
SAB”.
The shares of Alpek SAB are traded on the Mexican Stock Exchange (“MSE”) and has Alfa, S. A. B. de C. V. (“Alfa”) as its main hold-
ing company. As of December 31, 2024, 2023 and 2022, the percentage of shares that traded on the MSE was 17.37%, 17.37%, and
17.39%, respectively.
Alpek SAB is located at Avenida Gómez Morín Sur No. 1111, Col. Carrizalejo, San Pedro Garza García, Nuevo León, México and oper-
ates productive plants located in México, the United States of America, Oman, Saudi Arabia, Canada, Argentina, Chile, Brazil and
United Kingdom.
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2024
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Alpek
2024
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
The Company started the process of decommissioning and dismantling of assets, as well as environmental cleanup and reme-
diation, which is why, the Company registered provisions for these concepts for $379 (US$20.8). Additionally, the Company had
other direct costs attributable to the closure, mainly for severance pay and cancellation of contracts for $169 (US$9.1).
Derived from the interruption in production, the Company performed impairment tests on the fixed assets associated with the
plant and recorded an impairment charge related to these assets of $950 (US$51.9). Additionally, it recognized and inventory
impairment of $63 (US$3.4).
d. US$200 million loan linked to sustainability
On August 3, 2023, Alpek announced that it refinanced the outstanding balance of the bond due in August 2023, with bank
debt that includes a US$200 Sustainability Linked Credit maturing in 2028.
The loan incorporates a pricing mechanism that incentivizes progress on two of the Company’s ESG objectives:
•
Reduction in carbon emissions Scope 1, 2 and 3.
•
Reduction in its incidence rate for its employees and contractors.
e. Closure of the filament production plant
On August 18, 2023, the Company announced the closure of its textile and industrial fiber production plant located in Monterrey.
Alpek made the decision to close operations at these facilities and not replace their production because the excess production
experienced worldwide in recent years has represented a significant reduction in its profitability for the filament industry and
it is not expected that this situation will change in the near future.
The Company recognized an impairment of inventories and fixed assets for $121 (US$7) and $409 (US$23.7), respectively, for the
year ended December 31, 2023. Additionally, it had impacts due to employee terminations for $193 (US$11.1).
f. Corpus Christi Polymers construction pause
On September 27, 2023, Alpek announced that Corpus Christi Polymers (“CCP”) temporarily paused construction of the inte-
grated PTA-PET plant in Corpus Christi, Texas. The partners decided to pause it because high inflation rates and other factors
caused construction and labor costs to exceed initial expectations. Options will also be evaluated to optimize the project's
costs and schedule. This site will be adequately preserved so that construction can resume in the future.
Based on the requirements of IAS 28 and IAS 36, the Company identified that the pause in construction of the plant generated
signs of impairment on its investment in the joint venture. Alpek determined through the discounted cash flow model and
considering the decisions of its Board of Directors, to recognize an impairment of its investment in the joint venture of $9,591
(US$557) for the year ended December 31, 2023.
As of December 31, 2024, construction of the integrated PTA-PET plant in Corpus Christi, Texas, remains on pause.
2022
g. OCTAL Acquisition
On January 31, 2022, a subsidiary of Alpek signed an agreement to acquire the Octal business (see Note 3b). This acquisition
represents a growth through vertical integration for Alpek into the high value PET sheet business. Octal is a major global
producer of PET sheet through a strategically centered logistics position in Oman.
Alpek acquired Octal for a consideration of $12,147 (US$620). On June 1, 2022, Alpek assumed control of Octal's operations.
From the acquisition date, working capital and recovery of cost adjustments related to the transaction were made, and to-
gether reduced the initial consideration by $186.1 (US$9.5); additionally, an adjustment was made for cash surplus against debt
which increased the initial consideration by $1,782.9 (US$91). The contract includes a contingent consideration based on future
business results and other considerations, which, in compliance with the requirements of IFRS 3, Business Combinations (“NIIF
3”), was valued at $914.9 (US$46.7) and that together with the aforementioned adjustments derived in a total consideration
that was equivalent to $14,658.7 (US$748.2).
Total cash flows paid for the acquisition amounted to $13,397.1 (US$682.9), which were made by wire transfer. Financing for the
acquisition was through a combination of free cash flow generated from existing businesses and dedicated bank loans.
The amount pending payment as of December 31, 2022 retained by Alpek pursuant to the agreement for possible litigation is
$360.1 (US$18.6), was deposited in a trust, and is presented within restricted cash and its corresponding liability.
145
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
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The acquisition of Octal met the criteria for a business combination in accordance with the requirements of IFRS 3; therefore,
the Company applied the acquisition method to measure the acquired assets and assumed liabilities in the transaction. The
fair values are as follows:
Current assets (1)
US$
551.4
Non-current assets (2)
604.8
Intangible assets (3)
83.4
Current liabilities (4)
(432.2)
Non-current liabilities (5)
(37.5)
Net assets acquired
769.9
Gain on business combination
(21.7)
Final consideration
748.2
Cash surplus net of debt
(91)
Total consideration net of cash surplus
US$
657.2
(1)
Current assets consist of cash, restricted cash, accounts receivable, inventories and other assets for US$160.6, US$14.9 US$118.8, US$252.7 and
US$4.4, respectively.
(2)
Non-current assets consist of property, plant and equipment and right of use assets of US$591.6 and US$13.2, respectively.
(3)
Intangible assets consist of patents.
(4)
Current liabilities consist of suppliers and other accounts payable, current portion of debt, and other liabilities for US$388.2, US$41.0 and
US$3.0, respectively.
(5)
Non-current liabilities consist of debt, lease liability and other liabilities for US$20.6, US$13.7 and US$3.2, respectively.
As a result of this transaction, a gain associated with the business combination was recognized for an amount of $425.0 (US$21.7),
recognized in 2022 in the other income (expenses), net item (see Note 25). Under the terms of IFRS 3, the gain associated with
the business combination was primarily generated because the sale of the business followed the strategy maintained by the
selling Shareholders of taking the opportunity to exit, even sacrificing the value of the assets at that time.
Revenues and net income for the seven-month period ended December 31, 2022, contributed by Octal amounted to $17,174
(US$858) and $3,013 (US$150), respectively.
The results of the acquired operations have been included in the consolidated financial statements since the acquisition date,
therefore, the consolidated financial statements as of and for the year ended December 31, 2022 are not comparable with
previous years. The consolidated statement of cash flows for the year ended December 31, 2022, presents the disbursement for
the acquisition of Octal in a single line within investment activities, net of the cash acquired.
If the acquisition had occurred on January 1, 2022, proforma consolidated revenues and net income for the year ended December
31, 2022, would have been $29,317 (US$1,455) and $4,805 (US$238), respectively. These amounts were calculated using the re-
sults of the subsidiary and adjusting them for the additional depreciation and amortization that would have been recognized
assuming the fair value of the adjustments of property, plant and equipment and intangible assets as of January 1, 2022.
h. Corpus Christi Polymers resumes construction
On July 18, 2022, Alpek announced that the three partners of Corpus Christi Polymers LLC ("CCP") would resume the construc-
tion of the plant in August 2022 with completion expected in early 2025. The project will have a total capacity of 1.1 million tons
and 1.3 million tons per year of PET and PTA, respectively, with which Alpek would have approximately 367,000 tons of PET and
433,000 tons of PTA. CCP expects to have the most competitive state-of-the-art plant in the Americas, which will use Alpek's
IntegRex technology for PTA processes, among others.
During the year ended December 31, 2022 the investments made were for $733 (US$36.5). During the year ended December 31,
2023, construction of the plant was temporarily paused (see Note 2f).
3. SUMMARY OF MATERIAL ACCOUNTING POLICIES
The following are the material accounting policies followed by the Company and its subsidiaries, which have been consistently
applied in the preparation of their financial information in the years presented, unless otherwise specified:
a) Basis of preparation
The consolidated financial statements of Alpek have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). IFRS include all International Accounting
Standards ("IAS") in force and all related interpretations issued by the International Financial Reporting Interpretations
Committee (“IFRIC”), including those previously issued by the Standing Interpretations Committee (“SIC”).
The consolidated financial statements have been prepared on a historical cost basis, except for the cash flow hedges, which
are measured at fair value, and for the financial assets and liabilities at fair value through profit or loss with changes reflected
in the consolidated statement of income and for financial assets available for sale.
The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting
estimates. Additionally, it requires Management to exercise judgment in the process of applying the Company's accounting
policies. The areas involving a higher degree of judgment or complexity, or areas where judgments and estimates are signifi-
cant to the consolidated financial statements are disclosed in Note 5.
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b) Consolidation
i. Subsidiaries
The subsidiaries are all the entities over which the Company has control. The Company controls an entity when it is ex-
posed or has the right to variable returns from its interest in the entity and it is capable of affecting the returns through its
power over the entity. When the Company's participation in subsidiaries is less than 100%, the share attributed to outside
stockholders is reflected as non-controlling interest. Subsidiaries are fully consolidated from the date on which control is
transferred to the Company and up to the date it loses such control.
The accounting method used by the Company for business combinations is the acquisition method. The Company defines
a business combination as a transaction through which it obtains control over a business, whereby it has the power to steer
and manage the relevant operations of all assets and liabilities of the business with the purpose of providing a return in
the form of dividends, lower costs or other economic benefits directly to investors.
The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities
incurred and the equity interests issued by the Company. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable acquired assets and liabilities and
contingent liabilities assumed in a business combination are initially measured at their fair values at the acquisition date.
The Company recognizes any non-controlling interest in the acquiree based on the share of the non-controlling interest in
the net identifiable assets of the acquired entity.
The Company accounts for business combinations of entities using the predecessor method in a jointly controlled entity.
The predecessor method involves the incorporation of the carrying amounts of the acquired entity, which includes the
goodwill recognized at the consolidated level with respect to the acquiree. Any difference between the carrying value of
the net assets acquired at the level of the subsidiary and its carrying amount at the level of the Company is recognized in
stockholders’ equity.
The acquisition-related costs are recognized as expenses in the consolidated statement of income when incurred.
Goodwill is initially measured as excess of the sum of the consideration transferred and the fair value of the non-controlling
interest over the net identifiable assets and liabilities assured. If the consideration transferred is less than the fair value
of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognized directly in the
consolidated statement of income.
If the business combination is achieved in stages, the value in books at the acquisition date of the equity previously held
by the Company in the acquired entity is remeasured at its fair value at the acquisition date. Any loss or gain resulting from
such remeasurement is recorded in the consolidated income of the year.
Transactions, intercompany balances and unrealized gains on transactions between Alpek’s companies are eliminated in
preparing the consolidated financial statements. Alpek’s subsidiaries consistently apply the accounting policies as those
disclosed in these consolidated financial statements.
As of December 31, 2024, 2023 and 2022, the main companies that comprise the consolidated financial statements of the
Company are as follows:
Country (1)
Shareholding (%) (2)
Functional
Currency
2024
2023
2022
Alpek, S. A. B. de C. V. (Holding Company)
Mexican peso
Alpek Polyester, S. A. de C. V. (Holding Company)
100
100
100
US dollar
Alpek Polyester USA, LLC (9)
USA
100
100
100
US dollar
Alpek Polyester México, S.A. de C.V. (10)
100
100
100
US dollar
DAK Américas Exterior, S. L. (Holding Company)
Spain
100
100
100
US dollar
Alpek Polyester Argentina S. A. (3)
Argentina
100
100
100
US dollar
Compagnie Alpek Polyester Canada (Selenis) (4) (5)
Canada
100
100
100
US dollar
Tereftalatos Mexicanos, S. A. de C. V. (Temex)
91
91
91
US dollar
Akra Polyester, S. A. de C. V.
93
93
93
US dollar
Alpek Polyester Pernambuco S. A. (6)
Brazil
100
100
100
Brazilian real
Alpek Polyester Brasil S. A. (7)
Brazil
100
100
100
Brazilian real
Indelpro, S. A. de C. V. (Indelpro)
51
51
51
US dollar
Polioles, S. A. de C. V. (Polioles)
50
50
50
US dollar
Grupo Styropek, S. A. de C. V. (Holding Company)
100
100
100
Mexican peso
Styropek México, S. A. de C. V.
100
100
100
US dollar
Styropek, S. A.
Argentina
100
100
100
Argentine peso
Aislapol, S. A.
Chile
100
100
100
Chilean peso
Styropek do Brasil, LTD
Brazil
100
100
100
Brazilian real
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Country (1)
Shareholding (2)
Functional
Currency
2024
2023
2022
Unimor, S. A. de C. V. (Holding Company)
100
100
Mexican peso
Univex, S. A.
100
100
100
Mexican peso
Alpek Polyester UK LTD
United
Kingdom
100
100
100
Pound sterling
BVPV Styrenics LLC
USA
100
100
100
US dollar
Octal (8)
Oman
100
100
100
US dollar
Clear Path Recycling, LLC (11)
USA
100
-
-
US dollar
Agua Industrial del Poniente, S.A. de C.V. (12)
56
-
-
Mexican peso
(1)
Companies incorporated in México, except those indicated.
(2)
Ownership percentage that Alpek has in the holding companies and ownership percentage that such holding companies have in the
companies integrating the groups. Ownership percentages and the voting rights are the same.
(3)
During 2022, DAK Américas Argentina, S. A. changed its legal name to Alpek Polyester Argentina S. A. On March 1, 2024, Alpek Polyester
Argentina, S.A. changed its functional currency. As of and for the years ended December 31, 2023 and 2022, the functional currency was
the Argentine peso.
(4)
On August 25, 2022, Alpek acquired the remaining 50% - 1 share of the shareholding in this entity in exchange for a consideration of
$119.6 (US$6); derived from the negotiation for the acquisition of the remaining shares, the contingent liability that Alpek had for the
earn-out for 149.5 (US$7.5) was canceled, together with a compensation asset for $25.9 (US$1.3), both came from the sale and purchase
agreement. The net effects of these transactions were recognized within "Other income (expenses), net" in the consolidated statement of
comprehensive income for the year ended December 31, 2022.
(5)
During 2022, DAK Compagnie Selenis Canada changed its legal name to Compagnie Alpek Polyester Canada.
(6)
During 2022, Companhia Petroquímica de Pernambuco-PetroquímicaSuape changed its legal name to Alpek Polyester Pernambuco S. A.
(7)
During 2022, Companhia Integrada Têxtil de Pernambuco- CITEPE changed its legal name to Alpek Polyester Brasil S. A.
(8)
Group of entities acquired in 2022 and integrates the following entities: Octal Holding UK LTD, Octal Holding SAOC, Octal SAOC FZC,
Crystal Pack FZC LLC, Crystal Packing Solutions LLC, Octal DMCC, Octal Inc, Octal Extrusion Corp, Octal Saudi Arabia Plant LLC and OCTAL
FINANCE BV (liquidated in 2023). (Note 2g)
(9)
During 2023, DAK Americas LLC changed its legal name to Alpek Polyester USA, LLC.
(10) During 2023, Dak Resinas Américas México, S.A. de C.V. changed its legal name to Alpek Polyester México, S.A. de C.V.
(11)
On September 1, 2024, Alpek obtained control over this investment in associates, holding 100% of the shareholding as of December 31,
2024. The shareholding as of December 31, 2023 and 2022 was 49.9%.
(12)
On June 13, 2024, Alpek obtained control over this investment in associates, holding 55.6% of the shareholding as of December 31, 2024.
The shareholding as of December 31, 2023 and 2022 was 47.6%.
As of December 31, 2024, 2023 and 2022, there are no significant restrictions for investment in shares of subsidiary companies
mentioned above.
ii. Absorption (dilution) of control in subsidiaries
The effect of absorption (dilution) of control in subsidiaries, in example, an increase or decrease in the percentage of
control, is recorded in stockholders' equity, directly in retained earnings, in the period in which the transactions that
cause such effects occur. The effect of absorption (dilution) of control is determined by comparing the book value of the
investment before the event of dilution or absorption against the book value after the relevant event. In the case of loss of
control, the dilution effect is recognized in the consolidated income.
When the Company issues purchase obligations on certain non-controlling interests in a consolidated subsidiary and
non-controlling stockholders retain the risks and awards on these shares in the consolidated subsidiary, these are recog-
nized as financial liabilities for the present value of the refundable amount of the options, initially recorded with a corre-
sponding reduction in the stockholders' equity, and subsequently accruing through financial charges to income during the
contractual period.
iii. Sale or disposal of subsidiaries
When the Company ceases to have control any retained interest in the entity is re-measured at fair value, and the change
in the carrying amount is recognized in the consolidated statement of income. The fair value is the initial carrying value
for the purposes of accounting for any subsequent retained interest in the associate, joint venture or financial asset. Any
amount previously recognized in comprehensive income in respect of that entity is accounted for as if the Company had
directly disposed of the related assets and liabilities. This results in the amounts previously recognized in the consolidated
comprehensive income being reclassified to the consolidated income for the year.
iv. Associates
Associates are all entities over which the Company has significant influence but not control. Generally, an investor must
hold between 20% and 50% of the voting rights in an investee for it to be an associate. Investments in associates are ac-
counted for using the equity method and are initially recognized at cost. The Company's investment in associates includes
goodwill identified at acquisition, net of any accumulated impairment loss.
If the equity in an associate is reduced but significant influence is maintained, only a portion of the amounts recognized in
the consolidated comprehensive income are reclassified to the consolidated income for the year, where appropriate.
The Company's share of profits or losses of associates post-acquisition is recognized in the consolidated statement of
income and its share in the consolidated other comprehensive income of associates is recognized as other consolidated
comprehensive income. When the Company's share of losses in an associate, equals or exceeds its equity in the associate,
including unsecured receivables, the Company does not recognize further losses unless it has incurred obligations or made
payments on behalf of the associate.
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The Company assesses at each reporting date whether there is objective evidence that the investment in the associate is
impaired.
Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s
equity in such gains. Unrealized losses are also eliminated unless the transaction provides evidence that the asset trans-
ferred is impaired. In order to ensure consistency with the policies adopted by the Company, the accounting policies of
associates have been modified. When the Company ceases to have significant influence over an associate, any difference
between the fair value of the remaining investment, including any consideration received from the partial disposal of the
investment and the book value of the investment is recognized in the consolidated statement of income.
v. Joint ventures
Joint arrangements are those where there is joint control since the decisions over relevant activities require the unanimous
consent of each one of the parties sharing control.
Investments in joint arrangements are classified in accordance with the contractual rights and obligations of each investor
such as: joint operations or joint ventures. When the Company holds the right over assets and obligations for related assets
under a joint arrangement, this is classified as a joint operation. When the company holds rights over net assets of the
joint arrangement, this is classified as a joint venture. The Company has assessed the nature of its joint arrangements and
classified them as joint ventures. Joint ventures are accounted for by using the equity method applied to an investment in
associates.
The Company evaluates at each reporting date whether there is objective evidence that there are indications of impairment
on the joint agreement. If there are indications, it determines the recoverable value based on the requirements of IAS 36
and recognizes an impairment if such recoverable value is below the carrying amount of the joint agreement.
c) Foreign currency translation
i. Functional and presentation currency
The amounts included in the financial statements of each of the Company's subsidiaries, associates and joint ventures
should be measured using the currency of the primary economic environment in which the entity operates (the “functional
currency"). The consolidated financial statements are presented in Mexican pesos.
When there is a change in the functional currency of one of the subsidiaries, according to International Accounting Standard
21, Effects of Changes in Foreign Exchange Rates (“IAS 21”), this change is accounted for prospectively, translating at the date
of the functional currency change, all assets, liabilities, equity, and income items at the exchange rate of that date.
ii. Transactions and balances
Transactions in foreign currencies are translated into the functional currency using the foreign exchange rates prevailing at
the transaction date or valuation date when the amounts are re-measured. Gains and losses resulting from the settlement
of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the
closing exchange rates are recognized as foreign exchange gain or loss in the consolidated statement of income, except for
those which are deferred in comprehensive income and qualify as cash flow hedges.
Changes in the fair value of securities or monetary financial assets denominated in foreign currency classified as available
for sale are divided between fluctuations resulting from changes in the amortized cost of such securities and other changes
in value. Subsequently, currency fluctuations are recognized in income and changes in the carrying amount arising from
any other circumstances are recognized as part of comprehensive income.
iii. Translation of subsidiaries with recording currency other than the functional currency
The financial statements of foreign subsidiaries having a recording currency different from their functional currency were
translated into the functional currency in accordance with the following procedure:
a) The balances of monetary assets and liabilities denominated in the recording currency were translated at the closing
exchange rate.
b) To the historical balances of monetary assets and liabilities and stockholders' equity translated into the functional
currency the movements that occurred during the period were added, which were translated at the historical exchange
rates. In the case of the movements of non-monetary items recognized at fair value, which occurred during the period,
stated in the recording currency, these were translated using the historical exchange rates in effect on the date when
the fair value was determined.
c) The income, costs and expenses of the periods, expressed in the recording currency, were translated at the historical
exchange rate of the date they were accrued and recognized in the consolidated statement of income, except when they
arose from non-monetary items, in which case the historical exchange rate of the non-monetary items was used.
d) The exchange differences were recognized as income or expense in the consolidated statement of income in the period
they arose.
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iv. Translation of subsidiaries with functional currency other than the presentation currency
The results and financial position of all Company entities that have a functional currency different from the presentation
currency are translated into the presentation currency as follows, depending on whether the functional currency comes
from a non-hyperinflationary or hyperinflationary environment:
Non-hyperinflationary environment
a) Assets and liabilities for each statement of financial position presented are translated at the closing exchange rate at the
date of the statement of financial position;
b) Stockholders’ equity of each statement of financial position presented is translated at historical exchange rate;
c) Income and expenses for each statement of income are translated at average exchange rate (when the average exchange
rate is not a reasonable approximation of the cumulative effect of the rates of the transaction, the exchange rate at the
date of the transaction is used); and
d) The resulting exchange differences are recognized in the consolidated statement of other comprehensive income as
translation effect.
Hyperinflationary environment
a) Assets, liabilities and equity in the statement of financial position, as well as income and expenses in the income
statement, are translated at the closing exchange rate of the statement of financial position, after being restated in its
functional currency (Note 3d); and
b) Assets, liabilities, equity, income and expenses of the comparative period, are maintained according to the amount
obtained in the translation of the year in question, that is, the financial statements of the preceding period. These
amounts are not adjusted to subsequent exchange rates because the Company presents its financial information in
Mexican pesos, which correspond to a currency of a non-hyperinflationary environment.
The primary exchange rates in the various translation processes are listed below:
Local currency to Mexican pesos
Closing exchange rate as of December 31,
Average annual exchange rate
Currency
2024
2023
2022
2024
2023
2022
US dollar
20.27
16.89
19.36
18.52
17.61
20.06
Argentine peso
0.02
0.02
0.11
0.02
0.07
0.15
Brazilian real
3.28
3.48
3.66
3.39
3.53
3.91
Chilean peso
0.02
0.02
0.02
0.02
0.02
0,02
Pound sterling
25.39
21.53
23.29
23.70
21.96
24.71
d) Hyperinflationary effects
As of July 1, 2018, the cumulative inflation from the prior 3 years in Argentina exceeded 100%; consequently, the Argentine
peso was classified as a currency of a hyperinflationary economic environment. As a result, the financial statements of the sub-
sidiaries located in that country, whose functional currency was the Argentine peso, were restated and adjusted for inflation
in accordance with the requirements of the International Accounting Standard 29, Financial Information in Hyperinflationary
Economies ("IAS 29"), and have been consolidated in compliance with the requirements of IAS 21. The purpose of applying
these requirements is to consider changes in the general purchasing power of the Argentine peso in order to present the
financial statements in the measuring unit current at the date of the statement of financial position. The financial statements
before including any inflation adjustments were prepared using the historical cost method.
The Company determined the inflation adjustments in its consolidated financial statements in the following manner:
a. The amounts corresponding to non-monetary items of each statement of financial position, which are not measured at
the date of the statement of financial position at their fair value or net realizable value, as the case may be, are restated
by applying to their historical cost the change of a general price index from the date of acquisition or the date of its last
measurement at fair value, to the date of the statement of financial position;
b. The amounts corresponding to monetary items of the statement of financial position are not restated;
c. The components of stockholders’ equity of each statement of financial position are restated:
1) At the beginning of the first period of application of IAS 29, except for retained earnings, by applying the change of
a general price index from the dates the components were originated to the date of restatement. Restated retained
earnings are derived from all the other balances in the statement of financial position;
2) At the end of the first period and in subsequent periods, all components of stockholders’ equity are restated by applying
a general price index from the beginning of the period or the date of contribution, if later.
d. Revenues and expenses are restated by applying the change in the general price index, from the date on which the expens-
es and revenues were recognized, up to the reporting date.
e. Gains or losses arising from the net monetary position are recognized in the consolidated statement of income.
The Company reflects the effects of hyperinflation on the financial information of its subsidiaries in Argentina using price in-
dexes that are considered appropriate in accordance with Resolution JG 539/18 (the “Resolution") of the Argentine Federation
of Professional Councils of Economic Sciences. This resolution establishes that a combination of price indexes should be
used in the calculation of the effects of restatement of financial statements. Therefore, the Company has decided to use the
Consumer Price Index (“CPI”) to restate balances and transactions.
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The net effects of the restatement of the financial statements of the subsidiaries located in Argentina were not material and
are presented under the heading of "Financial result, net" for the years ended December 31, 2024, 2023 and 2022.
As of March 1, 2024, Alpek Polyester Argentina, S.A., subsidiary of the Company, changed its functional currency from the
Argentine peso to the U.S. dollar as it has changed the way it operates, actively seeking risk coverage against future devaluations
of the Argentine peso, contemplating a greater operation in U.S. dollars, likewise, there has been less restriction to enter into
agreements and collect in a currency other than the Argentine peso, as a result of the elimination of barriers and restrictions
that are triggered by Decree 70/2023 that strengthen the nature of the operation in US dollars, among other factors.
From the change in the functional currency, all transactions in currencies other than the functional currency are considered
"foreign currency transactions". In accordance with the requirements of IAS 21, this change was applied prospectively, therefore
Alpek Polyester Argentina converted its assets and liabilities to the new functional currency at the exchange rate of March 1,
2024, and ceased to apply the requirements of IAS 29, considering that the U.S. dollar is not a currency in a hyperinflationary
environment.
e) Cash and cash equivalents
Cash and cash equivalents include cash on hand, bank deposits available for operations and other short-term investments of
high liquidity and high credit quality with original maturities of three months or less, all of which are subject to insignificant
risk of changes in value. Bank overdrafts are presented as loans as part of the current liabilities.
f) Financial instruments
Financial assets
The Company subsequently classifies and measures its financial assets based on the Company’s business model to manage
financial assets, and on the characteristics of the contractual cash flows of such assets. This way financial assets can be classi-
fied at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss. Management
determines the classification of its financial assets upon initial recognition. Purchases and sales of financial assets are recog-
nized at settlement date.
Financial assets are entirely written off when the right to receive the related cash flows expires or is transferred, and the
Company also has substantially transferred all the risks and rewards of its ownership, as well as the control of the financial
asset.
Classes of financial assets
i. Financial assets at amortized cost
Financial assets at amortized cost are those that i) are held within a business model whose objective is to hold said assets
in order to collect contractual cash flows; and ii) the contractual terms of the financial asset give rise, on specified dates, to
cash flows that are solely payments of principal and interest on the amount of outstanding principal.
ii. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if it is mainly acquired for the purpose of being sold in the short term.
Derivatives are also classified as held for trading unless they are designated as hedges. In addition are those that do not
meet the characteristics to be measured at amortized cost or fair value through other comprehensive income, since: i) they
have a business model different to those that seek to collect contractual cash flows or collect contractual cash flows and
sell the financial assets, or otherwise ii) the generated cash flows are not solely payments of principal and interest on the
amount of outstanding principal.
Impairment of financial assets
The Company uses an impairment model based on expected credit losses rather than losses incurred, applicable to financial
assets subject to such assessment (i.e. financial assets measured at amortized cost and at fair value through other compre-
hensive income), as well as lease receivables, contract assets, certain written loan commitments, and financial guarantee
contracts. The expected credit losses on these financial assets are estimated from the initial recognition of the asset at each
reporting date, using as a reference the past experience of the Company's credit losses, adjusted for factors that are specific
to the debtors or groups of debtors, general economic conditions, and an assessment of both the current direction and the
forecast of future conditions.
a. Trade receivables
The Company adopted the simplified expected loss calculation model, through which expected credit losses during the
account receivable’s lifetime are recognized.
The Company performs an analysis of its portfolio of customer receivables, in order to determine if there are significant
customers for whom it requires an individual assessment; meanwhile, customers with similar characteristics that share
credit risks (participation in the portfolio of accounts receivable, type of market, sector, geographic area, etc.), are grouped
to be evaluated collectively.
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In its impairment assessment, the Company may include indications that the debtors or a group of debtors are experienc-
ing significant financial difficulties, and also observable data indicating that there is a significant decrease in the estimated
cash flows to be received, including arrears.
For purposes of the historical estimate, the Company considers that the following constitutes an event of default, since
historical experience indicates that financial assets are not recoverable when they meet any of the following criteria:
•
The debtor does not fulfill its financial agreements; or
•
Information obtained internally or from external sources indicates that it is unlikely that the debtor will pay its creditors,
including the Company, in its entirety (without considering any guarantee held by the Company).
The Company defined the breach threshold as the period from which the recovery of the account receivable subjected
to analysis is marginal, which is in line with internal risk management.
b. Other financial instruments
The Company recognizes credit losses expected during the asset’s lifetime of all financial instruments for which credit risk
has significantly increased since its initial recognition (assessed on a collective or individual basis), considering all the rea-
sonable and sustainable information, including the one referring to the future. If at the presentation date, the credit risk a
financial instrument has not significantly increased since its initial recognition, the Company calculates the loss allowance
for that financial instrument as the amount of expected credit losses in the following 12 months.
In both cases, the Company recognizes in profit or loss of the period the decrease or increase in the expected credit loss
allowance at the end of the period.
Management assesses the impairment model and the inputs used therein at least once every 3 months, in order to ensure
that they remain in effect based on the current situation of the portfolio.
Financial liabilities
Non-derivative financial liabilities are initially recognized at fair value and are subsequently valued at amortized cost using
the effective interest method. Liabilities in this category are classified as current liabilities if expected to be settled within
the next 12 months, otherwise they are classified as non-current.
Trade payables are obligations to pay for goods or services that have been acquired or received from suppliers in the ordinary
course of business. Loans are initially recognized at fair value, net of transaction costs incurred. Loans are subsequently
carried at amortized cost; any difference between the funds received (net of transaction costs) and the settlement value is
recognized in the consolidated statement of income over the term of the loan using the effective interest method.
Derecognition of financial liabilities
The Company derecognizes financial liabilities if, and only if, the obligations of the Company are fulfilled, cancelled or have
expired. The difference between the carrying amount of the derecognized financial liability and the consideration paid and
payable is recognized in profit or loss.
Additionally, when the Company carries out a refinancing transaction and the previous liability qualifies to be derecog-
nized, the costs incurred in the refinancing are recognized immediately in profit or loss at the date of termination of the
previous financial liability.
Offsetting financial assets and liabilities
Assets and liabilities are offset and the net amount is presented in the consolidated statement of financial position when
the right to offset the recognized amounts is legally enforceable and there is an intention to settle on a net basis or to
realize the asset and settle the liability simultaneously.
g) Derivative financial instruments and hedging activities
All derivative financial instruments are identified and classified as fair value hedges or cash flow hedges, for trading or the
hedging of market risks and are recognized in the consolidated statement of financial position as assets and/or liabilities at fair
value and similarly measured subsequently at fair value. The fair value is determined based on recognized market prices and
its fair value is determined using valuation techniques accepted in the financial sector.
The fair value of hedging derivatives is classified as a non-current asset or liability if the remaining maturity of the hedged item
is more than 12 months and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.
Derivative financial instruments classified as hedges are contracted for risk hedging purposes and meet all hedging require-
ments; their designation at the beginning of the hedging operation is documented, describing the objective, primary position,
risks to be hedged and the effectiveness of the hedging relationship, characteristics, accounting recognition and how the
effectiveness is to be measured.
Cash flow hedges
The changes in the fair value of derivative instruments associated to cash flow hedges are recorded in stockholders' equity. The
effective portion is temporarily recorded in comprehensive income, within stockholders' equity and is reclassified to profit or
loss when the hedged position affects these. The ineffective portion is immediately recorded in income.
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Net investment hedge in a foreign transaction
The Company applies the hedge accounting to currency risk arising from its investments in foreign transactions for variations
in exchange rates arising between the functional currency of such transaction and the functional currency of the holding
entity, regardless of whether the investment is maintained directly or through a sub-holding entity. Variation in exchange rates
is recognized in the other items of comprehensive income as part of the translation effect, when the foreign transaction is
consolidated.
To this end, the Company designates the debt denominated in a foreign currency as a hedging instrument; therefore, the
exchange rate effects caused by the debt are recognized in other components of comprehensive income, on the translation
effects line item, to the extent that the hedge is effective. When the hedge is not effective, exchange differences are recognized
in profit or loss.
Suspension of hedge accounting
The Company suspends hedge accounting when the derivative financial instrument or the non-derivative financial instrument
has expired, is cancelled or exercised, when the derivative or non-derivative financial instrument is not highly effective to offset
the changes in the fair value or cash flows of the hedged item. The replacement or successive renewal of a hedging instrument
for another one is not an expiration or resolution if such replacement or renewal is part of the Company's documented risk
management objective, and it is consistent with this.
On suspending hedge accounting, in the case of fair value hedges, the adjustment to the carrying amount of a hedged amount
for which the effective interest rate method is used, is amortized to income over the period to maturity. In the case of cash
flow hedges, the amounts accumulated in equity as a part of comprehensive income remain in equity until the time when the
effects of the forecasted transaction affect income. In the event the forecasted transaction is not likely to occur, the income
or loss accumulated in comprehensive income are immediately recognized in the consolidated statement of income. When the
hedge of a forecasted transaction appears satisfactory and subsequently does not meet the effectiveness test, the cumulative
effects in comprehensive income in stockholders' equity are transferred proportionally to the consolidated statement of in-
come, to the extent the forecasted transaction impacts it.
The fair value of derivative financial instruments reflected in the consolidated financial statements of the Company is a mathe-
matical approximation of their fair value. It is computed using proprietary models of independent third parties using assump-
tions based on past and present market conditions and future expectations at the closing date.
h) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the average cost method. The cost
of finished goods and work-in-progress includes cost of product design, raw materials, direct labor, other direct costs and
production overheads (based on normal operating capacity).
It excludes borrowing costs. The net realizable value is the estimated selling price in the normal course of business, less the ap-
plicable variable selling expenses. Costs of inventories include any gain or loss transferred from other comprehensive income
corresponding to raw material purchases that qualify as cash flow hedges.
i) Property, plant and equipment
Items of property, plant and equipment are recorded at cost less the accumulated depreciation and any accrued impairment
losses. The costs include expenses directly attributable to the asset acquisition.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
reliably measured. The carrying amount of the replaced part is derecognized. Repairs and maintenance are recognized in the
consolidated statement of income during the year they are incurred. Major improvements are depreciated over the remaining
useful life of the related asset.
When the Company carries out major repairs or maintenance of its property, plant and equipment assets, the cost is recognized
in the book value of the corresponding asset as a replacement, provided that the recognition criteria are met. The remaining
portion of any major repair or maintenance is derecognized. The Company subsequently depreciates the recognized cost in the
useful life assigned to it, based on its best estimate of useful life.
Depreciation is calculated using the straight-line method, considering separately each of the asset's components, except for
land, which is not subject to depreciation. The estimated useful lives of the classes of assets are as follows:
Buildings and constructions
40 to 50 years
Machinery and equipment
10 to 40 years
Vehicles
15 years
Furniture and lab and IT equipment
2 to 13 years
Other
20 years
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The spare parts to be used after one year and attributable to specific machinery are classified as property, plant and equip-
ment in other fixed assets.
Borrowing costs related to financing of property, plant and equipment whose acquisition or construction requires a substantial
period (nine months), are capitalized as part of the cost of acquiring such qualifying assets, up to the moment when they are
suitable for their intended use or sale.
Assets classified as property, plant and equipment are subject to impairment tests when events or circumstances occur indi-
cating that the carrying amount of the assets may not be recoverable. An impairment loss is recognized in the consolidated
statement of income in other expenses, net, for the amount by which the carrying amount of the asset exceeds its recoverable
amount. The recoverable amount is the higher of fair value less costs to sell and value in use.
The residual value and useful lives of assets are reviewed at least at the end of each reporting period and, if expectations differ
from previous estimates, the changes are accounted for as a change in accounting estimate.
Gains and losses on disposal of assets are determined by comparing the sale value with the carrying amount and are recog-
nized in other expenses, net, in the consolidated statement of income.
j) Leases
The Company as lessee
The Company evaluates whether a contract is or contains a lease agreement at inception of a contract. A lease is defined as
an agreement or part of an agreement that conveys the right to control the use of an identified asset for a period of time in
exchange for a consideration. The Company recognizes an asset for right-of-use and the corresponding lease liability, for all
lease agreements in which it acts as lessee, except in the following cases: short-term leases (defined as leases with a lease
term of less than 12 months); leases of low-value assets (defined as leases of assets with an individual market value of less than
US$5,000 (five thousand dollars)); and, lease agreements whose payments are variable (without any contractually defined fixed
payment). For these agreements, which exempt the recognition of an asset for right-of-use and a lease liability, the Company
recognizes the rent payments as an operating expense in a straight-line method over the lease period.
The right-of-use asset comprises all lease payments discounted at present value; the direct costs to obtain a lease; the advance
lease payments; and the obligations of dismantling or removal of assets. The Company depreciates the right-of-use asset over the
shorter of the lease term or the useful life of the underlying asset; therefore, when the lessee will exercise a purchase option, the
lessee shall depreciate the right-of-use asset from the commencement date to the end of the useful life of the underlying asset.
Depreciation begins on the lease commencement date.
The lease liability is initially measured at the present value of the future minimum lease payments that have not been paid at
that date, using a discount rate that reflects the cost of obtaining funds for an amount similar to the value of the lease pay-
ments, for the acquisition of the underlying asset, in the same currency and for a similar period to the corresponding contract
(incremental borrowing rate). When lease payments contain non-lease components (services), the Company has chosen, for
some class of assets, not to separate them and measure all payments as a single lease component; however, for the rest of the
class of assets, the Company measures the lease liability only considering lease payments, while all of the services implicit in
the payments, are recognized directly in the consolidated statement of income as operating expenses.
To determine the lease term, the Company considers the non-cancellable period, including the probability to exercise any right
to extend and/or terminate the lease term.
Subsequently, the lease liability is measured increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and reducing the carrying amount to reflect the lease payments made.
When there is a modification in future lease payments resulting from changes in an index or a rate used to determine those
payments, the Company remeasures the lease liability when the adjustment to the lease payments takes effect, without
reassessing the discount rate. However, if the modifications are related to the lease term or exercising a purchase option, the
Company reassesses the discount rate during the liability’s remeasurement. Any increase or decrease in the value of the lease
liability subsequent to this remeasurement is recognized as an adjustment to the right-of-use asset to the same extent.
Finally, the lease liability is derecognized when the Company fulfills all lease payments. When the Company determines that
it is probable that it will exercise an early termination of the contract that leads to a cash disbursement, such disbursement is
accounted as part of the liability’s remeasurement mentioned in the previous paragraph; however, in cases in which the early
termination does not involve a cash disbursement, the Company cancels the lease liability and the corresponding right-of-use
asset, recognizing the difference immediately in the consolidated statement of income.
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k) Intangible assets
Intangible assets are recognized in the consolidated statement of financial position when they meet the following conditions:
they are identifiable, provide future economic benefits and the Company has control over such benefits.
Intangible assets are classified as follows:
i. Indefinite useful life
These intangible assets are not amortized and are subject to annual impairment assessment. As of December 31, 2024, 2023
and 2022, no factors have been identified limiting the life of these intangible assets.
ii. Finite useful life
These assets are recognized at cost less the accumulated amortization and impairment losses recognized. They are amor-
tized on a straight-line basis over their estimated useful life, determined based on the expectation of generating future
economic benefits, and are subject to impairment tests when triggering events of impairment are identified.
Development costs
15.5 years
Non-compete agreements
5 to 10 years
Customer relationships
6 to 7 years
Patents
10 years
Software and licenses
3 to 7 years
Intellectual property
20 to 25 years
Defined life brands
5 to 22 years
Development costs
Research costs are recognized in income as incurred. Expenditures for development activities are recognized as intangible
assets when such costs can be reliably measured, the product or process is technically and commercially feasible, poten-
tial future economic benefits are obtained and the Company intends and also has sufficient resources to complete the
development and to use or sell the asset. Their amortization is recognized in income by the straight-line method over the
estimated useful life of the asset. Development expenditures that do not qualify for capitalization are recognized in income
as incurred.
Licenses
Licenses acquired in a separate transaction are recorded at acquisition cost, while those acquired in a business combination
are recognized at fair value at acquisition date.
Licenses that have a defined useful life are presented at cost less accumulated amortization. Amortization is recorded by
the straight-line method over its estimated useful life.
The acquisition of software licenses is capitalized based on the costs incurred to acquire and use the specific software.
Software development
Costs associated with the maintenance of software are recorded as expenses as incurred.
Development costs directly related with the design and tests of unique and identifiable software products controlled by the
Company are recorded as intangible assets when they fulfill the following criteria:
–
Technically, it is possible to complete the intangible asset so that it may be available for its use or sale;
–
The intangible asset is to be completed for use or sale;
–
The ability to use or sell the intangible asset;
–
The way in which the intangible asset is to generate probable future economic benefits;
–
The availability of adequate technical, financial or other type of resources, to complete the development and use or sell
the intangible asset; and
–
The ability to reliably calculate the disbursement attributable to the intangible asset during its development.
The amount initially recognized for an intangible asset generated internally will be the sum of disbursements incurred from
the moment the element fulfills the conditions for recording, as established above. When no intangible asset internally
generated may be recognized, the disbursements for development are charged to income in the period they are incurred.
l) Goodwill
Goodwill represents the excess of the acquisition cost of a subsidiary over the Company's equity in the fair value of the iden-
tifiable net assets acquired, determined at the date of acquisition, and is not subject to amortization. Goodwill is shown under
goodwill and intangible assets and is recognized at cost less accumulated impairment losses, which are not reversed. Gains or
losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
m) Impairment of non-financial assets
Assets that have an indefinite useful life, for example, goodwill, are not amortizable or depreciable and are subject to annual
impairment tests. Assets that are subject to amortization and depreciation are reviewed for impairment when events or changes
in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount
by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the asset's fair
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value less costs to sell and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels at
which separately identifiable cash flows exist (cash generating units). Non-financial long-term assets other than goodwill that
have suffered impairment are reviewed for possible reversal of the impairment at each reporting date.
When an impairment loss is reversed, the carrying amount of the asset or cash generating unit, is increased to the revised
estimated value of its recoverable amount, in such a way that the adjusted carrying amount does not exceed the carrying
amount that would have been determined if an impairment loss had not been recognized for that asset or cash generating unit
in previous years. The reversal of an impairment loss is recognized immediately in the consolidated statement of income.
n) Income tax
The amount of income taxes in the consolidated statement of income represents the sum of the current and deferred income
taxes.
The amount of income taxes included in the consolidated statement of income represents the current tax and the effects of
deferred income tax assets determined in each subsidiary by the asset and liability method, applying the rate established
by the legislation enacted or substantially enacted at the consolidated statement of financial position date, wherever the
Company operates and generates taxable income. The applicable rates are applied to the total temporary differences resulting
from comparing the accounting and tax bases of assets and liabilities, and that are expected to be applied when the deferred
tax asset is realized or the deferred tax liability is expected to be settled, considering, when applicable, any tax-loss carryfor-
wards, prior to the recovery analysis. The effect of the change in current tax rates is recognized in current income of the period
in which the rate change is determined.
Management periodically evaluates positions taken in tax returns with respect to situations in which the applicable law is
subject to interpretation. Provisions are recognized when appropriate, based on the amounts expected to be paid to the tax
authorities.
Deferred tax assets are recognized only when it is probable that future taxable profits will exist against which the deductions
for temporary differences can be taken.
The deferred income tax on temporary differences arising from investments in subsidiaries and associates is recognized, unless
the period of reversal of temporary differences is controlled by the Company and it is probable that the temporary differences
will not reverse in the near future.
Deferred tax assets and liabilities are offset when a legal right exists, and when the taxes are levied by the same tax authority.
o) Employee benefits
i. Pension plans
Defined contribution plans:
A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The
Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to
pay all employees the benefits relating to their service in the current and past periods. The contributions are recognized as
employee benefit expense on the date that is required the contribution.
Defined benefit plans:
A defined benefit plan is a plan, which specifies the amount of the pension an employee will receive on retirement, usually
dependent on one or more factors such as age, years of service and compensation.
The liability recognized in the consolidated statement of financial position in respect of defined benefit plans is the present
value of the defined benefit obligation at the consolidated statement of financial position date less the fair value of plan
assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit
method. The present value of the defined benefit obligation is determined by discounting the estimated future cash out-
flows using discount rates in conformity with IAS 19, Employee Benefits, that are denominated in the currency in which the
benefits will be paid and have maturities that approximate the terms of the pension liability.
Actuarial gains and losses from adjustments and changes in actuarial assumptions are recognized directly in other items of
the comprehensive income in the year they occur and will not be reclassified to the results of the period.
The Company determines the net finance expense (income) by applying the discount rate to the liabilities (assets) from net
defined benefits.
Past-service costs are recognized immediately in the consolidated statement of income.
ii. Post-employment medical benefits
The Company provides medical benefits to retired employees after termination of employment. The right to access these
benefits usually depends on the employee’s having worked until retirement age and completing a minimum of years of
service. The expected costs of these benefits are accrued over the period of employment using the same criteria as those
described for defined benefit pension plans.
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iii. Termination benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement date or
when an employee accepts voluntary termination of employment in exchange for these benefits. The Company recognizes
termination benefits in the first of the following dates: (a) when the Company can no longer withdraw the offer of these
benefits, and (b) when the Company recognizes the costs from restructuring within the scope of the IAS 37 and it involves
the payment of termination benefits. If there is an offer that promotes the termination of the employment relationship
voluntarily by employees, termination benefits are valued based on the number of employees expected to accept the offer.
The benefits that will be paid in the long term are discounted at their present value.
iv. Short-term benefits
The Company grants benefits to employees in the short term, which may include wages, salaries, annual compensation and
bonuses payable within 12 months. The Company recognizes an undiscounted provision when it is contractually obligated
or when past practice has created an obligation.
v. Employee participation in profit and bonuses
The Company recognizes a liability and an expense for bonuses and employee participation in profits when it has a legal
or assumed obligation to pay these benefits and determines the amount to be recognized based on the profit for the year
after certain adjustments.
p) Provisions
Provisions represent a present legal obligation or a constructive obligation as a result of past events where an outflow of
resources to meet the obligation is likely and where the amount has been reliably estimated. Provisions are not recognized for
future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-
tax rate that reflects current market assessments of the value of money over time and the risks specific to the obligation. The
increase in the provision due to the passage of time is recognized as interest expense.
When there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to
any one item included in the same class of obligations may be small.
A restructuring provision is recorded when the Company has developed a formal detailed plan for the restructure, and a valid
expectation for the restructure has been created between the people affected, possibly for having started the plan implemen-
tation or for having announced its main characteristics to them.
q) Share based payment
The Company's compensation plans are based 50% on the market value of the shares of its holding entity and the other 50%
on the market value of the shares of Alpek SAB, granted to certain senior executives of the Company and its subsidiaries. The
conditions for granting such compensation to the eligible executives include compliance with certain financial metrics such as
the level of profit achieved and remaining in the Company for up to 5 years, among other requirements. The Board of Directors
of Alfa has appointed a technical committee to manage the plan, and it reviews the estimated cash settlement of this compen-
sation at the end of the year. The payment plan is subject to the discretion of Alfa’s senior Management. Adjustments to this
estimate are charged or credited to the consolidated statement of income.
The fair value of the amount payable to employees in respect of share-based payments which are settled in cash is recognized
as an expense, with a corresponding increase in liabilities, over the period of service required. The liability is included within
other liabilities and is adjusted at each reporting date and the settlement date. Any change in the fair value of the liability is
recognized as compensation expense in the consolidated statement of income.
r) Capital stock
When treasury shares are repurchased, they are converted into treasury shares and the amount is charged to stockholders'
equity at their purchase price. These amounts are expressed at their historical value.
Alpek SAB's common shares are classified as capital stock within stockholders’ equity. Incremental costs directly attributable
to the issuance of new shares are included in equity as a reduction from the consideration received, net of tax.
s) Revenue recognition
Revenues comprise the fair value of the consideration received or to receive for the sale of goods and services in the ordinary
course of the transactions, and are presented in the consolidated statement of income, net of the amount of variable consid-
erations, which comprise the estimated amount of returns from customers, rebates and similar discounts and payments made
to customers with the objective that goods are accommodated in attractive and favorable spaces at their facilities.
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To recognize revenues from contracts with customers, the comprehensive model for revenue recognition is used, which is
based on a five-step approach consisting of the following: (1) identify the contract; (2) identify performance obligations in the
contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract;
and (5) recognize revenue when the Company satisfies a performance obligation.
i. Revenue from the sale of goods and products
Contracts with customers are formalized by commercial agreements complemented by purchase orders, whose costs com-
prise the promises to produce, distribute and deliver goods based on the contractual terms and conditions set forth, which
do not imply a significant judgment to be determined. When there are payments related to obtaining contracts, they are
capitalized and amortized over the term of the contract.
Performance obligations held by the Company are not separable, and are not partially satisfied, since they are satisfied at a
point in time, when the customer accepts the products. Moreover, the payment terms identified in most sources of revenue
are short-term, with variable considerations including discounts given to customers, without financing components or
guarantees. These discounts are recognized as a reduction in revenue; therefore, the allocation of the price is directly on
the performance obligations of production, distribution and delivery, including the effects of variable consideration.
The Company recognizes revenue at a point in time, when control of sold goods has been transferred to the customer,
which is given upon delivery of the goods promised to the customer according to the negotiated contractual terms. The
Company recognizes an account receivable when the performance obligations have been met, recognizing the correspond-
ing revenue; moreover, the considerations received before completing the performance obligations of production and
distribution are recognized as customer advances.
Dividend income from investments is recognized once the rights of stockholders to receive this payment have been estab-
lished (when it is probable that the economic benefits will flow to the Company and the revenue can be reliably determined).
t) Earnings per share
Earnings per share are calculated by dividing the profit attributable to the stockholders of the controlling interest by the
weighted average number of common shares outstanding during the year. As of December 31, 2024, 2023 and 2022, there are
no dilutive effects from financial instruments potentially convertible into shares.
u) Changes in accounting policies and disclosures
i. New standards and changes adopted
In the current year, the Company has applied a number of amendments to IFRS Accounting Standards issued by the IASB
that are mandatorily effective for an accounting period that begins on or after January 1, 2024. The conclusions related to
their adoption are described as follows:
Amendments to IFRS 16 — Lease Liability in a Sale and Leaseback
In September 2022, the IASB issued amendments to IFRS 16, adding subsequent measurement requirements for sale and
leaseback transactions that satisfy the requirements in IFRS 15 Revenue from Contracts with Customers to be accounted for
as a sale. The amendments require the seller-lessee to determine ‘lease payments’ or ‘revised lease payments’ such that the
seller-lessee does not recognize a gain or loss that relates to the right of use retained by the seller-lessee, after the commence-
ment date.
The amendments do not affect the gain or loss recognized by the seller-lessee relating to the partial or full termination of
a lease. Without these new requirements, a seller-lessee may have recognized a gain on the right of use it retains solely
because of a remeasurement of the lease liability (for example, following a lease modification or change in the lease term)
applying the general requirements in IFRS 16. This could have been particularly the case in a leaseback that includes vari-
able lease payments that do not depend on an index or rate.
As part of the amendments, the IASB amended an Illustrative Example in IFRS 16 and added a new example to illustrate the
subsequent measurement of a right-of-use asset and lease liability in a sale and leaseback transaction with variable lease
payments that do not depend on an index or rate. The illustrative examples also clarify that the liability that arises from a
sale and leaseback transaction that qualifies as a sale applying IFRS 15 is a lease liability.
A seller-lessee applies the amendments retrospectively in accordance with IAS 8 to sale and leaseback transactions entered
into after the date of initial application, which is defined as the beginning of the annual reporting period in which the entity
first applied IFRS 16.
The Company evaluated the amendments to IFRS 16 and determined that the implementation of these amendments had
no effect on its financial information, since it does not have any sale and leaseback transactions.
Amendments to IAS 7 and IFRS 7 - Supplier Finance Arrangements
In May 2023, the IASB issued amendments to IAS 7 and IFRS 7 to clarify the characteristics of supplier financing arrange-
ments and require additional disclosures about such arrangements.
The amendments add a disclosure objective to IAS 7 stating that an entity is required to disclose information about its
supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on
the entity’s liabilities and cash flows. In addition, IFRS 7 is amended to add supplier finance arrangements as an example
within the requirements to disclose information about an entity’s exposure to concentration of liquidity risk.
The amendments contain specific transition provisions for the first annual reporting period in which the Company applies
the amendments.
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The Company applied these amendments to disclose the impact on its liabilities and cash flows, specifically addressing
liquidity risk and associated risk management in Note 4 to its consolidated financial statements.
Amendments to IAS 1 - Classification of Liabilities as Current or Non-current
In January 2020 and November 2022, the IASB issued amendments to IAS 1 to specify the requirements for classifying
liabilities as current or non-current and the classification of debt with covenants.
The amendments affect the presentation of liabilities as current or non-current in the statement of financial position and
not the amount or timing of recognition of assets, liabilities, income or expenses, or the information disclosed about those
items.
The amendments seeks to clarify that liabilities are classified as current or non-current based on rights that exists at the
end of the reporting period and that classification is unaffected by the entity’s expectations to defer settlement of a liability,
explains that rights exist if covenants are met at the end of the reporting period, and introduces a definition of ‘settlement’
to clarify that it refers to the transfer of cash, equity instruments, or other assets or services to the counterparty.
The amendments also specify that only covenants that an entity must meet at or after the end of the reporting period
affect the entity's right to defer settlement of a liability for at least twelve months after the reporting date (and should be
considered in assessing the liability's classification as current or non-current). Such covenants affect whether the right
exists at the end of the reporting period, even if compliance with the covenant is assessed after the reporting date.
The Company evaluated the amendments to IAS 1 and reviewed the classification of its liabilities as necessary to reclassify
between current and non-current and did not identify that these amendments to IAS 1 affected its current accounting pol-
icies applicable to its financial information, since it already classifies its liabilities according to contractual terms, without
considering future refinancing plans defined in its liquidity financial risk management strategy.
Amendments to IAS 1 – Non-current Liabilities with Covenants
The IASB also specifies that the right to defer settlement of a liability for at least twelve months after the reporting date is
not affected if an entity is only required to comply with the covenant after the reporting date. However, if the entity’s right to
defer payment of a liability is subject to compliance with covenants within twelve months after the reporting date, it should
disclose information that enables users of financial statements to understand the risk of the liabilities becoming repayable
within twelve months after the reporting period. This would include information about the covenants (including the nature
of the covenants and when the entity is required to comply with them), the carrying amount of the related liabilities, and
the facts and circumstances, if any, that indicate that the entity may have problems complying with the covenants.
The Company evaluated the amendments to IAS 1 and classifies liabilities as current or non-current based on what is
expected to occur at the end of the period and discloses information about its covenants in Note 16 to its consolidated
financial statements.
ii. New, revised and issued IFRS, but not yet effective
As of the date of these consolidated financial statements, the Company had not applied the following amendments to the
IFRS that have been issued, but are not yet effective, and the adoption of these amendments, except for IFRS 18, is not
expected to have a material impact on the consolidated financial statements in future periods, considering that they are
not of significant applicability. The amendments to the IFRS are included below:
•
Amendments to IAS 21– Lack of Exchangeability (1)
•
Amendments to IFRS 7 and IFRS 9 - Classification and Measurement of Financial Instruments (2)
•
Amendments to IFRS 7 and IFRS 9 – Nature-dependent Electricity Contracts (2)
•
IFRS 19 – Subsidiaries without Public Accountability: Disclosures (3)
(1) Effective for annual periods beginning on or after January 1, 2025.
(2) Effective for annual periods beginning on or after January 1, 2026.
(3) Effective for annual periods beginning on or after January 1, 2027.
IFRS 18 – Presentation and Disclosure in Financial Statements
IFRS 18 replaces IAS 1, carrying forward many of the requirements in IAS 1 unchanged and complementing them with new
requirements. In addition, some IAS 1 paragraphs have been moved to IAS 8 and IFRS 7. Furthermore, the IASB has made
minor amendments to IAS 7 and IAS 33.
IFRS 18 introduces new requirements to:
•
Present specified categories and defined subtotals in the statement of profit or loss
•
Provide disclosures on management-defined performance measures (MPMs) in the notes to the financial statements
•
Improve aggregation and disaggregation
The IFRS 18 is effective for annual periods beginning on or after 1 January 2027. Early adoption is permitted. The amend-
ments to IAS 7, IAS 33, IAS 8 and IFRS 7 are effective when an entity first adopts IFRS 18. An entity is required to apply IFRS
18 retrospectively by applying the temporary specific terms.
The Company is conducting an analysis to determine the applicable amendments to the presentation of the consolidated
income statement and the consolidated statement of cash flows, and to identify the MPMs to be disclosed within its con-
solidated financial statements.
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4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Company’s activities expose it to various financial risks: market risk (including exchange rate risk, price risk and interest rate
variation risk), credit risk and liquidity risk.
The Company has a general risk management program focused on the unpredictability of financial markets and seeks to minimize
the potential adverse effects on its financial performance.
The objective of the risk management program is to protect the financial health of its business, taking into account the volatility
associated with foreign exchange and interest rates. Sometimes, the Company uses derivative financial instruments to hedge
certain exposures to risks. In addition, due to the nature of the industries in which it participates, the Company has performed
hedges of input prices with derivative financial instruments.
Alfa has a Risk Management Committee (“RMC”), comprised of the Board’s Chairman, the Chief Executive Officer, Chief Financial
Officer and a Risk Management Officer acting as technical secretary. The RMC reviews derivative transactions proposed by the
subsidiaries of Alfa, including Alpek, in which a potential loss analysis surpasses US$1. This Committee supports both the CEO and
the President of Board of Alfa. All new derivative transactions which the Company proposes to enter into, as well as the renewal
or cancellation of derivative arrangements, must be approved by both Alpek’s and Alfa’s CEO, according to the following schedule
of authorizations:
Maximum possible loss US$1
Individual transaction
Annual cumulative transactions
Chief Executive Officer of the Company
1
5
Risk Management Committee of Alfa
30
100
Finance Committee
100
300
Board of Directors of Alfa
>100
>300
The proposed transactions must meet certain criteria, including that the hedges are lower than established risk parameters, that
they are the result of a detailed analysis and are properly documented.
In addition, sensitivity analysis and other risk analyses should be performed and documented prior to the operation.
Alfa's risk management policy indicates that hedging positions should always be less than the projected exposure to allow an
acceptable margin of uncertainty. Exposed transactions are expressly prohibited. The Company’s policy indicates that the further
the exposure is, the lower the coverage, based on the following table:
Maximum coverage (as a percentage of the projected exposure)
Current year
Commodities
100
Energy costs
75
Exchange rate for operating transactions
80
Exchange rate for financial transactions
100
Interest rates
100
Capital management
The Company’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can continue
to provide returns to stockholders and benefits to other stakeholders, as well as maintaining an optimal capital structure to reduce
the cost of capital.
To maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to stockholders, return equity
to stockholders, issue new shares or sell assets to reduce debt.
Alpek reviews capital based on a leverage ratio. This percentage is calculated by dividing total liabilities by total stockholders’
equity.
The financial ratio of total liabilities/total equity was 2.48, 2.09 and 1.62 as of December 31, 2024, 2023 and 2022, respectively,
resulting in a leverage ratio that meets the Company’s management and risk policies.
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Financial instruments by category
The following are the Company’s financial instruments by category.
As of December 31, 2024, 2023 and 2022, financial assets and liabilities consist of the following:
As of December 31,
2024
2023
2022
Cash and cash equivalents
$
6,216
$
7,391
$
6,319
Restricted cash
386
322
553
Financial assets measured at amortized cost:
Trade and other accounts receivable
14,481
13,236
19,669
Other non-current assets
3,763
3,140
3,960
Financial assets measured at fair value through profit or loss
Derivate financial instruments (1)
14
95
10
$
24,860
$
24,184
$
30,511
Financial liabilities measured at amortized cost:
Debt
$
40,570
$
33,337
$
39,081
Trade and other accounts payable
29,529
25,995
30,505
Lease liability
4,104
3,456
3,624
Financial liabilities measured at fair value:
Derivative financial instruments (1)
839
265
1,241
$
75,042
$
63,053
$
74,451
(1) The Company designated the derivative financial instruments that comprise this balance as accounting hedges, in accordance with what is de-
scribed later in this note.
Fair value of financial assets and liabilities valued at amortized cost
The amount of cash and cash equivalents, restricted cash, trade and other accounts receivable, other current assets, trade and
other accounts payable, current debt and other current liabilities approximate their fair value, due to their short maturity. The net
carrying amount of these accounts represents the expected cash flows to be received as of December 31, 2024, 2023 and 2022.
The carrying amount and estimated fair value of assets and liabilities valued at amortized cost is presented below:
As of December 31, 2024
As of December 31, 2023
As of December 31, 2022
Carrying amount
Fair value
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets:
Non-current accounts receivable
$
3,148
$
3,148
$
2,456
$
2,453
$
3,344
$
3,339
Financial liabilities:
Non-current debt
38,956
36,277
32,702
30,484
37,344
34,519
The carrying amount of the debt, for the purpose of computing its fair value, is presented gross of interest payable and issuance
costs.
The estimated fair values as of December 31, 2024, 2023, and 2022, of the Senior Notes are based on quoted prices (unadjusted) in
active markets for identical assets or liabilities; therefore, they have been classified within Level 1 of the fair value measurement hi-
erarchy. On the other hand, the estimated fair value of bank loans as of December 31, 2024, 2023, and 2022, was determined based
on discounted cash flows, using the Interbank Equilibrium Interest Rate (“TIIE”) for instruments in pesos, the Secured Overnight
Financing Rate (“SOFR”) for term instruments in U.S. dollars, and the Euro Interbank Offered Rate (“Euribor”) for instruments in
euros. The fair value measurement of bank loans is considered within Level 2 of the fair value hierarchy. Measurement at fair value
for non-current accounts receivable is deemed within Level 3 of the fair value hierarchy.
Market risks
(i) Exchange rate risk
The Company is exposed to foreign exchange risk, primarily derived from the transactions and balances that the subsidiaries
conduct and have in foreign currency, respectively. A foreign currency is that which is different from the functional currency of
an entity. In addition, the Company is exposed to changes in the value of foreign investments (subsidiary entities that have a
functional currency different from that of the ultimate holding company), which arise from changes in the exchange rates be-
tween the functional currency of the foreign operation and the functional currency of the holding company (pesos); therefore,
the Company applies hedge accounting to mitigate this risk, designating financial liabilities as hedging instruments, regardless
of whether the foreign investment is directly or indirectly maintained through a subholding.
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The behavior of the exchange rates fluctuations between the Mexican peso, U.S. dollar and the euro represents an important
factor for the Company due to the effect that such currencies have on its consolidated results, and because, in addition, Alpek
has no interference in its determination. Historically, in certain times when the Mexican peso has appreciated against other
currencies, such as the U.S. dollar, the Company’s profit margins have been reduced. On the other hand, when the Mexican
peso has lost value, Alpek’s profit margins have been increased. However, there is no assurance that this correlation will be
repeated in case the exchange rate between the Mexican peso and any other currency fluctuates again, because these effects
also depend on the balances in foreign currency that the entities of the Company hold.
Accordingly, the Company sometimes enters into derivative financial instruments in order to keep under control the integrated
total cost of its financing and the volatility associated with exchange rates. Additionally, as most of the Company’ revenues are
in U.S. dollars, there is a natural hedge against its obligations in U.S. dollars.
The Company has the following assets and liabilities in foreign currency in relation to the functional currency of the subsidiary
entities, translated to millions of Mexican pesos at the closing exchange rate as of December 31, 2024:
MXN
USD
EUR
Financial assets
$
28,830
$
2,594
$
1,094
Financial liabilities
(28,977)
(11,823)
(359)
Foreign exchange financial position
$
(147)
$
(9,229)
$
735
The exchange rates used to translate the foreign currency financial positions to Mexican pesos are those described in Note 3c.
Based on the financial positions in foreign currency maintained by the Company, a hypothetical variation of 10% in the MXN/
USD and MXN/EUR exchange rate and keeping all other variables constant, would result in an effect of $864 on the consoli-
dated statement of income and consolidated stockholders' equity.
Financial instruments to hedge net investments in foreign transactions
The Company designated certain non-current debt instruments as hedging instruments to net investments in foreign transac-
tions, in order to mitigate the variations in exchange rates arising between the functional currency for such transactions and
the functional currency of the holding or sub-holding company that maintains these investments.
The Company formally designated and documented each hedging relationship establishing objectives, strategy to hedge the
risk, the identification of the hedging instrument, the hedged item, the nature of the risk to be hedged, and the methodology
to assess the effectiveness. Given that the exchange rate hedging relationship is clear, the method that the Company used
to assess the effectiveness consisted of a qualitative effectiveness test by comparing the critical terms between the hedging
instruments and the hedged items.
The hedge will be effective as long as the notional debt designated as a hedging instrument is equal to or less than the value
of the net assets of the covered foreign operation. On the other hand, when the value of the net assets of the foreign operation
is less than the notional value of the designated debt, the Company rebalances the hedging relationship and recognizes the
ineffectiveness in the income statement.
As of December 31, 2024, 2023 and 2022, Alpek maintains the following hedging relationships:
As of December 31, 2024
Holding
Functional
Currency
Hedging Instrument
Notional Value
Hedged Item
Net assets of the
hedged item
Alpek SAB
MXN
Bank loan
US$
200
Indelpro
US$
214
Bank loan
96
Temex
82
Senior Notes 144A fixed rate
22
Alpek Polyester Ms
239
Senior Notes 144A fixed rate
100
Alpek Polyester México
12
Akra Polyester
107
US$
418
US$
654
As of December 31, 2023
Holding
Functional
Currency
Hedging Instrument
Notional Value
Hedged Item
Net assets of the
hedged item
Alpek SAB
MXN
Bank loan
US$
200
Indelpro
US$
254
Bank loan
100
Temex
22
Senior Notes 144A fixed rate
22
Alpek Polyester Ms
251
Senior Notes 144A fixed rate
100
Alpek Polyester México
95
Akra Polyester
120
US$
422
US$
742
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As of December 31, 2022
Holding
Functional
Currency
Hedging Instrument
Notional Value
Hedged Item
Net assets of the
hedged item
Alpek SAB
MXN
Senior Notes 144A fixed rate
US$
-
Indelpro
US$
240
Senior Notes 144A fixed rate
300
Temex
68
Senior Notes 144A fixed rate
22
Alpek Polyester Ms
232
Senior Notes 144A fixed rate
100
Alpek Polyester México
82
Akra Polyester
195
US$
422
US$
817
For the years ended December 31, 2024, 2023 and 2022, the Company’s average hedging ratio amounted to 57.9%, 56.3%,
and 48.9%, respectively. Therefore, the exchange rate fluctuation generated by the hedging instruments for the years ended
December 31, 2024, 2023 and 2022 amounted to a net (loss) gain of $(1,325), $873, and $545, respectively, which was recognized
in other comprehensive income, offsetting the translation effect generated by each foreign investment. The hedging effective-
ness results confirm that the hedging relationships are highly effective due to the economic relationship between the hedging
instrument and the hedged items.
Derivative financial instruments to hedge exchange rate risks
As of December 31, 2023 and 2022, the Company holds forwards (EUR/USD) and during 2023 contracted forwards (GBP/USD),
to hedge different needs. For 2023 and 2022, these forwards are mirrored to an entity with the functional currency of pound
sterling (GBP), because part of its revenue is received in euros and part of its purchases are made in US dollars. Therefore, a
highly probable forecasted transaction related to budgeted sales and purchases in each corresponding currency has been
documented as a hedged item. As of December 31, 2024, these hedges expired naturally.
For accounting purposes, the Company has designated such forwards as cash flow hedging relationships to hedge the afore-
mentioned items, and has formally documented these relationships, setting the objectives, management's strategy to hedge
the risk, identification of hedging instruments, hedged items, the nature of the risk to be hedged and the methodology of the
effectiveness assessment.
The conditions of the derivative financial instruments and the considerations of their valuation as hedging instruments are
mentioned below:
Forwards EUR/USD
Characteristics
2023
2023
2022
Currency
GBP
EUR
EUR
Notional amount
10
29
24
Strike (average)
1.2639
1.0877
1.0738
Maturity
Monthly through
December 30,
2024
Monthly through
December 30,
2024
Monthly through
December 30,
2023
Carrying amount
$(0)
$(8)
$(2)
Change in the fair value to measure ineffectiveness
$(2)
$(10)
$1.6
Reclassification from OCI to profit or loss
-
-
-
Recognized in OCI, net of reclassifications
$(0)
$(8)
$(2.3)
Change in the fair value of the hedged item to measure ineffectiveness
$2
$10
$(1.6)
Change in the fair value of the forward
$(0)
$(5.7)
$(18.8)
As of December 31, 2023 and 2022, the Company held EUR/USD forwards that were contracted with the objective of reduc-
ing transaction costs; therefore, for accounting purposes and for hedge evaluation, derivatives are divided into synthetic
derivatives to hedge each hedged item individually (revenue in euros and purchases in dollars). During 2023, the Company
also contracted EUR/GBP forwards directly for this same hedging relationship. The Company determined that they are highly
effective according to the characteristics and modeling of both hedged items, resulting in 99% effectiveness for 2023, and
2022. Furthermore, both the credit profile of the Company and the counterparty are adequate and are not expected to change
in the medium term, so the credit risk component is not considered to dominate the hedging relationship.
In accordance with the reference amounts described and the way in which the flows of the derivatives are exchanged, the
average coverage ratio for the EUR/USD and GBP/USD exchange rate for 2023 is 68%, and for 2022 is 25%.
The source of ineffectiveness may be caused by the difference in the settlement date of the derivative and the hedged item,
and that the expected amount becomes a lower amount than the hedging instruments, as well as the credit risk. For the years
ended December 31, 2023 and 2022, no ineffectiveness was recognized in profit or loss.
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(ii) Price risk
In carrying out its activities, the Company depends on the supply of raw materials provided by its suppliers, both in México
and abroad, among which are intermediate petrochemicals, principally.
In recent years, the price of certain inputs has shown volatility, especially those related to oil and natural gas.
In order to fix the selling prices of certain of its products, the Company has entered into agreements with certain customers.
At the same time, it has entered into transactions involving derivatives on natural gas that seek to reduce price volatility of the
prices of this input.
Additionally, the Company has entered into derivative financial instruments transactions to hedge purchases of certain raw
materials, since these inputs have a direct or indirect relationship with the prices of its products.
The derivative financial operations have been privately contracted with various financial institutions, whose financial strength
was highly rated at the time by rating agencies. The documentation used to formalize the contract operations is that based
generally on the "Master Agreement", generated by the "International Swaps & Derivatives Association" ("ISDA"), which is accom-
panied by various accessory documents known in generic terms as "Schedule", "Credit Support Appendix" and "Confirmation".
Regarding natural gas, Pemex is the only supplier in México. The selling price of natural gas is determined based by the price
of that product on the “spot” market in South Texas, USA, which has experienced volatility. For its part, the Mexican Electric
Commission is a decentralized public company in charge of producing and distributing electricity in México. Electricity rates
have also been influenced by the volatility of natural gas, since most power plants are gas-based.
The Company entered into various derivative agreements with various counterparties to protect it against increases in prices
of natural gas and other raw materials. In the case of natural gas derivatives, hedging strategies for products were designed
to mitigate the impact of potential increases in prices. The purpose is to protect the price from volatility by taking positions
that provide stable cash flow expectations, and thus avoid price uncertainty. The reference market price for natural gas is the
Henry Hub New York Mercantile Exchange (NYMEX).
The average price in US dollars per MMBTU for 2024, 2023 and 2022 was $2.2, $2.5, and $6.4, respectively.
As of December 31, 2024, 2023 and 2022, the Company had hedges of natural gas prices for a portion expected of consumption
needs in México and the United States.
Derivative contracts to hedge adverse changes in commodity prices
The Company uses natural gas to operate, as well as some of its main raw materials are paraxylene, ethylene and monoeth-
ylene glycol (MEG). Therefore, an increase in the prices of natural gas, paraxylene, ethylene, monoethylene glycol (MEG), or
propylene, would have negative effects on the cash flow of the operation. The objective of the Company's designated hedge
is to mitigate against exposure to price increases of the aforementioned generic goods for future purchases, by contracting
swaps where a variable price is received and a fixed price is paid. In the case of PET, the Company uses these derivatives to
hedge sales related to this asset. The Company has implemented strategies called roll-over, through which it analyzes monthly
if more derivatives are contracted to expand the time or amount of coverage; currently, coverage contracted until December
2026 is maintained. Commodity derivatives are mirrored to Alpek Polyester USA, Alpek Polyester Mexico, Alpek Polyester Brazil
and Alpek Polyester UK, since the risk is in these entities and the derivative instruments are contracted by Alpek Polyester; this
process is carried out through the formalization of internal derivatives in order to apply hedge accounting.
These derivative financial instruments have been classified as cash flow hedges for accounting purposes. In this sense, man-
agement has documented, as a hedged item, a highly probable transaction in relation to the budget for purchases of these
commodities. The conditions of the derivative financial instruments and the considerations of their valuation as hedging
instruments are mentioned below:
As of December 31, 2024
Characteristics
Natural Gas Swaps
Paraxylene Swaps
MEG Swaps
Total notional
29,262,179
308,220
63,157
Units
MMBtu
MT
MT
Price received
Fair value
Fair value
Fair value
Price paid (average)
$3.9/MMBtu
$952/MT
$554/MT
Maturity (monthly)
December 2026
January 2026
January 2026
Net position of the swap (1)
(204)
(634)
14
Ineffectiveness recognized in the statement of income
-
-
-
Change in the fair value to measure ineffectiveness
(180)
(655)
5
Reclassification from OCI to profit or loss
-
(78)
6
Balance recognized in OCI, net of reclassifications
(204)
(556)
8
Change in the fair value to measure ineffectiveness of hedge item
181
656
(6)
Effectiveness test results
99.74%
99.79%
99.80%
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As of December 31, 2023
Characteristics
Natural Gas
Swaps
Paraxylene
Swaps
MEG
Swaps
Ethylene
Swaps
Propylene
Swaps
Total notional
24,042,090
277,280
157,474
3,304,623
3,261,920
Units
MMBtu
MT
MT
LB
LB
Price received
Fair value
Fair value
Fair value
Fair value
Fair value
Price paid (average)
$3.9/MMBtu
$1,019/MT
$520/MT
$.19/LB
$.43/LB
Maturity (monthly)
January 2025 January 2025 January 2025 January 2024
August 2024
Net position of the swap (1)
$(200)
$28
$8
$1
$2
Ineffectiveness recognized in the statement of income
-
-
-
-
-
Change in the fair value to measure ineffectiveness
(189)
36
26
-
-
Reclassification from OCI to profit or loss
-
4
(16)
1
-
Balance recognized in OCI, net of reclassifications
(200)
24
24
-
2
Change in the fair value to measure ineffectiveness of
hedge item
190
(36)
(26)
-
-
Effectiveness test results
99.92%
99.89%
99.89%
99.92%
99.93%
As of December 31, 2022
Characteristics
Natural Gas Swaps
Paraxylene Swaps
MEG Swaps
Total notional
70,973,855
272,650
136,350
Units
MMBtu
MT
MT
Price received
Fair value
Fair value
Fair value
Price paid (average)
$4.43/MMBtu
$970/MT
$586/MT
Maturity (monthly)
December 2024
January 2024
January 2024
Net position of the swap (1)
$(950.3)
$(140.8)
$(137.6)
Ineffectiveness recognized in the statement of income
-
-
-
Change in the fair value to measure ineffectiveness
(1,086.2)
(219.1)
(213.8)
Reclassification from OCI to profit or loss
-
31.2
(49.6)
Balance recognized in OCI, net of reclassifications
(950.3)
(172.0)
(88.1)
Change in the fair value to measure ineffectiveness of hedge item
1,086.5
219.3
213.9
Effectiveness test results
99.97%
99.92%
99.92%
(1)
Due to the high volume of operations, the net position of derivative financial instruments is presented; however, since these instruments do
not meet the criteria for the offsetting of financial instruments, they are presented in their gross amounts in the consolidated statement of
financial position.
The change in the fair value of the derivative financial instruments recognized in OCI for the year ended December 31, 2024,
2023 and 2022 is $(596), $1,056, and $(1,182), respectively.
The fair value of the derivate financial instruments according to their classification in the consolidated statement of financial
position is as follows:
As of December 31, 2024
Asset
Liability
Total
Natural Gas
$
-
$
(204)
$
(204)
Paraxylene
-
(634)
(634)
MEG/Ethylene
15
(1)
14
Total
$
15
$
(839)
$
(824)
As of December 31, 2023
Asset
Liability
Total
Natural Gas
$
-
$
(200)
$
(200)
Paraxylene
54
(26)
28
Propylene
2
-
2
MEG/Ethylene
36
(27)
9
Forward
3
(12)
(9)
Total
$
95
$
(265)
$
(170)
As of December 31, 2022
Asset
Liability
Total
Natural Gas
$
-
$
(950)
$
(950)
Paraxylene
10
(151)
(141)
MEG
-
(138)
(138)
Forward
-
(2)
(2)
Total
$
10
$
(1,241)
$
(1,231)
With the reference amounts of these derivative financial instruments, the Company offsets the fluctuation of the prices of
these commodities that are used as raw material in the production processes of the entities.
For commodity hedging relationships, management is designating as a hedged item a specific risk, which is defined by the
underlying assets that are clearly determined that the risk component is separable, it can be reliably measured and is also
highly correlated.
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On the other hand, in the measurement of the effectiveness of these hedges, the Company determined that they are highly
effective because the changes in the fair value and cash flows of each hedged item are compensated within the range of
effectiveness established by management. Due to the results shown on the effectiveness tests, it is confirmed that there is an
economic relationship between the hedging instruments and the hedged item. The method used by the Company is to offset
cash flows using a hypothetical derivative, which consists of comparing the changes in the fair value of the hedging instrument
with the changes in the fair value of the hypothetical derivative that would result in a perfect hedge.
As of December 31, 2024, according to the reference amounts described and the way in which the flows of the derivatives are
exchanged, the average coverage ratio for the natural gas, paraxylene, ethylene and ethane, PTA and PET for 2024, 2023 and
2022 are shown below and, if necessary, a rebalancing will be done to maintain this relationship for the strategy.
Average coverage ratio
2024
2023
2022
Natural gas
20%
17%
29%
Paraxylene
61%
46%
45%
Ethylene/MEG
18%
32%
37%
Propylene
-
25%
-
The source of ineffectiveness can be caused mainly by the difference in the settlement date of the hedging instruments and
the hedged items, and that the budget becomes less than the hedging instruments. For the years ended December 31, 2024,
2023 and 2022, there was no ineffectiveness recognized in profit or loss.
(iii) Interest rate risk
The Company is exposed to interest rate risk mainly for long-term loans bearing interest at variable rates. Fixed-interest loans
expose the Company to interest rate risk at fair value, which reflects that Alpek might be paying interest at rates significantly
different from those of an observable market.
As of December 31, 2024, 57% of the financing is denominated at a fixed rate, and 43% at a variable rate.
As of December 31, 2024, if interest rates on variable rate loans are increased or decreased by 100 basis points in relation to
the rate in effect, the income and stockholders’ equity of the Company would change by $391.
Credit risk
Credit risk represents the potential loss due to non-compliance of counterparts in their payment obligations. Credit risk is
generated from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions
as well as credit exposure to customers, including receivables and committed transactions.
The Company determines, from a business standpoint and credit risk profile, the significant customers with whom it maintains
an account receivable, distinguishing those that require an individual credit risk assessment. For the rest of the customers, the
company carries out its classification according to the type of market in which they operate (domestic or foreign), according
with the business and internal risk administration. Each subsidiary is responsible for managing and analyzing credit risk for
each of its new customers before setting the terms and conditions of payment. If wholesale customers are rated independent,
these are the ratings used. If there is no independent rating, the Company’s risk control group evaluates the creditworthiness
of the customer, taking into account their financial position, past experience and other factors. The maximum exposure to
credit risk is given by the balances of these items as presented in the consolidated state of financial position.
Individual risk limits are determined based on internal and external ratings in accordance with limits set by the Board of
Directors. The use of credit risk is monitored regularly. Sales to retail customers are in cash or by credit card. During the years
ended December 31, 2024, 2023 and 2022, credit limits were not exceeded.
In addition, the Company performs a qualitative evaluation of economic projections, with the purpose of determining the
possible impact on probabilities of default and the rate of recovery that it assigns to its clients.
During the year ended December 31, 2024, there have been no changes in the techniques of estimation or assumption.
Liquidity risk
Projected cash flows are determined at each operating entity of the Company and subsequently the finance department
consolidates this information. The finance department of the Company continuously monitors the cash flow projections and
liquidity requirements of the Company ensuring that sufficient cash and highly liquid investments are maintained to meet
operating needs, and it’s that some flexibility is maintained through open and committed credit lines. The Company regularly
monitors and makes decisions ensuring that the limits or covenants set forth in debt contracts are not violated. The projec-
tions consider the financing plans of the Company, compliance with covenants, compliance with minimum liquidity ratios and
internal legal or regulatory requirements.
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The Company’s treasury department invests those funds in time deposits and marketable securities whose maturities or liquidity
allow flexibility to meet the cash needs of the Company.
The following table analyzes the derivative and non-derivative financial liabilities of the Company, grouped according to their
maturity, from the date of the consolidated statement of financial position to the contractual maturity date. Derivative financial
liabilities are included in the analysis if their contractual maturities are required to understand the timing of the Company's cash
flows. The amounts disclosed in the table are contractual undiscounted cash flows.
Less than a year
From 1 to 5 years
More than 5 years
As of December 31, 2024
Trade and other accounts payable
$
29,529
$
-
$
-
Current and non-current debt (excluding debt issuance costs
and including non-accrued interest payable)
3,029
31,417
12,863
Derivative financial instruments
802
37
-
As of December 31, 2023
Trade and other accounts payable
$
25,996
$
-
$
-
Current and non-current debt (excluding debt issuance costs
and including non-accrued interest payable)
1,981
18,770
19,837
Derivative financial instruments
253
12
-
As of December 31, 2022
Trade and other accounts payable
$
30,505
$
-
$
-
Current and non-current debt (excluding debt issuance costs
and including non-accrued interest payable)
8,445
19,183
23,515
Derivative financial instruments
1,220
21
-
Supplier finance arrangements
In order to ensure easy access to credit for its suppliers and facilitate early settlement, the Company has entered into supplier
finance arrangements that permit the suppliers to obtain advance payment from the banks, financing that they can access in an
average of 16 days from the issuance of their invoices. This program generates a transactional discount cost, which is stipulated
according to the currency and the term of the invoice to be discounted, which are based on a variable reference rate with a
margin. The Company repays the banks the full invoice amount on the scheduled payment date as required by the invoice. As the
arrangements do not permit the Company to extend finance from the banks by paying them later than the Company would have
paid its suppliers, the Company considers amounts payable to the banks should be presented as part of “Trade and other accounts
payable”. As of December 31, 2024, 30.6% of the “Trade accounts payable” line item, as detailed in Note 15, were amounts owed
under these arrangements.
Below is a detailed account of supplier financing agreements and their presentation within the consolidated statement of financial
position:
December 31
2024
2023
Presented as part of Trade and other accounts payable, including:
$
8,442
$
8,993
Trade accounts payable for which suppliers have already received payment
from the financial institution
$
8,386
Below is a breakdown of the payment date ranges for supplier financing agreements as of December 31, 2024:
Days
For liabilities presented as part of Trade and other accounts payable:
Liabilities that are part of supplier finance arrangements
60- 150
Comparable trade accounts payable that are not part of supplier finance arrangements
30-90
The changes in liabilities that are subject to supplier financing agreements are attributable primarily to additions resulting from
purchases of goods and services, and subsequent cash settlements. There were no material non-monetary changes in these
liabilities.
The Company does not face a significant liquidity risk as a result of its supplier financing arrangements given the limited amount
of liabilities subject to supplier financing arrangements and the Company´s access to other sources of financing on similar terms.
Fair value hierarchy
The following is an analysis of financial instruments measured in accordance with the fair value hierarchy. The 3 different levels
used are presented below:
-
Level 1: Quoted prices for identical instruments in active markets.
-
Level 2: Other valuations including quoted prices for similar instruments in active markets that are directly or indirectly
observable.
-
Level 3: Valuations made through techniques where one or more of their significant data inputs are unobservable.
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The derivative financial instruments of the Company that are measured at fair value as of December 31, 2024, 2023 and 2022, are
located within Level 2 of the fair value hierarchy.
There were no transfers between levels of the fair value hierarchy during the period.
The specific valuation techniques used to value financial instruments include:
-
Market quotations or trader quotations for similar instruments.
-
The fair value of interest rate swaps is calculated as the present value of estimated future cash flows based on observable yield
curves.
-
The fair value of forward exchange agreements is determined using exchange rates at the closing balance date, with the result-
ing value discounted at present value.
-
Other techniques such as the analysis of discounted cash flows, which are used to determine fair value of the remaining finan-
cial instruments.
5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expecta-
tions of future events that are believed to be reasonable under the circumstances.
5.1 Critical accounting estimates and assumptions.
The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will be, by definition,
seldom equal to the related actual results. The estimates and assumptions that have a significant risk of causing a material adjust-
ment to the carrying amounts of assets and liabilities within the next financial year are addressed below:
a) Estimated impairment of goodwill and intangible assets with indefinite useful lives
The Company performs annual tests to determine whether goodwill and intangible assets with indefinite useful lives have suf-
fered any impairment (see Note 12). For impairment testing, goodwill and intangible assets with indefinite lives are allocated to
those gr oups of cash-generating units (“CGUs”) from which the Company has considered that economic and operational
synergies of business combinations are generated. The recoverable amounts of the CGUs have been determined based on the
calculations of their value in use, which require the use of estimates. The most significant of these estimates are as follows:
-
Estimates of future gross and operating margins, according with the historical performance and industry expectations for
each CGU group.
-
Discount rate based on the weighted average cost of capital (“WACC”) of each CGU or group of CGUs.
-
Long-term growth rates.
b) Recoverability of deferred tax assets
Alpek has tax loss carryforwards, which can be used in the following years until maturity expires. Based on the projections of
taxable income that Alpek will generate in the subsequent years through a structured and robust business plan, management
has determined that current tax losses will be used before they expire and, therefore, it was considered probable that the
deferred tax assets for such losses will be recovered.
c) Long-lived assets
The Company estimates the useful lives of long-lived assets in order to determine the depreciation and amortization expenses
to be recorded during the reporting period. The useful life of an asset is calculated when the asset is acquired and is based on
past experience with similar assets, considering anticipated technological changes or any other type of changes; or in the case
of the right-of-use assets, based on the term of the lease agreement. Were technological changes to occur faster than estimat-
ed, or differently than anticipated, the useful lives assigned to these assets could have to be reduced. This would lead to the
recognition of a greater depreciation and amortization expense in future periods. Alternatively, these types of technological
changes could result in the recognition of a charge for impairment to reflect the reduction in the expected future economic
benefits associated with the assets.
The Company reviews depreciable and amortizable assets on an annual basis for signs of impairment, or when certain events
or circumstances indicate that the book value may not be recovered during the remaining useful life of the assets. For intan-
gible assets with an indefinite useful life, the Company performs impairment tests annually and at any time that there is an
indication that the asset may be impaired.
To test for impairment, the Company uses projected cash flows, which consider the estimates of future transactions, including
estimates of revenues, costs, operating expenses, capital expenses and debt service. In accordance with IFRS, discounted fu-
ture cash flows associated with an asset or CGU are compared to the book value of the asset or CGU being tested to determine
if impairment or a reversal of impairment exist.
d) Estimation of default probabilities and recovery rate to apply the model of expected losses in the calculation of impairment
of financial assets
The Company assigns to customers with whom it maintains an account receivable at each reporting date, either individually or
as a group, an estimate of the probability of default on the payment of accounts receivable and the estimated recovery rate, with
the purpose of reflecting the cash flows expected to be received from the outstanding balances on such reporting date.
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e) Business combinations
When business combinations are concluded, the acquisition method is required to recognize the identifiable net assets ac-
quired at fair value, at the date of acquisition; any excess of the consideration paid, which may include over the identified net
assets, is recognized as goodwill, which is subject to impairment tests at least once a year. On the other hand, any excess of the
net assets acquired over the consideration paid is recognized as a gain in profit or loss.
To estimate the fair value of the assets acquired and liabilities assumed, the Company uses observable market data to the extent
it is available. When the input data of Level 1 is not available, the Company hires an independent qualified appraiser to perform
the valuation. Management works closely with the independent qualified appraiser to establish the valuation techniques, the
premises, the appropriate input data and the criteria to be used in the valuation models.
f) Estimation of the discount rate to calculate the present value of future minimum lease payments
The Company estimates the discount rate to be used in determining the lease liability, based on the incremental borrowing
rate (“IBR”).
The Company uses a three-tier model, with which it determines the three elements that make up the discount rate: (i) reference
rate, (ii) credit risk component and (iii) adjustment for characteristics of the underlying asset. In this model, management also
considers its policies and practices to obtain financing, distinguishing between that obtained at the corporate level (that is,
by the parent), or at the level of each subsidiary. Finally, for real estate leases, or, in which there is significant and observable
evidence of the residual value, the Company estimates and evaluates an adjustment for characteristics of the underlying asset,
taking into account the possibility that said asset is granted as collateral or guarantee against the risk of default.
g) Estimation of the lease term
The Company defines the lease term as the period for which there is a contractual payment commitment, considering the
non-cancelable period of the contract, as well as the renewal and early termination options that are likely to be exercised. To
measure the lease liability, the Company estimates the term of the contracts considering their contractual rights and limita-
tions, their business plan, as well as management’s intentions for the use of the underlying asset.
Additionally, the Company considers the early termination clauses of its contracts and the probability of exercising them, as
part of its estimate of the lease term.
5.2 Critical judgments in applying the entity's accounting policies
a) Determination of exercise of control over certain investments in shares
The Company has evaluated critical control factors and has concluded that it should consolidate the financial statements of
its subsidiaries Polioles and Indelpro. The analysis performed by the Company included the assessment of the substantive
decision making rights of the respective Shareholders set forth in their bylaws, resulting in management’s conclusion that it
has the power to govern their relevant activities.
b) Acquisitions of assets and business combinations
Management uses its professional judgment to determine whether the acquisition of a group of assets represents a business
combination or an acquisition of assets. Such determination could have a significant impact on how acquired assets and
assumed liabilities are accounted for, both in their initial recognition and in subsequent years.
6. CASH AND CASH EQUIVALENTS AND RESTRICTED CASH
The cash and cash equivalents are comprised as follows:
As of December 31,
2024
2023
2022
Cash on hand and in banks
$
4,802
$
5,898
$
4,787
Short-term bank deposits
1,414
1,493
1,532
Total cash and cash equivalents
$
6,216
$
7,391
$
6,319
Restricted cash
The restricted cash balance is made up of cash whose restrictions cause the definition of cash and cash equivalents not to be met.
As of December 31, 2023 and 2022, the restricted cash balance is classified as current and non-current assets in the consolidated
statement of financial position, based on the expiration date of the restriction.
As of December 31, 2024, 2023 and 2022, the Company has restricted cash of approximately $386, $322, and $553, respectively.
As of December 31, 2024, the increase compared to the previous year is mainly related to translation effect. As of December 31,
2023, the decrease is compared to the previous year is primarily related to the release of cash restrictions in Octal, derived from
the revocation of anti-dumping measures applicable to PET. As of December 31, 2022, the increase compared to the previous year
relates primarily to funds that were restricted as part of the Octal acquisition.
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7.
TRADE AND OTHER RECEIVABLES, NET
Trade and other accounts receivable, net are comprised as follows:
As of December 31,
2024
2023
2022
Trade accounts receivable
$
16,060
$
14,594
$
21,377
Trade and other accounts receivable from related parties (Note 28)
182
454
497
Recoverable taxes
3,950
4,237
3,579
Notes receivable
32
7
12
Interest receivable
10
4
14
Sundry debtors
502
264
300
Other investments
166
-
-
Allowance for impairment of trade and other accounts receivable
(2,471)
(2,087)
(2,531)
Total
$
18,431
$
17,473
$
23,248
The changes in the impairment allowance for trade and other receivables in 2024, 2023 and 2022, with the expected losses model
used by the Company, are as follows:
For the year ended December 31, 2024:
Customers
or customer
groups
Default
probability
range
Loss given
default range
Opening
balance –
Impairment
allowance
Increases in
the allowance
Cancellations
in the
allowance
Translation
effect
Ending
balance –
Impairment
allowance
Alpek Polyester (1)
0%-100%
0%-100%
$
(2,061)
$
(101)
$
91
$
(369)
$
(2,440)
Grupo Styropek (1)
0%
0%-10%
(4)
(2)
3
(1)
(4)
Polioles
0%
0%-5%
(6)
(2)
6
-
(2)
Indelpro and other (1)
0.61%
4.56%
(16)
(10)
1
-
(25)
Total
$
(2,087)
$
(115)
$
101
$
(370)
$
(2,471)
(1)
The default probability range does not consider customers and groups of customers for which the probability is 100%.
For the year ended December 31, 2023:
Customers
or customer
groups
Default
probability
range
Loss given
default range
Opening
balance –
Impairment
allowance
Increases in
the allowance
Cancellations
in the
allowance
Translation
effect
Ending
balance –
Impairment
allowance
Alpek Polyester (1)
0%-100%
0%-100%
$
(2,362)
$
(165)
$
63
$
403
$
(2,061)
Grupo Styropek (1)
0%
0%-10%
(109)
(6)
102
9
(4)
Polioles
0%
0%-5%
(29)
(8)
28
3
(6)
Indelpro and other (1)
0.65%
3.42%
(31)
(1)
16
-
(16)
Total
$
(2,531)
$
(180)
$
209
$
415
$
(2,087)
(1) The default probability range does not consider customers and groups of customers for which the probability is 100%.
For the year ended December 31, 2022:
Customers
or customer
groups
Default
probability
range
Loss given
default range
Opening
balance –
Impairment
allowance
Increases in
the allowance
Cancellations
in the
allowance
Translation
effect
Ending
balance –
Impairment
allowance
Alpek Polyester (1)
0%-81%
0%-99%
$
(2,596)
$
(87)
$
159
$
162
$
(2,362)
Grupo Styropek (1)
0%
0%-10%
(232)
(25)
115
33
(109)
Polioles
0%
0%-5%
(23)
(7)
-
1
(29)
Indelpro and other (1)
0.81%
8.22%
(77)
-
46
-
(31)
Total
$
(2,928)
$
(119)
$
320
$
196
$
(2,531)
(1) The default probability range does not consider customers and groups of customers for which the probability is 100%.
As of December 31, 2024, 2023 and 2022, the Company has guaranteed accounts receivable of $1,761, $1,540, and $2,322, respectively.
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The net change in the allowance for impairment of trade and other receivables of $384 and $(444) in the years ended December
31, 2024 and 2023, was primarily due to the increase and decrease, respectively, in the probability of default in certain customers
compared to the beginning of the year, as well as the translation effect.
The Company has long-term receivables that are guaranteed with the properties of M&G México’s PET production plant in Altamira,
México, which have been used by Management to mitigate the exposure to credit risk of such financial assets, and therefore has
not recognized an impairment in their carrying amount.
8. INVENTORIES
As of December 31,
2024
2023
2022
Finished good
$
13,542
$
11,358
$
16,229
Raw material and other consumables
11,408
9,020
14,320
Materials and tools
2,609
2,383
2,585
Production in progress
685
561
759
$
28,244
$
23,322
$
33,893
For the years ended December 31, 2024, 2023 and 2022, a provision amounting to $23, $125, and $255, respectively, related to
damaged, slow-moving and obsolete inventory was recognized in the consolidated statement of income.
As of December 31, 2024, 2023 and 2022, there were no inventories pledged as collateral.
9. PREPAYMENTS
The current portion and non-current portion of prepaid expenses is summarized as follows:
As of December 31,
2024
2023
2022
Current portion (1)
$
885
$
744
$
765
Non-current portion
12
6
7
Total prepayments
$
897
$
750
$
772
(1)
This item mainly consists of advance payments for raw materials and prepaid insurance.
10. PROPERTY, PLANT AND EQUIPMENT, NET
Land
Buildings and
constructions
Machinery
and
equipment
Vehicles
Furniture,
lab and
information
technology
equipment
Construction
in progress
Other
fixed
assets
Total
For the year ended December 31, 2022
Opening balance
$ 3,995 $ 5,273
$ 24,581 $
139 $
735
$ 3,276 $ 1,406 $ 39,405
Additions
-
-
11
1
4
2,986
413
3,415
Additions for business acquisitions
-
4,569
6,904
2
10
335
-
11,820
Disposals
-
-
(150)
-
(1)
(10)
(80)
(241)
Impairment
-
(6)
(135)
-
-
(5)
-
(146)
Restatement and translation effect
(142)
(327)
(1,574)
(9)
(64)
(322)
(101)
(2,539)
Depreciation charges recognized in the year
-
(352)
(2,756)
(16)
(110)
-
-
(3,234)
Transfers
-
199
2,599
14
161
(3,002)
-
(29)
Ending balance as of December 31, 2022
$ 3,853 $ 9,356
$ 29,480 $
131 $
735
$ 3,258 $ 1,638 $ 48,451
As of December 31, 2022
Cost
$ 3,853 $ 23,569
$ 88,533 $ 440 $
2,617
$ 3,258 $ 1,638 $ 123,908
Accumulated depreciation and accumulated
impairment
-
(14,213) (59,053)
(309)
(1,882)
-
-
(75,457)
Net carrying amount as of December 31, 2022
$ 3,853 $ 9,356
$ 29,480 $
131 $
735
$ 3,258 $ 1,638 $ 48,451
For the year ended December 31, 2023
Opening balance
$ 3,853 $ 9,356
$ 29,480 $
131 $
735
$ 3,258 $ 1,638 $ 48,451
Additions
-
-
15
1
7
2,881
162
3,066
Disposals
(8)
(10)
(72)
-
(1)
(16)
(179)
(286)
Impairment (1)
(56)
(93)
(831)
(3)
(26)
(404)
(35)
(1,448)
Restatement and translation effect
(338)
(844)
(3,791)
(18)
(88)
(384)
(190)
(5,653)
Depreciation charges recognized in the year
-
(370) (2,689)
(18)
(112)
-
-
(3,189)
Transfers
-
(1,261)
3,548
31
101
(2,408)
-
11
Ending balance as of December 31, 2023
$ 3,451 $ 6,778
$ 25,660 $
124 $
616
$ 2,927 $ 1,396 $ 40,952
As of December 31, 2023
Cost
$ 3,451 $ 17,460
$ 76,364 $ 369 $ 2,233
$ 2,927 $ 1,396 $ 104,200
Accumulated depreciation and accumulated
impairment
- (10,682) (50,704)
(245)
(1,617)
-
- (63,248)
Net carrying amount as of December 31, 2023
$ 3,451 $ 6,778 $ 25,660 $
124 $
616 $ 2,927 $ 1,396 $ 40,952
171
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Land
Buildings and
constructions
Machinery
and
equipment
Vehicles
Furniture,
lab and
information
technology
equipment
Construction
in progress
Other
fixed
assets
Total
For the year ended December 31, 2024
$ 3,451 $
6,778
$ 25,660 $
124 $
616
$ 2,927 $ 1,396 $ 40,952
Opening balance
-
-
855
3
1
1,983
341
3,183
Additions
90
42
60
1
-
100
-
293
Disposals
-
(1)
(39)
(6)
(8)
1
(4)
(57)
Impairment (2)
-
(29)
(1,421)
(13)
(1)
(11)
(15)
(1,490)
Restatement and translation effect
406
952
4,660
23
121
327
181
6,670
Depreciation charges recognized in the year
-
(392)
(2,722)
(19)
(121)
-
-
(3,254)
Transfers
20
118
2,166
29
131
(2,529)
85
20
Ending balance as of December 31, 2024
$ 3,967 $ 7,468 $ 29,219 $
142 $
739
$ 2,798 $ 1,984 $ 46,317
As of December 31, 2024
Cost
$ 3,967 $ 20,398 $ 92,488 $
463 $ 2,763
$ 2,798 $ 1,984 $ 124,861
Accumulated depreciation and
accumulated impairment
- (12,930) (63,269)
(321)
(2,024)
-
- (78,544)
Net carrying amount as of December 31, 2024
$ 3,967 $
7,468 $ 29,219 $
142 $
739
$ 2,798 $ 1,984 $ 46,317
(1) Mainly corresponds to $950 from the closure of the PET resin production operations at the Cooper River site, $409 from the closure of the filament
production plant and the remainder to the Company's normal operations.
(2) Mainly corresponds to $1,191 from the suspension of EPS operations in Beaver Valley and the remainder to the Company's normal operation.
Depreciation expenses of $3,195, $3,134, and $3,176 were recorded in cost of sales, $11, $12, and $11, in selling expenses and $48,
$43, and $47, in administrative expenses in 2024, 2023 and 2022, respectively.
11. RIGHT-OF-USE ASSET, NET
Alpek has leases of fixed assets including buildings, machinery and equipment, transportation equipment, and computer equip-
ment. As of December 31, 2024, the average term of the lease contracts is 8 years.
The right-of-use recognized in the consolidated statement of financial position as of December 31, 2024, 2023 and 2022, is
integrated as follows:
Land
Buildings
Machinery
and
equipment
Rail cars
Ships and
other leased
assets
Total
Net carrying amount:
Balance as of December 31, 2022
$
368
$
661
$
781
$
1,584
$
58
$
3,452
Balance as of December 31, 2023
$
294
$
576
$
472
$
1,775
$
53
$
3,170
Balance as of December 31, 2024
$
397
$
499
$
875
$
1,877
$
89
$
3,737
Depreciation for the year 2022
$
(29)
$
(60)
$
(309)
$
(426)
$
(166)
$
(990)
Depreciation for the year 2023
$
(31)
$
(85)
$
(294)
$
(436)
$
(150)
$
(996)
Depreciation for the year 2024
$
(88)
$
(68)
$
(267)
$
(457)
$
(190)
$
(1,070)
During the years ended December 31, 2024, 2023 and 2022, the Company recognized a lease expense of $704, $559, $780, respec-
tively, related to low value and short-term lease agreements.
Additions derived from business acquisitions, new contracts and modifications to the lease liability, reflected in the net book value
of the right-of-use asset as of December 31, 2024, 2023 and 2022 amounted to $1,327, $1,409, and $1,075, respectively.
As of December 31, 2024, 2023 and 2022, the Company does not have any commitments related to short-term lease agreements.
The Company has not signed lease contracts, which at the date of the consolidated financial statements have not started.
During the year, the Company did not execute significant extensions to the term of its lease contracts.
172
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
12. GOODWILL AND INTANGIBLE ASSETS, NET
Cost
Definite life
Indefinite life
Development
costs
Non-
compete
agreements
Customer
relationships
Patent
Software
and
licenses
Trademarks
with definite
life
Intellectual
property,
and others
Goodwill
Other
Total
As of January 1, 2022
$
995
$
77
$
1,044
$
-
$
307
$
235
$
3,898
$
412
$
10
$
6,978
Additions
10
-
-
-
1
-
1
-
-
12
Additions for business acquisitions
5
-
-
1,638
3
-
-
-
-
1,646
Disposals
-
-
-
-
(31)
-
-
-
-
(31)
Impairment
-
-
-
-
(53)
-
(16)
-
-
(69)
Transfers
5
-
-
-
60
(30)
-
-
-
35
Translation effect
(63)
(3)
(47)
(30)
(10)
(7)
(215)
(25)
(1)
(401)
As of December 31, 2022
952
74
997
1,608
277
198
3,668
387
9
8,170
Additions
7
-
-
-
24
-
-
-
-
31
Disposals
-
-
-
-
(1)
-
-
-
-
(1)
Transfers
2
-
-
-
9
-
-
-
-
11
Translation effect
(120)
(3)
(104)
(216)
(17)
(17)
(482)
(49)
(1)
(1,009)
As of December 31, 2023
841
71
893
1,392
292
181
3,186
338
8
7,202
Additions
7
3
-
-
8
-
-
-
-
18
Additions for business acquisitions
-
-
-
-
2
-
-
-
-
2
Impairment
-
-
-
-
(10)
-
-
-
-
(10)
Disposals
-
-
(1)
-
-
-
-
-
-
(1)
Transfers
5
-
-
-
-
-
-
-
-
5
Translation effect
168
2
107
296
30
10
627
67
2
1,309
As of December 31, 2024
$
1,021
$
76
$
999
$
1,688
$
322
$
191
$
3,813
$
405
$
10
$
8,525
173
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Amortization and Impairment
Definite life
Indefinite life
Development
costs
Non-
compete
agreements
Customer
relationships
Patent
Software
and
licenses
Trademarks
with definite
life
Intellectual
property,
and others
Goodwill
Other
Total
As of January 1, 2022
$
(632)
$
(77)
$
(635)
$
-
$
(236)
$
(153)
$
(1,897)
$
-
$
-
$
(3,630)
Amortization
(26)
-
(59)
(98)
(11)
(5)
(216)
-
-
(415)
Transfers
-
-
-
-
(30)
30
-
-
-
-
Disposals
-
-
-
-
31
-
-
-
-
31
Impairment
-
-
-
-
53
-
4
-
-
57
Additions for business acquisitions
(4)
-
-
(7)
(2)
-
-
-
-
(13)
Translation effect
43
3
37
12
9
3
118
-
-
225
As of December 31, 2022
(619)
(74)
(657)
(93)
(186)
(125)
(1,991)
-
-
(3,745)
Amortization
(24)
-
(53)
(151)
(8)
(4)
(194)
-
(434)
Disposals
-
-
-
-
1
-
-
-
-
1
Translation effect
82
3
80
27
12
8
258
-
-
470
As of December 31, 2023
(561)
(71)
(630)
(217)
(181)
(121)
(1,927)
-
-
(3,708)
Amortization
(22)
-
(53)
(156)
(17)
(4)
(191)
-
-
(443)
Additions for business acquisitions
-
-
-
-
(2)
-
-
-
-
(2)
Impairment
-
-
-
-
9
-
-
-
-
9
Disposals
-
-
1
-
-
-
-
-
-
1
Translation effect
(113)
(2)
(107)
(72)
(17)
1
(397)
-
-
(707)
As of December 31, 2024
$
(696)
$
(73)
$
(789)
$
(445)
$
(208)
$
(124)
$
(2,515)
$
-
$
-
$
(4,850)
Net carrying amount
Cost
$
952
$
74
$
997
$
1,608
$
277
$
198
$
3,668
$
387
$
9
$
8,170
Amortization
(619)
(74)
(657)
(93)
(186)
(125)
(1,991)
-
-
(3,745)
As of December 31, 2022
$
333
$
-
$
340
$
1,515
$
91
$
73
$
1,677
$
387
$
9
$
4,425
Cost
$
841
$
71
$
893
$
1,392
$
292
$
181
$
3,186
$
338
$
8
$
7,202
Amortization
(561)
(71)
(630)
(217)
(181)
(121)
(1,927)
-
-
(3,708)
As of December 31, 2023
$
280
$
-
$
263
$
1,175
$
111
$
60
$
1,259
$
338
$
8
$
3,494
Cost
$
1,021
$
76
$
999
$
1,688
$
322
$
191
$
3,813
$
405
$
10
$
8,525
Amortization and impairment
(696)
(73)
(789)
(445)
(208)
(124)
(2,515)
-
-
(4,850)
As of December 31, 2024
$
325
$
3
$
210
$
1,243
$
114
$
67
$
1,298
$
405
$
10
$
3,675
174
Annexes
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Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Of the total amortization expense, $438, $425, and $401 have been recorded in cost of sales and $5, $9, and $14 in administrative
and selling expenses in 2024, 2023 and 2022, respectively.
Incurred research and development expenses that have been recorded in the 2024, 2023 and 2022 consolidated statements of
income were $52, $68, and $68, respectively.
Impairment testing of goodwill and indefinite lived intangible assets
As mentioned in Note 5, goodwill is allocated to operating segments that are expected to benefit from the synergies of the business
combination, irrespective of whether other assets or liabilities of the acquirer are assigned to those units or groups of units. As
of December 31, 2024, 2023 and 2022, goodwill of $405, $338, and $387, respectively, arises primarily from the Polyester segment.
The recoverable amount from each group of CGU has been determined based on calculations of values in use, which are formed
by after-tax cash flow projections based on financial budgets approved by Management covering a period of 5 years.
The gross and operating margins included in the estimates of value in use have been estimated based on the historical perfor-
mance and the growth expectations of the market in which each group of CGUs operates. The long-term growth rate used in
estimating the value in use is consistent with the projections included in industry reports. The present value of the cash flows
was discounted using a specific discount rate after taxes for each group of CGU and reflects the specific risks associated with each
of them.
The key assumptions used in calculating the value in use in 2024, 2023 and 2022, were as follows:
2024
2023
2022
Estimated gross margin
8.5%
8.3%
8.3%
Growth rate
2.6%
2%
2.1%
Discount rate
9.1%
9.1%
8.9%
13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD AND OTHER NON-CURRENT ASSETS
As of December 31,
2024
2023
2022
Notes receivable (1)
$
1,970
$
1,693
$
2,495
Due from related parties (Note 28)
1,178
763
849
Trade receivables related with business acquisitions
615
684
616
Total other non-current financial assets
3,763
3,140
3,960
Investment in associates and joint ventures
63
261
9,162
Recoverable taxes
753
886
765
Other
80
94
100
Total investments accounted for using the equity method and other non-
current assets
$
4,659
$
4,381
$
13,987
(1) As of December 31, 2024, 2023 and 2022, this item mainly consisted of the financing provided to M&G Polímeros México, S.A. de C.V.
The Company’s account of investments in associates and joint ventures consists of the following:
Shareholding %
2024
2023
2022
Terminal Petroquímica Altamira, S.A. de C.V.
42.04%
$
63
$
61
$
55
Clear Path Recycling, LLC (2)
-%
-
105
201
Agua Industrial del Poniente, S.A. de C.V. (3)
-%
-
95
88
Corpus Christi Polymers LLC (1)
33.33%
-
-
8,818
Investment in associates and joint ventures as of
December 31
$
63
$
261
$
9,162
(1) As a result of the temporary pause in the construction of the plant described in Note 2f, the Company determined that there were indications of
impairment in its investment, therefore, based on the requirements of IAS 36, Impairment of Assets, the Company recognized an impairment of
its investment in the joint venture of $9,591 during the year ended December 31, 2023.
(2)
On September 1, 2024, the Company obtained control over this investment in associates, holding 100% of the shareholding as of December 31,
2024. The shareholding as of December 31, 2023 and 2022 was 49.9%. The acquisition was considered a staged business combination based
on IFRS 3 requirements; fair value adjustments to assets acquired and liabilities assumed, as well as required disclosures, were not considered
significant.
(3)
On June 13, 2024, the Company obtained control over this investment in associates, holding 55.6% of the shereholding as of December 31, 2024.
The shareholding as of December 31, 2023 and 2022 was 47.6%. The acquisition was considered a staged business combination based on IFRS 3
requirements; fair value adjustments to assets acquired and liabilities assumed, as well as required disclosures, were not considered significant.
175
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Financial Statements
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Management
2024
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About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Below is summarized the net loss of investments in associates and joint ventures, which are accounted for by the equity method
of the Company:
2024
2023
2022
Net comprehensive income (loss)
$
1
$
(557)
$
(175)
There are neither commitments nor contingent liabilities regarding the Company's investment in associates and joint ventures as
of December 31, 2024, 2023 or 2022.
14. SUBSIDIARIES WITH SIGNIFICANT NON-CONTROLLING INTEREST
The significant non-controlling interest is integrated as follows:
Non-controlling
ownership
percentage
Non-controlling
net interest
income (loss) for the period
Non-controlling
interest as of December 31,
2024
2023
2022
2024
2023
2022
Indelpro, S. A. de C. V. and subsidiary
49%
$
371
$
885
$
1,967
$
4,205
$ 3,887
$
4,461
Polioles, S. A. de C. V. and subsidiary
50%
65
145
120
624
487
438
Other
117
(149)
135
423
156
392
$
553
$
881
$
2,222
$
5,252
$
4,530
$
5,291
The summarized consolidated financial information as of December 31, 2024, 2023 and 2022, and for the years then ended, corre-
sponding to each subsidiary with a significant non-controlling interest is shown below:
Indelpro, S. A. de C. V. and subsidiary
Polioles, S. A. de C. V. and subsidiary
2024
2023
2022
2024
2023
2022
Statement of financial position
Current assets
$ 4,461
$
3,972
$
4,210 $
1,193
$
962
$
1,250
Non-current assets
7,762
6,605
7,769
965
815
932
Current liabilities
1,811
1,211
1,038
670
508
648
Non-current liabilities
1,831
1,433
1,836
242
295
659
Stockholders’ equity
8,581
7,933
9,105
1,246
974
875
Statements of income
Revenues
11,660
10,442
18,553
3,055
3,023
3,546
Consolidated net income
757
1,807
4,015
131
289
240
Total comprehensive income of the year
2,321
636
3,459
328
152
164
Comprehensive income attributable to non-
controlling interest
1,137
312
1,695
164
76
82
Dividends paid to non-controlling interest
749
886
2,394
27
27
10
Statements of cash flows
Net cash flows generated by operating activities
1,969
1,838
5,215
220
206
346
Net cash flows (used in) generated by investing
activities
(176)
(134)
(193)
(53)
(47)
(64)
Net cash flows used in financing activities
(1,819)
(2,057)
(5,162)
(150)
(351)
(164)
Net increase (decrease) in cash and cash
equivalents
100
(422)
(132)
16
(220)
90
176
Annexes
Consolidated
Financial Statements
Message from our
Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
15. TRADE AND OTHER ACCOUNTS PAYABLE
As of December 31,
2024
2023
2022
Trade accounts payable
$
27,618
$
24,650
$
28,493
Short-term employee benefits
1,094
709
827
Advances from customers
36
54
76
Taxes other than income taxes
677
371
577
Due to related parties (Note 28)
168
153
224
Other accrued accounts and expenses payable
1,743
1,192
1,788
$
31,336
$
27,129
$
31,985
16. DEBT
As of December 31,
2024
2023
2022
Current:
Bank loans (1)
$
1,263
$
343
$
1,466
Current portion of non-current debt
-
-
5,803
Interest payable
373
346
443
Current debt (2)
$
1,636
$
689
$
7,712
As of December 31,
2024
2023
2022
Non-current:
Senior Notes
$
22,405
$
18,648
$
27,271
Unsecured bank loans
16,729
14,177
10,177
Other loans
153
127
147
Total
39,287
32,952
37,595
Less: current portion of non-current debt
-
-
(5,803)
Less: interest generated by non-current debt
(353)
(304)
(423)
Non-current debt
$
38,934
$
32,648
$
31,369
(1) As of December 31, 2024, 2023 and 2022, short-term bank loans and notes payable incurred interest at an annual average rate of 5.35%, 9.56%,
and 6.15%, respectively.
(2)
The fair value of bank loans and notes payable approximates their current carrying amount because of their short maturity.
The carrying amounts, terms and conditions of non-current debt are as follows:
Description
Currency
Outstanding
Balance
Debt
issuance
costs
Interest
payable
Balance as
of December
31, 2024(1)
Balance as
of December
31, 2023(1)
Balance as
of December
31, 2022(1)
Maturity
date
Interest
rate
Senior Notes 144A/
Reg. S / fixed rate
USD
$
-
$
-
$
-
$
-
$
-
$ 5,926
08-aug-23
5.38%
Senior Notes 144A/
Reg. S / fixed rate
USD
10,121
(42)
125
10,204
8,493
9,722
18-sep-29
4.25%
Senior Notes 144A/
Reg. S / fixed rate
USD
12,118
(55)
138
12,201
10,155
11,623
25-feb-31
3.25%
Total Senior Notes
22,239
(97)
263
22,405
18,648
27,271
Bank loan, LIBOR + 2.60%
USD
-
-
-
-
-
486
3-dec-24
2.77%
Bank loan, SOFR + 1.00%
USD
2,331
-
1
2,332
2,112
-
01-may-26
4.57%
Bank loan, SOFR + 1.71%
USD
81
-
-
81
85
-
29-jun-27
6.03%
Bank loan, SOFR + 1.6%
USD
60
-
1
61
98
-
20-jun-26
5.93%
Bank loan, SOFR + 1.05%
USD
4,054
-
35
4,089
3,416
-
21-jul-28
4.53%
Bank loan, SOFR +1.00%
USD
2,027
(5)
10
2,032
1,692
1,936
6-apr-27
4.51%
Bank loan, SOFR +1.05%
USD
4,053
(5)
23
4,071
3,391
3,882
7-apr-27
4.52%
Bank loan, SOFR +1.00%
USD
2,027
(6)
10
2,031
1,691
1,936
6-may-27
4.51%
Bank loan, SOFR +1.00%
USD
2,027
(5)
10
2,032
1,692
1,937
6-apr-27
4.51%
Total unsecured bank loans
16,660
(21)
90
16,729
14,177
10,177
Other loans
USD
153
-
-
153
127
147
Various
Various
Total
39,052
(118)
353
39,287
32,952
37,595
Less: current portion and
interest of non-current debt
-
-
(353)
(353)
(304)
(6,226)
Non-current debt
$ 39,052
$
(118) $
-
$ 38,934
$ 32,648
$ 31,369
(1) As of December 31, 2024, 2023 and 2022, issuance costs of the debt pending amortization were $118, $125, and $171, respectively.
177
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2024
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
As of December 31, 2024, the annual maturities of non-current debt, including current portion and interest payable, and gross
from issuance costs are as follows:
2025
2026
2027
2028 and thereafter
Total
Senior Notes
$
263
$
-
$
-
$
22,239
$
22,502
Bank loans
90
2,391
10,215
4,054
16,750
Other loans
-
-
-
153
153
$
353
$
2,391
$
10,215
$
26,446
$
39,405
As of December 31, 2024, 2023 and 2022, the Company has committed unused lines of credit totaling US$587, US$584, and US$610,
respectively.
Covenants:
Loan contracts and debt agreements contain restrictions, primarily relating to compliance with financial ratios, which include the
following:
a) Interest hedge ratio: it is calculated by dividing the profit before financial result, net, share of result of associates and joint
ventures, income taxes, depreciation and amortization (EBITDA) by the net interest charges for the last four quarters of the
analyzed period. This ratio cannot be less than 2.5 times.
b) Leverage ratio: defined as the result of dividing the consolidated net debt (current and non-current debt, excluding debt
issuance costs less restricted and unrestricted cash and cash equivalents) by the EBITDA of the last four quarters of the period
analyzed. This ratio cannot be greater than 4 times.
Additionally, there are other restrictions in regards of incurring additional debt or making loans that require mortgaging assets,
dividend payments and submission of financial information, which if not met or remedied within a specified period to the sat-
isfaction of creditors may cause the debt to become payable immediately. During 2024, 2023 and 2022, the financial ratios were
calculated according with the formulas set forth in the loan agreements. As of December 31, 2024 and the date of issuance of these
consolidated financial statements, the Company complied satisfactorily with such covenants and restrictions.
17. LEASE LIABILITY
As of December 31,
2024
2023
2022
Current portion:
USD
$
623
$
454
$
537
MXN
197
128
121
Other currencies
124
119
163
Current lease liability
$
944
$
701
$
821
Non-current portion:
USD
$
3,090
$
2,671
$
2,686
MXN
410
261
308
Other currencies
604
524
630
4,104
3,456
3,624
Less: Current portion of lease liability
(944)
(701)
(821)
Non-current lease liability
$
3,160
$
2,755
$
2,803
As of December 31, 2024, 2023 and 2022, respectively, changes in the lease lability related to finance activities in accordance with
the consolidated statement of cash flow are integrated as follows:
2024
2023
2022
Beginning balance
$
3,456
$
3,624
$
3,608
New contracts (1)
1,327
1,409
1,147
Write-offs
(30)
(251)
(8)
Adjustment to liability balance
(191)
51
(23)
Interest expense from lease liability
259
231
206
Lease payments
(1,269)
(1,170)
(1,109)
Exchange loss (gain), net
552
(438)
(197)
Ending balance
$
4,104
$
3,456
$
3,624
(1) Includes lease liabilities assumed in business acquisitions.
178
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2024
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2024
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
The maturity of the lease liability is analyzed as follows:
As of December 31,
2024
2023
2022
Less than a year
$
944
$
701
$
821
Over 1 year and less than 5 years
2,072
1,579
1,669
Over 5 years
1,088
1,176
1,134
Total
$
4,104
$
3,456
$
3,624
18. PROVISIONS
Dismantling,
demolition and
environmental
remediation
Legal
contingencies
Other (1)
Total
As of January 1, 2022
$
134
$
878
$
369
$
1,381
Increases
-
78
1,166
1,244
Payments
(74)
(145)
(235)
(454)
Write-offs
-
(214)
(76)
(290)
Translation effect
(4)
8
(31)
(27)
As of December 31, 2022
56
605
1,193
1,854
Increases
379
138
241
758
Payments
(112)
-
(745)
(857)
Write-offs
(1)
(40)
(35)
(76)
Translation effect
(28)
(29)
(134)
(191)
As of December 31, 2023
294
674
520
1,488
Increases
844
87
196
1,127
Payments
(174)
-
(338)
(512)
Write-offs
(94)
(105)
(73)
(272)
Translation effect
32
(37)
24
19
As of December 31, 2024
$
902
$
619
$
329
$
1,850
(1) As of December 31, 2023 and 2022, the increases in "others" are mainly made up of the contingent consideration for the acquisition of Octal
businesses for $904 (see Note 2), as well as reimbursement for taxes to be recovered from Petrobras $215.
2024
2023
2022
Short-term provisions
$
199
$
749
$
794
Long-term provisions
1,651
739
1,060
As of December 31
$
1,850
$
1,488
$
1,854
As of December 31, 2024, 2023 and 2022, the provisions shown in the table above mainly include $43 (US$2), $103 (US$6), and
$215 (US$11), respectively, related to the obligation to give back to Petrobras certain tax credits, in case they are recovered by
Alpek Polyester Pernambuco and Alpek Polyester Brasil, as well as $605 (US$30). $673, (US$40), and $595 (US$31) for labor, civil
and tax contingencies also derived from the acquisition of Alpek Polyester Pernambuco and Alpek Polyester Brasil, for which the
Company holds an account receivable, included in other non-current assets, for $616 (US$30), $684, (US$40), and $616 (US$32) as
of December 31, 2024, 2023 and 2022, respectively.
Additionally, during the years ended December 31, 2024 and 2023, the Company made partial payments related to the contingent
consideration for the payment of future benefits (earn-out) related to the acquisition of Octal for $201 (US$11.4) and $512 (US$28.4),
respectively. As of December 31, 2024, 2023 and 2022, the contingent consideration is $72 (US$3.5), $308 (US$18.3) and $904
(US$46.7).
19. EMPLOYEE BENEFITS
The valuation of retirement plan employee benefits includes formal plans and constructive obligations that covers all employees
and is based primarily on their years of service, current age, and estimated salary at retirement date.
The subsidiaries of the Company have established irrevocable trust funds for payment of pensions and seniority premiums and
health-care expenses.
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2024
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2024
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Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Below is a summary of the main financial data of such employee benefits:
As of December 31,
2024
2023
2022
Employee benefit obligations:
Pension benefits
$
333
$
439
$
612
Post-employment medical benefits
58
61
64
391
500
676
Defined contribution plans
463
380
349
Employee benefits in the consolidated statement of financial position
$
854
$
880
$
1,025
Charge to the consolidated statement of income for:
Pension benefits
$
6
$
(271)
$
(76)
Post-employment medical benefits
(2)
(4)
(3)
$
4
$
(275)
$
(79)
Remeasurements of employee benefit obligations recognized in other
comprehensive income of the year
$
129
$
(5)
(39)
Remeasurements of accrued employee benefit obligations recognized
in other comprehensive income
$
414
$
285
$
290
Pension and post-employment medical benefits
The Company operates defined benefit pension plans based on employees’ pensionable remuneration and length of service.
Most plans are externally funded. Plan assets are held in trusts, foundations or similar entities, governed by local regulations and
practice in each country, as is the nature of the relationship between the Company and the respective trustees (or equivalent) and
their composition. The Company operates post-employment medical benefit schemes mainly in its subsidiary Alpek Polyester USA.
The method of accounting, assumptions and the frequency of valuations are similar to those used for defined benefit pension
schemes. Most of these plans are not being funded.
Amounts recognized in the consolidated statement of financial position are determined as follows:
As of December 31,
2024
2023
2022
Present value of defined benefit obligations
$
2,234
$
2,535
$
3,107
Fair value of plan assets
(1,843)
(2,035)
(2,431)
Liability in the statement of financial position
$
391
$
500
$
676
The movements of defined benefit obligations are as follows:
2024
2023
2022
As of January l,
$
2,535
$
3,107
$
4,329
Service cost
8
44
69
Interest cost
129
147
98
Contributions from plan participants
36
3
4
Remeasurements:
(Gains) losses from changes in financial assumptions
(78)
78
(715)
Losses (gains) from changes in demographic assumptions
and experience adjustments
-
-
1
Translation effect
434
(323)
(219)
Benefits paid
(823)
(501)
(461)
Transfer of personnel
-
-
2
Plan curtailments
(7)
(20)
(1)
As of December 31,
$
2,234
$
2,535
$
3,107
The movement in the fair value of plan assets for the year is as follows:
2024
2023
2022
As of January 1
$
(2,035)
$
(2,431)
$
(3,632)
Interest income
(97)
(104)
(87)
Remeasurements – return on plan assets, excluding interest income
(51)
(83)
754
Translation effect
(340)
257
183
Contributions
(22)
(6)
-
Benefits paid
702
332
351
As of December 31
$
(1,843)
$
(2,035)
$
(2,431)
The amounts recorded in the consolidated statement of income for the years ended December 31 are the following:
2024
2023
2022
Service cost
$
(8)
$
(43)
$
(69)
Interest cost, net
6
(251)
(10)
Effect of plan curtailments and/or settlements
6
19
-
Total included in personnel cost
$
4
$
(275)
$
(79)
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2024
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2024
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Alpek’s
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Alpek’s
People
Social
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Natural
Capital
Financial
Review
The principal actuarial assumptions are as follows:
As of December 31,
2024
2023
2022
Discount rate Mexico
10.50%
9.75%
9.25%
Discount rate United States
5.41%
4.83%
4.96%-5.06%
Inflation rate Mexico
3.75%
3.50%
3.50%
Wage increase rate Mexico
6.00%
5.50%
5.00%
Medical inflation rate Mexico
7.00%
7.00%
7.00%
The sensitivity analysis of the discount rate for defined benefit obligations is as follows:
Effect in defined benefit obligations
Change in
assumption
Increase in
assumption
Decrease in
assumption
Discount rate
MX 1%
Decrease by
$21
Increase by
$24
Sensibility analyses are based on a change in assumptions, while all the other assumptions remain constant. In practice, this is
slightly probable, and the changes in some assumptions may be correlated. In calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of calculated defined benefit obligation with
the projected unit credit method at reporting period) has been applied as in the calculation of liabilities for pensions recognized
within the consolidated statement of financial position.
Defined benefit plan assets
Plan assets are comprised as follows:
As of December 31,
2024
2023
2022
Equity instruments
$
1,488
$
1,590
$
1,899
Fixed income
355
445
532
Fair value of plan assets
$
1,843
$
2,035
$
2,431
20. INCOME TAXES
The Company is subject to income tax, whose rate is 30% in México. The statutory income tax rates applicable to the main foreign
subsidiaries were as follows:
2024
2023
2022
United States
21%
21%
21%
Brazil
34%
34%
34%
Argentina
35%
35%
35%
Chile
27%
27%
27%
Canada
26.5%
26.5%
26.5%
Spain
25%
25%
25%
United Kingdom
25%
25%
19%
Oman (1)
15%
15%
15%
(1) Octal's production facility (Octal SAOC FZC) is registered in the Salalah Free Zone; therefore, it is exempt from corporate tax until 2024. Starting in
2025, Oman is amending its lax legislation through Royal Decree No. 70/2024 to align with the Pillar Two model rules published by OECD.
In 2023, the Company adopted the amendments to IAS 12, Income Taxes, applicable to income taxes arising from tax laws enacted
or substantively enacted to implement the Pillar Two model rules published by the Organization for Economic Co-operation and
Development (OECD), including tax laws implementing qualified domestic minimum taxes described in those rules.
The Company continues to apply the temporary exception to the deferred tax accounting requirements in IAS 12, and therefore
does not recognize or disclose information about deferred tax assets and liabilities related to Pillar Two income taxes.
As of December 31, 2024, the Company has not experienced significant effects related to Pillar Two income taxes because the
jurisdictions in which the holding companies with subsidiaries that could potentially be impacted participate have not yet enacted
applicable legislation and/or in those jurisdictions where the legislation is already in effect, calculations made according to the
OECD's Pillar Two model rules have not resulted in tax effects. However, the Company will continue to evaluate the impact of the
Pillar Two model income taxes legislation on its future financial performance.
181
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
a. Income taxes recognized in the consolidated statement of income are as follows:
2024
2023
2022
Current income tax
$
(1,237)
$
(2,358)
$
(5,345)
Deferred income taxes
1,819
1,631
(164)
Income taxes expenses
$
582
$
(727)
$
(5,509)
b. The reconciliation between the statutory and effective income tax rates is as follows:
2024
2023
2022
(Loss) income before income taxes
$
(794)
$
(9,306)
$
21,475
Income tax rate
30%
30%
30%
Statutory income tax rate expense
238
2,792
(6,443)
(Less) add income tax effect on:
Annual adjustment for inflation
(240)
(253)
(896)
Non-deductible expenses
(74)
(2,941)
22
Non-taxable income
159
164
1,493
Effect of different tax rates of other countries other than Mexico
(261)
(128)
200
True up with respect to prior years’ current income tax
71
88
(52)
Translation effect from the functional currency
676
(388)
147
Investments in associates and joint ventures
13
(61)
20
Total income taxes
$
582
$
(727)
$
(5,509)
Effective tax rate
(73%)
(8%)
26%
c. The breakdown of the deferred tax asset and deferred tax liability is as follows:
Asset (liability) December 31,
2024
2023
2022
Property, plant and equipment
$
(1,983)
$
(708)
$
(80)
Intangible assets
(224)
(128)
(131)
Debt issuance costs
(5)
(1)
(11)
Provisions
371
237
174
Derivative financial instruments
237
2
286
Tax loss carryforwards
1,906
413
652
Non-deductible interests
1,874
-
-
Tax credits, impairment allowance and other
2,265
1,604
828
Effect of tax rates of other countries and changes in tax rates
(301)
(85)
(9)
Deferred tax asset
$
4,140
$
1,334
$
1,709
Inventories
$
(94)
$
40
$
(22)
Property, plant and equipment, net
(3,721)
(3,557)
(5,753)
Intangible assets
(233)
(148)
(143)
Tax loss carryforwards
336
693
250
Non-deductible interest, provision allowance and others
557
808
1,498
Effect of tax rates of other countries and changes in tax rates
80
140
325
Deferred tax liability
$
(3,075)
$
(2,024)
$
(3,845)
Deferred income tax assets are recognized on tax loss carryforwards to the extent the realization of the related tax benefit
through future tax income is probable. Tax losses amount to $28,886, $24,034, and $25,062, in 2024, 2023 and 2022, respectively.
182
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Consolidated
Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
Tax losses as of December 31, 2024 expire in the following years:
Loss for the year
incurred
Tax-loss
carryforwards
Expiration
year
2015
$
-
2025
2016
59
2026
2017
14
2027
2018
14
2028
2019
29
2029
2020
19
2030
2021
264
2031
2022
26
2032
2023
189
2033
2024
2,572
2034
2025
4,289
2035 and thereafter
Other
21,411
No maturity
$
28,886
As of December 31, 2024, the Company holds tax losses to be amortized in Brazil, through Suape and Citepe, for an amount
of $21,411, which have no expiration date. The Company has decided to reserve the total amount of the tax losses, according
to management's estimate of future reversals of temporary differences; thus, as of December 31, 2024, they do not generate
deferred tax assets.
d. Income tax related to other comprehensive income is as follows:
2024
2023
2022
Before
taxes
Tax
charged
After
taxes
Before
taxes
Tax
charged
After
taxes
Before
taxes
Tax
charged
After
taxes
Equity in other comprehensive
income of associates and joint
ventures recognized through
the equity method
$
1 $
- $
1 $
(1) $
- $
(1) $
1 $
- $
1
Foreign currency translation effect
4,345
-
4,345 (5,923)
- (5,923) (2,652)
- (2,652)
Remeasurement of employee benefit
obligations
129
(31)
98
5
-
5
(39)
20
(19)
Effect of derivative financial
instruments designated as
cash flow hedges
(596)
144
(452)
1,056
(291)
765
(1,182)
327
(855)
Other comprehensive income
$ 3,879 $
113 $ 3,992 $ (4,863) $
(291) $ (5,154) $ (3,872) $
347 $ (3,525)
e. Income tax payable consists of the following:
As of December 31,
2024
2023
2022
Current portion (1)
$
433
$
390
$
1,410
(1)
During the year ended December 31, 2022, Alfa made the decision to voluntarily and spontaneously abandon this regime for a group of
companies in México (Incorporation Regime), which will remain the obligation to pay full taxes. The profit that has been deferred for the years
2019 and 2021 for $372, which was paid during the year ended December 31, 2023.
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
21. OTHER NON-CURRENT LIABILITIES
As of December 31,
2024
2023
2022
Advances from customers (1)
$
-
$
62
$
128
Other (2)
151
431
432
Total other non-current liabilities
$
151
$
493
$
560
(1)
As of December 31, 2023 and 2022, this item corresponds to revenues charged in advance and relates to the future delivery of goods.
(2)
As of December 31, 2023 and 2022, is mainly related to the amount pending of payment for the acquisition of Octal (see Note 2g).
22. STOCKHOLDERS' EQUITY
As of December 31, 2024, capital stock is variable, with a fixed minimum of $6,052 represented by 2,118,163,635 outstanding,
ordinary, nominative shares, "Class I" Series "A", with no par value, fully subscribed and paid in. The variable capital entitled to
withdrawal will be represented, if issued, by registered "Class II" Series "A" shares without par value.
As of December 31, 2024, Alpek SAB had 11,452,735 treasury shares, coming from the own share repurchase program. As of such
date, the market value per share was $13.04 Mexican pesos.
From February to December 2024, the Company purchased 10,945,457 shares in the amount of $140 and sold 10,948,370 shares in
the amount of $139 with a repurchase program that was approved by the Company's stockholders and exercised discretionally by
Management.
From February to December 2023, the Company purchased 13,259,517 shares in the amount of $222 and sold 12,720,936 shares
in the amount of $212 in connection to the same program. From February to December 2022, the Company purchased 9,095,421
shares in the amount of $246 and sold 6,560,342 shares in the amount of $180 in connection to the same program.
The net income of the year is subject to decisions made by the General Stockholders' Meeting, the Company's by-laws and the
General Law of Mercantile Corporations. In accordance with the General Law of Mercantile Corporations, the legal reserve should
be increased annually by 5% of the net annual income until it reaches 20% of the fully paid in capital stock. As of December 31,
2024, 2023 and 2022, the legal reserve amounts to $1,210.
On September 9, 2024, the Company's Board of Director, through powers delegated at the Ordinary General Meeting of stockhold-
ers held on March 6, 2024, approved the payment of a cash dividend per share of US$0.0625, equivalent to the aggregate amount
of $2,634 (US$132), approximately, which were paid on September 19, 2024.
On March 7, 2023, the Company held an Ordinary General Meeting of stockholders, at which the payment of a cash dividend per
share of US$0.0755, equivalent to approximately $2,866 (US$159), was approved in a single instalment, which was paid in a single
instalment on March 16, 2023.
On October 31, 2022, the Company’s Board of Director, through the powers delegated at the Ordinary General Meeting of stock-
holders held on March 3, 2022, approved the payment of a cash dividend per share of US$0.093, equivalent to the aggregate
amount of $3,887 (US$196), approximately, which were paid on November 9, 2022.
On March 3, 2022, the Company held an Ordinary General Meeting of stockholders, at which the payment of a cash dividend per
share of US$0.0820, equivalent to approximately $3,628 (US$173), was approved in a single instalment, which was paid in a single
instalment on March 14, 2022.
The Income Tax Law establishes a tax rate of 10% to the dividends paid to foreign residents and Mexican individuals derived from
the profits generated since 2014, also provides that for the years 2001-2013, the net taxable profit will be determined in terms of
the Income Tax Law in force in the fiscal year concerned.
Dividends paid are not subject to income tax if they derived from the Net Tax Profit Account (“CUFIN”), for its acronym in Spanish).
Any dividends paid in excess of this account will cause an income tax charge based on the tax rate valid in the period in which
they are paid. This tax is payable by the Company and may be credited against its income tax in the same year or the following
two years. Dividends paid from profits which have previously paid income tax are not subject to tax withholding or to any addi-
tional tax payment. As of December 31, 2024, the value of the Capital Contribution Account (“CUCA”), for its acronym in Spanish)
amounted to $27,081. The tax value of the CUFIN amounted to $6,485.
184
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Financial Statements
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Management
2024
Highlights
About
Alpek
2024
Performance
Alpek’s
Governance
Alpek’s
People
Social
Impact
Natural
Capital
Financial
Review
23. SHARED-BASED PAYMENTS
Alpek has a stock-based compensation scheme referred to at 50% of the value of stock of Alfa and the other 50% of the value of
the shares of Alpek SAB for directors of the Company and its subsidiaries. In accordance with the terms of the plan, the eligible
directors will obtain a cash payment contingent upon achieving both quantitative and qualitative metrics derived from the fol-
lowing financial measures:
•
Improved share price
•
Permanence of the executives in the Company
The program consists in determining a number of shares which the executives will have a right to, that will be paid in cash over
the next five years; i.e., 20% every year and will be paid with reference at the average price of the shares during the year. These
payments are measured at the fair value of the consideration, therefore, because they are based on the price of Alfa and Alpek
shares, the measurement is considered to be within level 1 of the fair value hierarchy.
The average price of the shares in pesos considered for the measurement of the executive incentive is:
2024
2023
2022
Alfa, S. A. B. de C. V.
16.83
15.68
15.80
Alpek, S. A. B. de C. V.
13.54
12.89
27.64
The short-term and long-term liabilities are comprised as follows:
As of December 31,
2024
2023
2022
Short term
17
$
9
$
11
Long term
48
27
28
Total carrying amount
$
65
$
36
$
39
24. EXPENSES CLASSIFIED BY THEIR NATURE
The total cost of sales and selling and administrative expenses, classified by the nature of the expense, for the years ended
December 31, are comprised as follows:
2024
2023
2022
Raw material and other
$ (100,070)
$
(101,752)
$
(150,143)
Freight expenses
(7,519)
(8,487)
(9,993)
Employee benefit expenses (Note 27)
(6,996)
(6,976)
(7,538)
Depreciation and amortization
(4,767)
(4,619)
(4,639)
Consumption of energy and fuel (gas, electricity, etc.)
(3,913)
(4,400)
(6,628)
Maintenance
(2,303)
(2,514)
(2,833)
Technical assistance, professional fees and administrative services
(1,584)
(1,727)
(2,216)
Lease expenses
(704)
(583)
(780)
Travel expenses
(161)
(180)
(188)
Human resources
(146)
(193)
(69)
Advertising expenses
(5)
(12)
(2)
Other (insurance and bonds, water, containers and packing, etc.)
(3,562)
(2,270)
(3,315)
Total
$
(131,730)
$
(133,713)
$ (188,344)
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2024
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25. OTHER INCOME (EXPENSES), NET
Other income (expense) for the years ended December 31, are comprised as follows:
2024
2023
2022
Gain on business combination (1) (3)
$
47
$
-
$
425
Other income, net (5)
1,235
195
269
Impairment long-lived assets (2) (4)
(1,791)
(11,078)
(246)
Total
$
(509)
$
(10,883)
448
(1) For the year ended December 31, 2022, corresponds to the gain on the acquisition of Octal (see Note 2g).
(2)
For the year ended December 31, 2023, it primarily includes impairment expense on investment in CCP's joint venture, and long-lived assets from
the closure of the filament plant and the closure of the PET resin production operation at the Cooper River site.
(3)
For the year ended December 31, 2024, primarily corresponds to the gain on the acquisition of Clear Path Recycling, LLC and Agua Industrial del
Poniente, S.A. de C.V.
(4)
For the year ended December 31, 2024, primarily includes impairment expense on the investment in Clear Path Recycling, LLC's joint venture
business of $65, based on IFRS 3 requirements for a staged business combination, supplemented by impairment expense related to the suspen-
sion of EPS operations in Beaver Valley of $1,191, as well as the impairment expense of the investment in the joint venture of CCP of $251, and an
impairment expense related to the fixed assets of Selenis of $283.
(5)
For the year ended December 31, 2024, it primarily includes collateral-related income of $447, Brazil tax incentives and tax recovery of $412, and
insurance recovery of $258.
26. FINANCE INCOME AND COSTS
Financial result, net for the years ended December 31, are comprised as follows:
2024
2023
2022
Financial income:
Interest income on short-term bank deposits
$
332
$
724
$
271
Interest income on loans from related parties
60
25
26
Other financial income
477
568
625
Total financial income
869
1,317
922
Financial expenses:
Interest expense on bank loans
(1,126)
(1,009)
(392)
Non-bank interest expense
(865)
(1,116)
(1,422)
2024
2023
2022
Lease interest expense
(259)
(231)
(206)
Interest cost on employee benefits, net
(79)
(46)
(16)
Other financial expenses
(2,120)
(1,580)
(1,188)
Total financial expense
(4,449)
(3,982)
(3,224)
Loss in exchange fluctuation, net
Foreign exchange gain
15,682
23,168
8,585
Foreign exchange loss
(18,022)
(23,171)
(9,280)
Loss in exchange fluctuation, net
(2,340)
(3)
(695)
Financial result, net
$
(5,920)
$
(2,668)
$
(2,997)
27. EMPLOYEE BENEFIT EXPENSES
Employee benefits expenses for the years ended December 31, are as follows:
2024
2023
2022
Salaries, wages and benefits
$
(5,702)
$
(5,566)
$
(5,660)
Social security fees
(554)
(604)
(608)
Employee benefits
(43)
(73)
(95)
Other fees
(697)
(733)
(1,175)
Total
$
(6,996)
$
(6,976)
$
(7,538)
Labor Reform Related to Vacations
On December 27, 2022, a decree was published by means of which articles 76 and 78 of the Federal Labor Law (“LFT” for its acro-
nym in Spanish) for México were reformed, which will be effective on January 1, 2023. The main change resulting from this labor
reform considers the increase in the minimum annual vacation period for workers with more than one year of service.
The Company evaluated the accounting impacts generated by this labor reform and determined that the increases in the vacation
and vacation premium provision, as a result of the increase in vacation days, were not significant as of December 31, 2024, 2023
and 2022.
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2024
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28. RELATED PARTY TRANSACTIONS
Transactions with related parties during the years ended December 31, 2024, 2023 and 2022 were as follows:
2024
2023
2022
Income
Income from sale of goods:
Stockholders with significant influence over subsidiaries
$
1,534
$
1,522
$
1,903
Income from services:
Affiliates
1
12
12
Stockholders with significant influence over subsidiaries
197
171
207
Income from financial interest:
Alfa
28
23
26
Affiliates
-
3
-
Associates
4
-
-
Income from leases:
Stockholders with significant influence over subsidiaries
40
34
38
Income from sale of energetic:
Affiliates
87
95
156
Stockholders with significant influence over subsidiaries
18
34
31
Other income:
Affiliates
22
1
2
Stockholders with significant influence over subsidiaries
18
2
2
Costs / expenses
Purchase of finished goods and raw materials:
Stockholders with significant influence over subsidiaries
(518)
(647)
(764)
Expenses from services:
Alfa
(259)
(348)
(338)
Affiliates
(125)
(146)
(86)
Stockholders with significant influence over subsidiaries
(12)
(13)
(14)
Affiliates outside Alfa (Nemak)
-
-
(4)
Other expenses:
Affiliates
(31)
(49)
(28)
Associates and joint ventures
(94)
(71)
(59)
Stockholders with significant influence over subsidiaries
(9)
1
-
Affiliates outside Alfa
-
-
(43)
Dividends paid to Alfa
(2,094)
(2,447)
(6,138)
Dividends of subsidiaries to Shareholders with significant influence
(1,219)
(1,474)
(2,404)
For the year ended December 31, 2024, 2023 and 2022, the remunerations and benefits received by the top officers of the Company
amounted to $351, $410 and $424, respectively, comprising of base salary and social security benefits, and supplemented by a
variable consideration program based on the Company’s results and the market value of the shares thereof and of its holding
company.
As of December 31, balances with related parties are as follows:
Nature of the
transaction
As of December 31,
2024
2023
2022
Short-term accounts receivable:
Holding company
Alfa, S. A. B. de C. V.
Administrative services
$
29
$
87
$
140
Affiliates
Innovación y Desarrollo de Energía
Alfa Sustentable, S. A. de C. V.
Administrative services
-
115
115
Newpek, LLC
Administrative services
2
-
1
Terza, S. A. de C. V.
Sale of goods
1
-
1
Sigma Alimentos Lácteos, S.A. de C.V.
Energetics
3
3
3
Sigma Alimentos Centro, S.A. de C.V.
Energetics
5
4
5
Sigma Alimentos Noreste, S.A. de C.V.
Energetics
-
-
1
Alimentos Finos Occidente, S.A. de C.V.
Energetics
1
1
1
Carnes el Tangamanga S.A. de C.V.
Energetics
-
1
-
Associates
Clear Path Recycling, LLC
Financing and interest
-
63
-
Stockholders with significant influence on subsidiaries
BASF
Sale of goods
120
120
184
Basell
Sale of goods
21
60
40
Basell
Energetics
-
-
6
$
182
$
454
$
497
Long-term accounts receivable:
Holding company
Alfa, S. A. B. de C. V. (1)
Financing and interest
$
1,178
$
763
$
849
$
1,178
$
763
$
849
Short-term accounts payable:
Holding Company
Alfa, S. A. B. de C. V.
Administrative services
$
52
$
37
$
65
Affiliates
Alliax, S. A. de C. V.
Administrative services
4
5
4
Axtel, S.A.B. de C.V.
Administrative services
3
4
6
Newpek, S. A. de C. V.
Administrative services
-
-
8
Servicios Empresariales del Norte, S. A. de C. V.
Administrative services
5
2
2
Associates
Tepeal
Administrative services
2
6
1
Stockholders with significant influence over subsidiaries
BASF
Purchase of raw materials
102
87
138
Basell
Energetics
-
12
-
$
168
$
153
$
224
(1) As of December 31, 2024, 2023 and 2022, the loans granted bore interest at average fixed interest rate of 12.47%, 5.34%, and 5.34%, respectively.
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29. SEGMENT REPORTING
Segment reporting is presented consistently with the financial information provided to the Chief Executive Officer, who is the
highest authority in operational decision making, allocation of resources and performance assessment of operating segments.
An operating segment is defined as a component of an entity on which separate financial information is regularly evaluated.
Management controls and assesses its operations through two business segments: the Polyester business and the Plastics and
Chemicals business. These segments are managed separately since its products vary and targeted markets are different. Their
activities are performed through various subsidiaries.
The operations between operating segments are performed at market value and the accounting policies with which the financial
information by segments is prepared, are consistent with those described in Note 3.
The Company has defined Adjusted EBITDA as the calculation of adding operating income, depreciation, amortization, and impair-
ment of long-lived assets.
The Company evaluates the performance of each of the operating segments based on Adjusted EBITDA, considering that this in-
dicator is a good metric to evaluate operating performance and the ability to meet principal and interest obligations with respect
to indebtedness, and the ability to fund capital expenditures and working capital requirements. Nevertheless, Adjusted EBITDA is
not a measure of financial performance under IFRS and should not be considered as an alternative to net income as a measure of
operating performance or cash flows as a measure of liquidity.
Following is the condensed financial information of the Company’s operating segments:
For the year ended December 31, 2024:
Polyester
Plastics and Chemicals
Other
Total
Statement of income:
Income by segment
$
100,013
$
29,501
$
7,895
$
137,409
Inter-segment income
(76)
-
76
-
Income from external customers
$
99,937
$
29,501
$
7,971
$
137,409
Operating income
$
3,312
$
1,636
$
222
$
5,170
Depreciation and amortization
3,796
956
15
4,767
Impairment of long-lived assets
599
1,192
-
1,791
Adjusted EBITDA
$
7,707
$
3,784
$
237
$
11,728
Investments in fixed and intangible assets
$
1,512
$
447
$
14
$
1,973
For the year ended December 31, 2023:
Polyester
Plastics and Chemicals
Other
Total
Statement of income:
Income by segment
$
102,230
$
27,729
$
8,200
$
138,159
Inter-segment income
(77)
(20)
97
-
Income from external customers
$
102,153
$
27,709
$
8,297
$
138,159
Operating (loss) income
$
(9,740)
$
3,220
$
83
$
(6,437)
Depreciation and amortization
3,725
886
8
4,619
Impairment of long-lived assets
11,077
1
-
11,078
Adjusted EBITDA
$
5,062
$
4,107
$
91
$
9,260
Investments in fixed and intangible assets
$
2,149
$
376
$
3
$
2,528
188
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2024
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Alpek
2024
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Capital
Financial
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For the year ended December 31, 2022:
Polyester
Plastics and Chemicals
Other
Total
Statement of income:
Income by segment
$
140,837
$
46,878
$
24,720
$
212,435
Inter-segment income
(120)
(74)
194
-
Income from external customers
$
140,717
$
46,804
$
24,914
$
212,435
Operating income
$
13,966
$
10,464
$
109
$
24,539
Depreciation and amortization
3,713
925
1
4,639
Impairment of long-lived assets
244
2
-
246
Adjusted EBITDA
$
17,923
$
11,391
$
110
$
29,424
Investments in fixed and intangible assets
$
2,487
$
497
$
3
$
2,987
The reconciliation between adjusted EBITDA and income before taxes for the years ended December 31, is as follows:
2024
2023
2022
Adjusted EBITDA
$
11,728
$
9,260
$
29,424
Depreciation and amortization
(4,767)
(4,619)
(4,639)
Impairment of long-lived assets
(1,791)
(11,078)
(246)
Operating income (loss)
5,170
(6,437)
24,539
Financial result, net
(5,920)
(2,668)
(2,997)
Equity in loss of associates and joint ventures
(44)
(201)
(67)
(Loss) income before income taxes
$
(794)
(9,306)
$
21,475
The Company's main customer generated revenues amounting to $7,704, $10,009, and $9,230, for the years ended December 31,
2024, 2023 and 2022. These revenues are resulted from the polyester reporting segment and represent 5.6%, 7.2%, and 4.0% of
the consolidated revenues with external costumers for the years ended December 31, 2024, 2023 and 2022.
Following is a summary of revenues per country of origin for the years ended December 31:
2024
2023
2022
México
$
52,948
$
52,443
$
88,922
United States
41,361
44,991
64,383
Argentina
5,502
4,894
8,867
Brazil
15,863
13,681
23,303
Chile
886
941
1,325
Canada
1,781
2,317
3,627
United Kingdom
3,503
3,393
5,648
Oman
15,111
15,098
16,086
Saudi Arabia
454
401
274
Total revenues
$
137,409
$
138,159
$
212,435
The following table shows the intangible assets and property, plant and equipment by country:
As of December 31,
2024
2023
2022
México
$
1,157
$
1,083
$
1,312
United States
1,093
1,028
1,375
Canada
2
3
4
Brazil
168
194
214
Oman
1,255
1,186
1,520
Total intangible assets
$
3,675
$
3,494
$
4,425
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2024
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Alpek
2024
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As of December 31,
2024
2023
2022
México
$
20,752
$
17,831
$
21,285
United States
8,973
7,684
9,769
Canada
295
497
471
Argentina
674
281
128
Chile
280
237
276
Brazil
4,279
4,699
4,926
United Kingdom
722
624
667
Oman
10,030
8,830
10,598
Saudi Arabia
312
269
331
Total property, plant and equipment
$
46,317
$
40,952
$
48,451
30. COMMITMENTS AND CONTINGENCIES
As of December 31, 2024, the Company has the following commitments:
a. As of December 31, 2024, 2023 and 2022, the Company’s subsidiaries had entered into various agreements with suppliers and
customers for purchases of raw materials used for production and the sale of finished goods, respectively. These agreements
are effective between one and five years and generally contain price adjustment clauses.
b. A subsidiary of the Company entered into agreements to cover the supply of propylene, which establish the obligation to
purchase the product at a priced referenced to market values for a specific period.
As of December 31, 2024, the Company has the following contingencies:
a. During the normal course of the business, the Company is involved in disputes and litigations. While the results of these may
not be predicted, the Company does not believe that there are actions pending to apply, claims or legal proceedings against or
affecting the Company which, if it were to result in an adverse resolution to the Company, would negatively impact the results
of its operations or its financial position.
b. Some of the Company’s subsidiaries use hazardous materials to manufacture polyester filaments and staple fibers, polyeth-
ylene terephthalate (PET) and terephthalic acid (PTA) resin, polypropylene (PP) resin, expandable polystyrene (EPS), chemical
specialties and they generate and dispose of waste, such as catalysts and glycols. These and other activities of the subsidiaries
are subject to various federal, state and local laws and regulations governing the generation, handling, storage, treatment
and disposal of hazardous substances and wastes. According to such laws, the owner or lessor of real estate property may be
liable for, among other things, (i) the costs of removal or remediation of certain hazardous or toxic substances located on, in,
or emanating from, such property, as well as the related cost of investigation and property damage and substantial penalties
for violations of such law, and (ii) environmental contamination of facilities where its waste is or has been disposed of. Such
laws impose such liability without regard to whether the owner or lessee knew of, or was responsible for, the presence of such
hazardous or toxic substances.
Although the subsidiaries estimate that there are no existing material liabilities relating to noncompliance with environmental
laws and regulations, there can be no assurance that there are no undiscovered potential liabilities related to historic or cur-
rent operations that will require investigation and/or remediation under environmental laws, or that future uses or conditions
will not result in the imposition of an environmental liability or expose them to third-party or related parties actions, such as
tort suits. Furthermore, there can be no assurance that changes in environmental regulations in the future will not require the
subsidiaries to make significant capital expenditures to change methods of disposal of hazardous materials or otherwise alter
aspects of their operations.
c. As of December 31, 2024, the Company is in a process of fiscal litigation in one of its subsidiaries in Brazil, in relation to the
demand for payment of the Tax on the Circulation of Goods and Services ("ICMS") that the Ministry of Finance of the State
of Sao Paulo ("SFSP", for its initials in Portuguese) has raised against the Company, due to differences in the criteria for the
calculation and crediting of such tax. Considering all the circumstances and precedents of jurisprudence available at that
date, management and its advisors have determined that it is probable that the Superior Court of Justice of Brazil will issue a
judgment in favor of the Company for the amount related to differences in the calculation, which would exempt it from paying
$482 in taxes, fines and interest that the SFSP demands; therefore, as of December 31, 2024, the Company has not recognized
any provision related to this concept.
On the other hand, for the concept of ICMS crediting, the demanded amount is $89, and management and its advisors consider
that it is not probable that the authorities will issue an unfavorable resolution for the Company; thus, it has not recognized any
provision related to this concept as of December 31, 2024.
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d. Anti-Dumping of PET Resin
In March 2015, in response to petitions made by PET resin manufacturers in the United States of America (“USA”), the International
Trade Commission (“ITC”) and the Department of Commerce of The United States (“USDOC”) initiated an Anti-Dumping inves-
tigation on imports of PET resin from China, India, Oman and Canada, resulting in the imposition of an antidumping duty. The
duty has been reviewed annually during the month of May at the request of either Octal or the USA manufacturers, the rate
has fluctuated based on the annual reviews. Currently, the antidumping duty applied is 0.00% following the Department of
Commerce's seventh review and determination.
e. Anti-Dumping of PET Sheet
In July 2019, in response to petitions made by PET Sheet manufacturers in the USA, the ITC and the USDOC initiated an Anti-
Dumping investigation on imports of PET Sheet from Oman, Korea and Mexico, resulting in the imposition of an antidumping
countervailing duty (percentage of PET sheet export sales from Oman to the USA) of 4.74%. In October 2022, the DOC, in the
first administrative review, preliminarily determined a new margin equivalent to 4.16%, which was in the process of being
confirmed in a final determination; however, effective February 1, 2023, the USDOC concluded a change of circumstances
review and thereby revoked the Anti-Dumping order applicable to PET sheet originating in Oman. Because the antidumping
order was revoked, the Department of Commerce also rescinded the antidumping administrative reviews for the 2020-2021
and 2021-2022 periods.
31. SUBSEQUENT SIGNIFICANT EVENTS
In preparing the financial statements the Company has evaluated the events and transactions for their recognition or disclosure
subsequent to December 31, 2024, and through January 31, 2025 (date of issuance of the consolidated financial statements), and
no significant subsequent events have been identified.
32. AUTHORIZATION TO ISSUE THE CONSOLIDATED FINANCIAL STATEMENTS
On January 31, 2025, the issuance of the accompanying consolidated financial statements was authorized by Jorge Pedro Young
Cerecedo, General Director and José Carlos Pons de la Garza, Administration and Finance Director.
These consolidated financial statements are subject to the approval of the Company’s ordinary Shareholders’ meeting.
191
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2024
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Financial
Review
ALPEK, S.A.B. DE C.V.
Av. Gómez Morín 1111 Sur
Col. Carrizalejo, San Pedro
Garza García Nuevo León,
CP. 66254, Mexico
www.alpek.com
INVESTOR RELATIONS
Bárbara Amaya
Alejandra Bustamante
IR@alpek.com
CONTACT
US