mexican packaging machinery market research
TRANSCRIPT
Mexican Packaging Machinery Market Research Index ............................................................................................................................ 1 Executive Summary: .................................................................................................... 3 1. Economic and Financial Issues: ..................................................................... 5
1.1. Mexico’s Economic Outlook................................................................................. 5 1.2. Financial Issues impacting the Packaging machinery market............................. 8
2. Mexico’s Packaging Machinery Market Overview: ...................................... 10
2.1. Market Size. ....................................................................................................... 10 2.2. Who are the customers?.................................................................................... 12 2.3. How to win exposure. ........................................................................................ 13
3. Who are the Competitors? ............................................................................. 15
3.1. Leading Packaging Machinery Suppliers. ......................................................... 15 3.2. Customer’s Perception by Origin. ...................................................................... 17 3.3. Are European, Asian or Latin American suppliers going to control the Mexican packing machinery market?............................................................................................ 19
4. SWOT Analysis for PMMI members: ............................................................. 21
4.1. Strengths............................................................................................................ 21 4.2. Weaknesses. ..................................................................................................... 21 4.3. Opportunities. .................................................................................................... 21 4.4. Threats............................................................................................................... 21
5. Recommendations for PMMI Members:........................................................ 22 6. The Food Industry: ......................................................................................... 23
6.1. Industry Overview. ............................................................................................. 23 6.2. Company Ranking by Size. ............................................................................... 24 6.3. Key Players........................................................................................................ 24 6.4. New Packaging Trends...................................................................................... 25 6.5. Company Profiles. ............................................................................................. 26
Barcel, S.A. de C.V............................................................................................ 26 Conservas La Costeña, S.A. de C.V. ................................................................ 29 DANONE de México, S.A. de C.V. .................................................................... 35 Frigorizados La Huerta, S.A de C.V. ................................................................. 39 Grupo BIMBO, S.A. de C.V. .............................................................................. 42 Grupo Gruma, S.A. de C.V. ............................................................................... 47 Helados Holanda, S.A. de C.V. ......................................................................... 50 Herdez, S.A. de C.V. ......................................................................................... 54 Martín Cubero, S.A de C.V. ............................................................................... 59 Nestlé de México, S.A. de C.V. ......................................................................... 63 Pilgrim’s Pride S.A. de C.V. ............................................................................... 69 Qualtia Alimentos, S.A. de C.V.......................................................................... 73 Sabormex, S.A. de C.V...................................................................................... 77 Sigma Alimentos, S.A. de C.V. .......................................................................... 82
7. The Beverage Industry: .................................................................................. 87
7.1. Industry Overview. ............................................................................................. 87 7.2. Company Ranking by Size. ............................................................................... 87 7.3. Key Players........................................................................................................ 87 7.4. New Packaging Trends...................................................................................... 88 7.5. Company Profiles. ............................................................................................. 88
BACARDI y CIA., S.A. de C.V. .......................................................................... 89 Big Cola S.A. de C.V. ....................................................................................... 93 Cadbury Schweppes, S.A. de C.V..................................................................... 97 Casa Cuervo, S.A. de C.V. .............................................................................. 100 Grupo Modelo, S.A. de C.V ............................................................................. 103 Tequilera Corralejo, S.A. de C.V. .................................................................... 109
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8. The Pharmaceutical Industry:...................................................................... 112
8.1. Industry Overview. ........................................................................................... 112 8.2. Company Ranking by Size. ............................................................................. 112 8.3. Key Players...................................................................................................... 113 8.4. New Packaging Trends.................................................................................... 113 8.5. Company Profiles. ........................................................................................... 113
Bayer , S.A. de C.V.......................................................................................... 114 Boehringer Ingelheim Promeco, S.A. de C.V. ................................................. 118 Eli Lilly de México, S.A. de C.V. ...................................................................... 122 Laboratorios Sanfer, S.A. de C.V. ................................................................... 125 Merck, Sharp and Dohme de México, S.A. de C.V. (MSD)............................. 129 Novartis Farmacéutica, S.A. de C.V................................................................ 132
9. The Personal Care Industry: ........................................................................ 137
9.1. Industry Overview. ........................................................................................... 137 9.2. Company Ranking by Size. ............................................................................. 137 9.3. Key Players...................................................................................................... 137 9.4. New Packaging Trends.................................................................................... 138 9.5. Company Profiles. ........................................................................................... 138
BDF México, S.A. de C.V. ............................................................................... 139 Grupo PIMABE S.A. de C.V. ........................................................................... 142 Revlon de México, S.A. de C.V. ...................................................................... 146
10. Other Consumer Products:.......................................................................... 150
10.1. Industry Overview. ........................................................................................... 150 10.2. Company Profiles. ........................................................................................... 150 10.3. New Packaging Trends.................................................................................... 150
Grupo Comex S.A. de C.V............................................................................... 151 Grupo Helvex, S.A. de C.V. ............................................................................. 156 Industrias Alen, S.A. de C.V. ........................................................................... 159
APPENDIX 1.Packaging Machinery Import Statistics 2003-2005: ........................ 163
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Executive Summary: PMMI commissioned the production of a report on current business conditions and potential opportunities for PMMI members in the Mexican market. PMMI defined a sample of 50 companies to conduct direct interviews, elicit information and analyze packing machinery demand and supply trends in the Mexican market. The company selection consisted of a sample of 50 of the largest multinational and local companies in the beverages, foods, pharmaceutical, personal care and other consumer products segments. This report was produced by Hanhausen & Doménech Consultores, S.C. (HDC), www.hdc.com.mx a Mexico City based consulting firm specialized in market research, definition of business opportunities and project development that has closely monitored Mexico’s packaging machinery market since 1999. The Mexican packaging machinery market continues to be a very attractive export destination for PMMI members, as approximately 80% to 85% of the market demand is covered by imported machinery. Imports of Packaging Machinery grew 4.25% in 2005, to reach a record value of US$378.5 million in imports. In addition, the spare parts imports reached a value of over US$ 60 million. European suppliers have taken the largest share of the market, but this might be explained among other factors by a decline in marketing activity by US suppliers. For the production of this study, HDC obtained information on upcoming purchasing plans for packing machinery valued at close to US$ 50 million at 32 of the largest companies in the food, pharmaceutical, personal care, beverage and other consumer products industries as well as their perception on market trends and supplier preferences. The country is a few weeks away from Presidential elections which are viewed as a significant turning point for Mexico. The political climate will represent a significant factor curtailing demand for packing machinery in Mexico over the following months.
This report offers not only a description of these 32 potential customers and their upcoming procurement plans, but also describes the overall packaging machinery market, trends, opportunities and gives a series of recommendations to PMMI members to maintain and increase their participation in the Mexican market. As such, the report begins with a brief overview to Mexico’s economy as packaging machinery market demand is highly dependant on the overall state of the economy. Section 1 also addresses foreign investment flows into Mexico which are showing increasing signs of diversification due to Mexico’s extensive list of free trade agreements with other world economies. This chapter also makes a detailed comparison to the effects that the appreciation of the Euro and the US Dollar in front of the Mexican peso represent to Mexican packaging machinery buyers. Section 2 provides a description and analysis of packaging machinery trends in Mexico, it reviews why some countries are increasing their presence in the market and what this market is expected to represent in the upcoming years. Section 3 looks at the competitive structure of the current Mexican marketplace, it looks at the roles of the key packaging machinery manufacturers – USA, Italy, Germany and others – and what they are doing to increase their market shares and presence. It also looks at what the customers expect from manufacturers as competition increases. Section 4 provides a SWOT analysis for American packaging machinery manufacturers in the Mexican marketplace. The SWOT analysis is offered as a valuable tool for identifying opportunities and challenges for manufacturers seeking to enter or expand in this market. Section 5 gives a series of useful recommendations for those PMMI members that seek to increase their participation in the Mexican market. These recommendations are based not only in actions that have led other manufacturers to win market share, but most importantly in the opinions of what packaging machinery
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buyers – your potential customers – expect from suppliers to decide for one over another. Finally sections 6 to 10, provide a brief description of the food, pharmaceutical, personal care, beverage and other consumer product industries, important packaging trends occurring in each area, as well as individual company profiles of 32 potential packaging machinery buyers. In short, while the Mexican market for packaging machinery has seen increased competition from various parts of the world, PMMI members have significant competitive advantages that combined with the right strategies can represent increased short term sales to Mexico. Participation in Trade Shows, particularly in Expo Pack is critical to gain exposure and develop contacts with interested packaging machinery buyers as all the companies interviewed mentioned that they attend this show to learn about new technologies and product offerings. After-sales service and local support are becoming one of the most important purchasing decision factors in Mexico. As manufacturing sophistication grows in Mexico there is creating the need for providing support to the clients and they are making very strong decisions based on that commitment. This report provides concrete upcoming sales opportunities and the necessary contact information to access the buyers. US suppliers can regain market share in Mexico if they commit to a proactive marketing and sales program.
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1. Economic and Financial Issues:
1.1. Mexico’s Economic Outlook.
The demand for packing machinery equipment in Mexico is the result of an extremely complex combination of factors which escape the geographical boundaries on Mexico, as the large number of free trade agreements that this country has signed over the past years, create an exceptionally open and globalized economy impacted by the decisions of both multinational companies operating in Mexico as well as local corporations. The conception that local growth is a factor for the purchase of packing machinery remains, but the completely opposite
scenario, including steep currency depreciation could also boost investment in highly price sensitive and globalized activities. The direct determining factor is the growth in production of indigenous products (Tequila, Corona Beer, etc.) or the degree of production competitiveness which can be obtained either through efficiency of through production factor distortions including exchange rate variations. The Mexican economy performed modestly well during 2005, achieving 3.5% real GDP growth and a declining inflation rate, closing the year at 3.6%, the lowest inflation rate in 40 years. Growth was again uneven throughout sectors with some areas experiencing growth close to 8% including the pharmaceutical industry.
Mexico's Economic Performance
-0.20%
5.70%
1.40%
4.40%
3.50%
5%4.50%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2000 2001 2002 2003 2004 2005 2006/f
GD
P G
row
th
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Infla
tion
GDP Growth Inflation
Source: HDC with information from Banco de México. Despite not reaching the 7% growth that remains as the objective of the administration, growth during 2005 was higher than in the two previous years. It is expected that 2006 will be a better year if there is no impact from internal political factors or the tightening of the US Federal Reserve does not precipitate a recession in the US economy which would directly impact economic growth in Mexico. Mexico will hold presidential elections in early June and the contrasting options will significantly impact economic growth and
capital investment in Mexico over the current and following years. At present there is a 50% / 50% change of electing a pro business president that will support maintaining current stability or the election of a left of center president interested in changing what he defines as a failing neo-liberal model. Underlining the impact of the electoral result is by no means an exaggeration as the future of Mexico over the following years depends on that electoral result.
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Changing the current economic policies of strictly maintaining macroeconomic stability will severely impact Mexico. Especially when the current conditions are favorable for capital investment projects because of exchange rate stability and declining real interest rates. Mexico will be impacted by the FED’s decisions, which are exogenous to local economic forecasts. This impact will be common to US, Mexican and all international markets that are sensitive to US economic policy decisions. The importance of stability, which is now, challenged by US inflation and the potential debasing of the value of the US dollar is that it will significantly increase the cost of financing of capital investment. This will be one of the factors that could change the currently positive investment climate in Mexico, which continues a declining inflation trend which has taken interest rates to historical lows. Inflation for 2006 – excluding unpredictable political factors- was estimated at fewer than 3.5%. This would be an extraordinary achievement considering the significant price increases for several commodities and fuels. Mexico’s trade balance during 2005 resulted in a deficit of approximately US $ 7.6 billion. Exports reached US$ 214.3 billion while imports US$ 221.8 billion. Trade with the U.S. continues to represent close to 2/3 of total Mexican foreign trade. Representing 60% of Mexico’s total imports and 88% of its exports, for this reason the Mexican economy continues to be highly
dependant on the economic performance of the U.S. Capital goods imports grew by 16.9% which is the highest growth since 1998 and is a sign of the important capital investment taking place in the manufacturing industry in Mexico. The government produced its annual economic forecast document expecting 3.6% GDP growth and inflation of 3.5%. Over the 1Q of 2006, the economy was growing at over 5%. This higher economic growth will potentially have a positive impact in personal consumption and general demand, which will translate in the need for production expansion projects in all industries including those which demand packing equipment and materials. Foreign direct investment in Mexico is expected to be higher that in 2005. Over the past years a significant portion of the investment went to the financial and telecommunication sectors. For this year, it is expected that a higher portion of the investment will be used for capacity expansion in several manufacturing sub sectors. Mexico’s country risk continues at historically low levels, which is permitting companies to access the international financial markets under favorable conditions. Political uncertainty has made companies switch debt into pesos over the past few months as a protective measure in case of an economic shock resulting from a political crisis after the elections.
0
5
10
15
20
25
30
Billio
n U
S$
2000 2001 2002 2003 2004 2005 2006/f
Foreign Direct Investment
Source: HDC with information from Banco de México.
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FDI Flows by Origin 2000-2005
0%10%20%30%40%50%60%70%80%90%
2000 2001 2002 2003 2004 2005
NAFTAEuropeJapanOther
Source: HDC with information from Banco de México .
The composition of foreign direct investment to Mexico during 2005 had close to 70% of funds originating in North America. Spain has become an important investor in Mexico in various areas that include the banking and telecommunications industries, this has creates investment “spikes” in recent years like the payment for Mexico’s second largest bank by the Spanish bank BBVA, but with the exception of these unusual transactions the normal trend is for North America to continue representing the leading source of FDI into Mexico. There have been initial reports that Ford might shift a very significant portion of their North American manufacturing to Mexico, which will have a very significant impact in FDI flows into Mexico over the following couple of years. The free trade agreement with Japan has been in operation of over one year. It has not had the spectacular impact on FDI or trade growth that resulted from NAFTA. It will be important to follow the evolution of this treaty even while the significant geographical distance might be a significant factor for experiencing increased Japanese product presence in the Mexican market. Importing Japanese packing machinery into Mexico still requires the payment of import duties on most classifications as only one has reached full tariff elimination.
Crude oil exports represent a significant revenue source for the Mexican federal government. The exceptionally high price of this commodity in 2005 provided the Mexican government with unexpected income to spend on a mirage of social programs. High oil prices in 2006 are also expected to contribute to higher government spending during the year. The Mexican oil company Pemex has received a growing share of the windfall profits to initiate exploration in deep waters, which represent a new area of oil production for Mexico. The Mexican Peso appreciated by almost 8.5% during 2006. This is explained by the higher real interest rate offered in Mexico over dollar denominated investments. During the first half of 2006 the value of the peso has declined by almost 9% returning to the value observed in early 2005. The trend of the exchange rate will depend of interest rate differentials between Mexico and the US and the potential speculative impact of the upcoming Presidential elections in Mexico. At present, exchange rates remain very stable between the Peso and the US Dollar and the US currency and the Euro, so exchange rate factors are not expected to influence the demand for packing machinery in Mexico during 2006, which is the opposite of what was observed at the beginning of the decade and which signaled the beginning of the trend that resulted in the European dominance of imported packing machinery market in Mexico.
7
Peso Exchange Rate15
Oct-0
$ P
9
10
11
Abr-03 Oct-03 Abr-04
12
13
14es
os
4 Abr-05 Oct-05 Abr-06
Dollar Euro
. Source: HDC with information from Banco de M
éxico
Financial Issues impacting 1.2.the Packaging machinery market.
The government is forecasting higher economic growth during 2006 and reduced inflation; both elements have positive impacts on direct demand and the possibility for continued double digit growth in consumer credit. These factors will likely impact local producers which will require increasing production capacity and requiring dedicating additional investments for process and packing machinery.
Imports of packing machinery during 2005 reached US$ 378.5 million which is a historical high. The growth trend since 2003 has remained very stable but growth has remained moderate. This can be explained by the explosive growth of 32.5% experienced during 2003. Packing machinery imports are growing at lower rates than general GDP growth in Mexico. The explanation is that the sector continues to digest the explosive growth experienced during 2003, which took total import value to its highest observed levels.
Packaging Machinery Importe vs. GDP Growth
-15%-10%-5%0%5%
10%15%20%25%
2000 2001 2002
Pac
kagi
ng M
achi
ner
Impo
rts
30%
20
y 5.00%
6.00%35%
03 2004 2005-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
GD
P G
row
th
P.M. Imports GDP Grow th
nd Bancomext. Source: HDC with information from Banco de Mé The forecast of demand for packing
achinery in Mexico during 200
xico a
6 is quite mcomplex. There are two opposing scenarios, all dependent upon the performance of the US economy, US interest rate trends and
the results of the Mexican Presidential elections. The worst possible short term scenario would be for the leftist candidate to win the presidential elections. Under this possible outcome, imports of packing
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machinery might drop as much as 50%. Exports of US packing machinery to Mexico dropped by 18% during 2005, this is the largest decline in the past six years and signals the continued deterioration of the US presence in the Mexican market of imported packing machinery.
Is offering financing important to the largest companies in Mexico?
The largest Mexican companies and multinationals operating in Mexico pay for their purchases with their cash flow and have little interest in recurring to vendor financing. This situation presents a sharp contrast to mid size companies where offering equipment financing was a significant sales tool utilized by European suppliers. Current political conditions in Mexico might also explain that large companies are not interested to incur in credit obligations under an unpredictable political environment which can have an impact on economic and exchange rate variables in Mexico.
Global and local conditions point to the kely scenario of a contraction in demand in exico for packing machinery. The
ompanies that were interviewed for the roduction of this report indicated that most f the companies were investing in packing achinery to make their processes more fficient but will hold investments in xpanding production capacity.
he companies that were interviewed for is report represent a very significant
ample of the largest local and multinational ompanies operating in Mexico. For ompanies of this caliber, the possibility to ceive financing from the supplier is much ss attractive than for smaller companies.
ll companies interviewed in this sample dicated that their purchases are paid in
ash and that for the moment there is no terest in using credit. This is also
ex it might or Eacpe n after the July presidential elections.
liMcpomee Tthsccrele Aincin
plained by the fact that vendor cred be denominated in US dollars
uros and at this moment, local companies re reducing their exposure to foreign urrency denominated debts to minimize the otential impact of an abrupt speculative xchange rate variatio
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2. Mexico’s Packaging Machinery Market Overview:
2.1. Market Size. Mexico has not been traditionally recognized as an important packaging machinery manufacturer, as the number of local manufacturers is small and most of the production was concentrated in complementary equipment and basic machinery that lacked of any sophistication, however in recent years some Mexican packaging machinery manufacturers began producing more advanced machinery and some even developed strategic alliances with foreign manufacturers to receive technology in exchange to inexpensive labor and access to a wide list of countries
that have free trade agreements with Mexico. Local packaging machinery manufacturers satisfy about 15% of the market demand while the remaining is imported. There are no official figures indicating the value of the packaging machinery market in Mexico. Using import data and calculating the imported equipment share in the market, the total market value for this equipment represented approximately US$442 million during 2005. To this market we can add an additional US$60 to 65 million of parts. Packaging machinery imports (not including parts) during 2005 reached US$378.50 million, a 4.25% increase over 2003.
050
100150200250
Mill
ion
300
U
350400450
S$
2001 2002 20
nd Parts Imports 2000-2005
2000 03 2004 2005
Packaging Machinery a
Redthe high import value reached since 2003 and a series of factors including the following: • Demand for packaging machinery
during 2005 and 2006 was lower than normal as several companies decided to place on hold their investment plans due to the uncertainty caused by the Presidential elections.
• There was such an aggressive and
successful effort to sell packing machinery in Mexico over the past two years, that the market appears to be
pausing and waiting for the electoral result.
• Imports of packing machinery over the
first four months of 2006 are significantly below the levels of 2005.
• The possibility of packing machinery
and parts import values of 2006 passing the 2005 record, depend mostly on the results of the Presidential elections in Mexico.
Source: HDC with information from Bancomext.
uced import growth can be explained by
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Packaging Machinery Part Imports 1993-2004
199 1999 2000 2001 2002 2003 20040
10,000
20,000
30,000
40,000
1993 1994 1995 1996 1997
Thou
sand
U
50,000
60,000
70,000
S$
8
Source: HDC with information from Bancomext.
he exercise of producing a forecast for
are concerned bout potential and likely negative results of e Presidential elections which will return
Mexico down an already traveled and failed path of populist governments which caused significant economic crises. Under current conditions there is no other alternative than to suggest a series of potential outcomes for 2006. Under an optimistic scenario, packaging machinery imports could grow between 10 and 15% during 2006 if the outcome of the presidential elections is viewed as positive by local and international investors and the FED suspends its tightening phase.
Timported packing machinery demand in Mexico for 2006 is quite difficult as current conditions are plagued by a series of factors not present over the previous years. First the FED is continuing a tightening phase which will increase financing costs, the price of industrial materials and production costs in the US has contributed to a generalized inflationary environment. The Mexican companies ath
Packaging Machinery Import Forecasts
0
100
200
300
400
500
600
2000 2001 2002 2003 2004 2005 2006/f 2007/f
Mill
ion
US$
Optimistic Realistic Pesimistic
Source: HDC Under a realistic scenario, Mexico will be importing more than US$490 million in packaging machinery by 2006. The pessimistic scenario is the result of Mr., Lopez Obrador winning the Presidential elections and creating a short term panic among local and international investors which severely affects economic variables which require a couple of years to return to
stability. Under this scenario, imports would drop by a minimum of 20%.
2.2.
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Who are the customers? For the production of this particular report, the sample of companies that were interviewed consisted of some of the largest local and multinational companies operating in Mexico. In previous reports produced form PMMI there are descriptions on the diversity of demand for packing equipment in Mexico. In this particular case, the circumstances are particularly different to those found with medium sized and small companies. Large companies are only interested in state-of-the-art technologies from leading suppliers which have a solid track record in their particular industries. In the case of multinationals, the supplier selection process is closely consulted with the corporate headquarters which in most cases provide indications on which the suppliers should be. Contrary to what might be expected in this segment there is permanent flux. Suppliers that had developed working relationships of many years are immediately replaced for others which appear or demonstrate to be more committed to offering qualified, committed and expedite service to their clients. There is also no perfect information in the marketplace. Companies believe to have more knowledge about technologies and supplier options that what they actually have. Some examples of this situation are presented in following sections of this report. The major customer segments for packaging equipment in Mexico are in order of importance, the food, beverages, consumer goods, pharmaceutical and personal care among others. The food and beverage industries represent 22% of Mexico’s manufacturing GDP. Government statistics estimate that Mexican households devote on average 30.7% of their income to food purchases. The portion of income devoted to these purchases varies by income level, being 55% in the lower economic levels and 15% in the higher income families.
Estimates show that the food industry is the largest packaging machinery buyer in Mexico with approximately 40% of the total sales in the market. The food industry in Mexico is formed by a mix of large international food manufacturers like Unilever, Nestlé, Danone, Kraft, Pillgrim’s Pride among other, several Mexican large food companies such as Bimbo, La Costeña, Herdez and Sigma Alimentos, and a very large list of small and medium sized companies that manufacture niche or regional products. According to the Ministry of Economy, there are 30,173 companies dedicated to manufacture food products. Of these, only 193 are large companies, 678 are medium sized companies and 1,388 are small. The remaining are micro companies with less than 31 employees. The Pharmaceutical industry is another significant packaging machinery buyer in the country with approximately 10% of the total demand. This sector is, as in other parts of the world, registering significant growth rates. The Mexican drugs market has grown at average yearly growth rates superior to 7% during the last three years and there is still significant room for growth as drug imports during this period have grown 21%. This sector is the most sophisticated in terms of packaging requirements and as local and international regulations become stricter, this sector represents heavy continual investments in complete lines of packaging systems. Personal care products are also an important packaging machinery buyer accounting for an estimated 10% of the demand. In this segment we also find a mix of large international companies such as Procter & Gamble or Warner Lambert who have operations in Mexico, as well as small niche Mexican companies that successfully compete against the multinational players. Packaging machinery investments in this sector are mostly caused by new products or new product presentations. As competition is strong in this trendy market, image change and product differentiation in the shelf means increasing sales.
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The beverage market is another important customer in Mexico’s packaging machinery market. This segment combines large multinational companies such as Coca-Cola, Pepsi, and very success full competitor Big Cola with Mexico’s two giant beer producers Grupo Modelo, and FEMSA Cerveza and with several other local medium sized companies fighting for a small share of these market niches. In the Mexican beverage sector we also find over 60 different water bottlers, 36 milk and milk product producers and more recently small and medium sized companies bottling specialty products such as energy drinks, coffee or tea. This market is not as dynamic as the food, pharmaceutical and personal care markets as while product presentations change in occasions and different materials are introduced to bottle, in general terms the life of each package is significantly larger than in the other segments. While some estimates indicate that this segment consumes approximately 12% of the packaging machinery sold into Mexico, the percentage is largely relative to new investments in bottling facilities and to new products introduced to the market. The remaining 15-20% of the packaging machinery demand is consumed by companies manufacturing other consumer products such as paints, car-care products, oils, manufacturers of packaging materials and containers among other.
2.3. How to win exposure. Mexican packaging machinery buyers like to be informed about new developments and product offerings in the market. They all attend to trade shows in Mexico and a smaller percentage travels to the most important packaging machinery related trade shows overseas. Some Mexican packaging machinery distributors or representatives have successfully marketed their brands and products through proactive contact with potential customers. These would include having communication by telephone; e-mail or through visits to potential customers. Some companies interviewed mentioned that European suppliers are the most noted for “being in touch” on a constant basis. Trade shows are the best way to generate product exposure for packaging machinery
in Mexico. The most important trade shows visited by Mexican packaging machinery buyers are: • EXPO PACK MEXICO & Procesa:
EXPO PACK México & Procesa have demonstrated over the last 20 years, that they are the leading packaging and processing machinery exhibitions serving Latin America, offering the best business and networking opportunities for packaging and processing professionals. At last year’s show, over 30,000 visitors from 19 countries attended EXPO PACK México in search of real solutions and technologies to enable them to attain the levels of competition necessary in the global marketplace. The next Expo Pack trade show will take place in Mexico City from June 27 to 30, 2006. For more information contact: Laura Thompson International Exhibitions Manager Packaging Machinery Manufacturers Institute (PMMI) 4350 North Fairfax Drive, Suite 600 Arlington, VA 22203 USA Telephone: (703) 243-8555 Fax: (703) 243-8556 Email: [email protected] Internet: www.pmmi.org Guadalupe Olvera OPREX EXPO PACK México/PROCESA Berna No. 6, Piso 7 Col. Juarez 06600 Mexico D.F. Mexico Phone: (5255) 5241 0400 Fax: (5255) 5514 3110 E-mail: [email protected] Internet: www.expopack.com.mx
• Expo AMF Pharma:
Expo Pharma is the largest show for the pharmaceutical industry in Mexico. The last show held in March 2006 had 194 exhibitors and 10,100 visitors. Several packaging machinery manufacturers specialized in pharmaceutical product packaging exhibit at this show and a great number of decision makers attend to learn about industry trends and new product offerings. The next Expo Farma will take place in the World Trade Center in Mexico City during the last week of March 2007. For more information contact:
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Lucia Huerta Mexican Pharmaceutical Association. Adolfo Prieto 1649, 6° Piso, Col. del Valle, México D.F., C.P. 03100. Telephone: (52-55) 9183-2060 Fax: (52-55) 5688-2069 E-mail: [email protected] Internet: www.afmac.org.mx
• Pack Expo: Due to Mexico’s geographical proximity to the U.S. a large number of Mexican packaging machinery buyers attends to Pack Expo in Chicago or Las Vegas as they consider that this show has a broader showcase of machinery than the Mexican show, however we recommend PMMI members seeking to expand their presence in Mexico to exhibit at the Mexican show also as this last also reaches the small and medium sized companies that represent a very large share of the market. The next Pack Expo show will be held October 29 - November 2, 2006, at McCormick Place, Chicago, IL, USA and will feature more than 1,600 exhibitors and cover more than 1.2 million square feet of exhibit space.
There are several other specialized shows where packaging machinery manufacturers exhibit their products in Mexico. The most important being: Expo Alimentaria: Food products, June 6-8, 2006. http://www.alimentaria-mexico.com/es/global/portada.htm • Expo-Pan: Bakery and bread products,
August 12-14, 2006. http://www.conexpro.com.mx/
• Beberexpo: Beverages, February 2007, http://conexpro.com.mx
After trade shows, Internet is the second most important tool to give product exposure to packaging machinery. Some companies interviewed mentioned to “surf the web” searching for potential suppliers of specialized equipment. Most Mexican companies mentioned to approach PMMI or the Mexican Association of Packaging (Asociación Mexicana de Empaque y Embalaje) as sources for obtaining information on potential equipment suppliers. PMMI and AMME are very good tools for increasing product exposure in Mexico.
Another element for creating additional product exposure for packaging machinery is by advertising in trade Magazines. Most companies indicated to review these publications regularly and to use them for finding and selecting new potential equipment suppliers. The most widely circulated trade magazines – relevant for packaging machinery- are, in addition to publications distributed by local chambers, the following: Reportero Industrial - Monthly Publisher: Reportero Industrial Mexicano, S.A. de C.V. Tel: (5255) 5605-9962 Fax: (5255) 5605-0056 Circulation: 28,000 Audience: Manufacturing companies. Internet: http://www.reporteroindustrial.com.mx Manufactura - Bimonthly Publisher: Expansion, S. De R.L. De C.V. Tel: (5255) 9177-4178 Fax: (5255) 5093-2602 Circulation: 115,000 Audience: Manufacturing companies. Internet: www.manufacturaweb.com/
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3. Who are the Competitors?
3.1. Leading Packaging Machinery Suppliers.
Mexico’s packaging machinery market continues to be dominated by imports which satisfy from 80% to 85% of the total demand. Mexican production has increased and improved its quality in recent years, but continues to be a small fraction of the supply in the market. Mexico is an attractive investment destination for foreign companies investing in producing equipment in Mexico, as it offers labor savings over NAFTA and European Union countries as well as provides duty free access 32 countries including the US, Canada and the European Union. The packing machinery suppliers can be segmented in three groups: The leaders: This group is comprised of Italy, Germany and the United States. These three countries supply 75% of the total Mexican market. The market share participation in this group has changed and leading positions shifter over the past few years. The US’ market leadership was maintained until the late nineties, followed by fast erosion which began with the undervaluation of the Euro, continued with the opening of the Mexican market to free trade with Europe and has continued through the strengthening of the perception that Europeans are technology leaders in Packing Machinery. By end of 1998, the U.S. remained as leader controlling 44% of the imported packing machinery market followed by Italy with a 21% and Germany with 15%.
On July 1999 Mexico entered into a free trade agreement with the European Union that contemplated a rapid phasing out of import duties for European products entering Mexico. Almost half of all packing machinery could enter Mexico free of duties immediately upon the signing of the agreement and the rest has seen progressive tariff elimination and became duty free in January 2004. The signing of the free trade agreement had additional effects, especially interesting for European suppliers in this market. As trade between Mexico and the EU began to grow, shipping companies started expanding their services into Mexico. Coinciding with all these developments, the EU introduced the use of a single currency, the Euro which depreciated form levels of US $ 1.15 per Euro to levels of under US$ 0.85 in late 2000. This steep depreciation made European equipment relatively less expensive to that of US based suppliers. A combination of factors that included tariff reductions or elimination, a significant depreciation of the Euro against the US dollar and improved transport services to Mexico, and a strong focus in developing market share in Mexico, initiated the challenge to the US’ leadership in Mexico’s imported packaging machinery market. During 2003 and 2004, with the benefit of a depreciated Euro, Italian and German suppliers undertook an aggressive and proactive market development program in Mexico. Through these efforts and in spite of a significant appreciation of the Euro, by 2005, Italy became the leading supplier of packing machinery to the Mexican market. By the end of 2005, Germany also exported more packing machinery to Mexico, placing the US in a third place. Packaging Machinery Imports by Origin 2005
25%
25%22%
4%
5%
7%
1%2%3% 2%2%2%
United States Italy Germany France
Spain Sw itzerland Japan Sw eden
Canada United Kingdom Brazil Other
Packaging Machinery Imports by Origin 2000
39%
13%
9%3%2%1%
4%
1%
2%
1%1%
24% United States Italy Germany France
Spain Sw itzerland Japan Sw eden
Canada United Kingdom Brazil Other
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Italian packaging machinery manufacturers took advantage of the undervaluation of the Euro to enter and expand their presence in the Mexican market, but they also developed service, financing and integration schemes that are now showing that they came to market to stay. During 2005 the Euro appreciated in a very significant way and despite of this, demand of Italian machinery remained high and grew 19% with respect to 2003. Several companies interviewed for the production of this report indicated that while Italian machinery has become significantly more expensive than two years ago, it is still price competitive versus American machinery, in many cases is more flexible and customizable than American and their service and financing packages are in many occasions what makes the difference to select them over American machinery. The case of Germany is different, this country continues to have an important market share due to their image, prestige and full-line machinery offerings, and however the appreciation of the European currency is making buyers to turn their eyes to other countries as their prices have become significantly higher. German exports to Mexico during 2003 grew only 2% when the overall market grew more than 30%. American packaging machinery is well perceived and accepted in the Mexican market, however some users consider that American machinery is designed for large-scale production and does not offers the needed flexibility to re-configure for packaging different products. In general terms American packaging machinery is preferred by large manufacturers from the food and personal care industries, but not so much for pharmaceutical products or by small companies of any of the key industries. As product differentiation is increasing in all sectors, flexibility has become a packaging need in all segments. Growing Competitors: This layer is occupied by suppliers from a variety of countries with highly competitive manufacturing industries such as France, Spain, Canada, Switzerland and Japan, and by other countries what are not recognized as technological leaders but that are
winning market share by offering low prices, such as Brazil and Mexico. French packaging machinery is having good acceptance in the Mexican market, they are perceived as more technologically advanced than Italian manufacturers and offering the same flexibility. France controlled 8% of the packaging import shares during 2003 and it has maintained continuous growth in the last five years. While the appreciation of the Euro has also made French machinery relatively more expensive than two years ago, it is considered to be fairly priced. Spain is another growing competitor in Mexico, a large number of large players in Mexico’s food industry have family links to Spain and they prefer to work with Spanish companies before other European players. The language factor is also a plus for these suppliers as they supply instructions and provide training and service in the same language. Spanish packaging machinery is perceived as of similar quality and flexibility to Italian and is well suited for small production volumes and can be easily adapted to pack different products.
Top Five Packaging Machinery Exporters
-
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005
Mill
ion
US$
United States
Italy Germany
France Spain
Source: HDC with data from Bancomext. Japan is another competitor that would be worth to look at. Imports of Japanese machinery do not represent an important share of the market but their presence in Mexico is expected to increase in 2004 as Mexico signed a free trade agreement with Japan that includes the elimination of tariffs for packaging machinery immediately. Japanese machinery is perceived as technologically advanced, offering good electronics to replace costly and non-efficient mechanics and is also competitively priced. With the tariff elimination Japanese suppliers will be able to offer prices that are 15% to 20% lower than in previous years. In this market segment we also find new competitors that are increasing their market
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presence with low-price strategies despite of not being perceived as technologically advanced. Brazilian packaging machinery exports to Mexico have grown from US$2 million in 2000 to US$10.9 million in 2003. Brazilian packaging machinery manufacturers selling in Mexico mention that they use European technology and economic Brazilian labor, so they are able to offer the same benefits of European manufacturers at significantly lower prices. Small Players: The third layer includes those countries that have less than 2% share in the market. In this category we find some interesting statistics such as the 572% growth rate of
China, who was able to sell US$2.4 million to Mexico in 2004 from less than US$500,000 the previous year. Taiwan achieved growth for its fourth consecutive year and reached US$2.9 million. China has not become a player in this market and remains selling less than US$500,000.
3.2. Customer’s Perception by Origin.
While there are different types of manufacturers, producing different types of machinery in each country, in general terms the buyer’s perception by country of origin is as follows:
Customers perception by Country of Origin
Country Pros Cons Italy Flexible, Reliable, Good Service,
Financing Small volumes, weak construction.
U.S.A. Technologically Advanced Superior Engineering. Durability. Spare parts available fast avoiding down-times. Suitable for large-scale production. Fairly Priced.
Excessive components due to American safety regulations that in some cases not apply to other countries. Rigid format, requiring tooling and important down-times for adapting to pack different products. Not suitable for low-speed or small volume production. Rigid sales policies and unwillingness to negotiate terms.
Germany Technologically Advanced Superior Engineering. Durability. Integrated lines. Suitable for large-scale production. Especially strong in the pharmaceutical industry.
Expensive. Not suitable for low-speed or small volume production. Spare parts difficult to obtain. Limited and expensive local service. Slow response to customer’s needs.
France Combines flexibility with technology. Suitable for small or large scale production volumes. Fairly Priced. (in some cases expensive due to currency) Access to financing.
Spare parts practically not available in Mexico. Difficult to integrate with machinery from other countries. Limited and expensive service. Strict sales policies.
Spain Custom-engineered solutions. Same culture and language facilitates personal relations. Competitively priced. Excellent service and support. Access to Spanish Export Credits.
Rigid sales policies. Low Durability. Very fragile. Do not offer integrated solutions and often require complementing the line with other brands.
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Brazil Developing significant presence in bagging machines for Snack applications. Leaders including Martin Cubero consider them as unparalleled options.
Purchased through Argentinean distributors. Need to wait weeks for service or repair.
Taiwan Very low end segment of the food industry. Migrating to mid market. Not present in major or multinational Companies.
Low reliability. Deficient operation manuals
China Not yet present in largest and multinational companies
Mexico Becoming significant player in: Form, fill and seal, cartoning machines High-speed labeling machines Conveyors
Deficient control motherboards
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3.3. Are European, Asian or Latin American suppliers going to control the Mexican packing machinery market?
The growing presence of European packaging machinery suppliers in the Mexican market could suggest that American packaging machinery suppliers are increasingly less competitive and Mexican customers have shifted their preferences to other types of machinery or to other countries offering what is being perceived as better alternatives and sales conditions. The statistics seems to confirm this argument, but those numbers do not show that apparently the interest of US suppliers to aggressively pursue opportunities in the Mexican market has declined and continues to decline rapidly. Under these conditions it is very difficult to pass judgment on European suppliers offering better alternatives than US suppliers. Declining market share in Mexico by US suppliers seems to result from the abandonment of proactive selling in the Mexican market more that to a quantum leap on technology, equipment and options offered by Europeans. There is no presence of Asian suppliers among the companies selected on the list of
largest local and multinational companies that was selected for this report. The consensus is that these suppliers continue to compete in price that their technologies are improving, but that they are still a few years away from offering machinery that would compete on technology and quality in addition to its current sales point which is only pricing. There was not a single company indicating that their packing machinery supplier had shifted production to Asia, specifically China, to reduce production costs of the equipment. It is important to note that Mexico continues to protect its market from countries with which it has not subscribed a free trade agreement. China is included in this list and would face minimum import duties of 20%. There is noticeable export growth from Brazilian packing machinery suppliers to Mexico and a series of Mexican companies are considering that Brazilian machines present very solid and competitive alternatives. The US remains as the leader in installed packing machinery capacity in Mexico. If imports of new machinery and spare parts are combined into a graph, the result shows a tie between Italy and the US as the leading suppliers into the Mexican market. The difference is that while Italy is supplying new Machinery, the US as supplying spare parts to its installed machinery in Mexico.
Top Five Packaging Machinery Exporters
-
20
40
60
80
100
120
140
160
2000 2001 2002 2003 2004 2005
Mill
ion
US$
United States
Italy Germany
France Spain
Source: HDC with data from Bancomext.
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Germany is the large supplier that achieved the highest market share growth in the imported packing machinery market in Mexico during 2005. German packing machinery export growth to Mexico reached 20% during 2005. The export value of European packing machinery has surpassed US export value. In the previous graph, the values include US spare parts. Italy continues to be the leading supplier of imported packing machinery in Mexico, a position it reached since 2002. Other European countries including Spain, Switzerland, Sweden and France are also starting to develop noticeable market share in Mexico. In relation to Asia, countries such as Taiwan, Japan or China have very small shares in the Mexican packaging market. The Free Trade Agreement with Japan will allow suppliers from this country to offer competitive pricing, and this country could win important market share in the near future. As for China and Taiwan, only a very small percentage of Mexican companies would purchase equipment from these countries as packaging machinery are investments that remain for the long term and the perception of these manufacturers is not related with quality and durability at present. If quality from Asian machinery improves and these countries offer significant savings in both, the cost of the machine and the operational costs, they could win some market share but nothing to challenge the 10 largest at least in the following two years. Brazilian suppliers are beginning to develop a small but constant presence in the Mexican market. As Mexico and Brazil have not subscribed any commercial agreement, these products are subject to import duties ranging from 10 to 20%.
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4. SWOT Analysis for PMMI members:
4.1. Strengths. The U.S. has long tradition and reputation in Mexico’s packaging machinery market. U.S. machinery is perceived as of high quality, reliable, and efficient. Training and customer support are considered adequate. U.S. suppliers have the geographical and time zone advantages over European suppliers American machinery is perceived as highly efficient and fast especially for large-scale production volumes. Dollar denominated machinery currently has a competitive advantage versus other currency denominated machines.
4.2. Weaknesses. Poor penetration in the pharmaceutical and beverage industries, which have been dominated by German and Italian suppliers as American manufacturers offer partial solutions and not integrated lines. American packaging machinery lines are in most cases rigid and standardized, lack of customization and flexibility are considered as the most important weaknesses of American manufacturers under present conditions. Service packages not included or not offered as part of the negotiation. Don’t offer manufacturer financing and tell the customer that he should approach Exim Bank. Production scales are different in the U.S. than in most parts of the world.
4.3. Opportunities. Significant appreciation of Euro, CD$ and most currencies vs. US$. U.S. manufacturers and their local distributors or representatives should
consider offering service packages to their customers. Cost for this service can be included in the pricing of the machine or charged separately. (Not set-up or initial training). Service packages help strengthen relationships with clients and customer confidence in the long term reliability of the equipment being purchased. U.S. manufacturers could stop loosing customers by being more flexible in payment terms or by offering to match other financing options offered by the competition. U.S. manufacturers could stop loosing customers by being more flexible in payment terms or by offering to match other financing options offered by the competition. U.S. packaging machinery manufacturers should exploit advantages of high-volume machinery to maintain and penetrate large accounts in the Mexican market.
4.4. Threats. European suppliers are expanding product lines to reach new markets. This could to cause American suppliers to begin loosing larger accounts to Italians who continue developing ties with several companies in Mexico. Japanese machinery can follow a similar beneficial path as European due to free trade agreement. European suppliers are strongest in small operations but are expanding product lines to reach new markets. This could cause that American suppliers begin loosing large accounts in front of the Italian who have developed ties with several companies in Mexico. Mexico’s policy to open to international markets has created a highly competitive environment which could be saturated by new market entrants. Japanese machinery will enjoy a 10-20% duty reduction beginning in 2005, this factor will most likely create increased trade and investment between the two economies and new Japanese suppliers will seek to expand their market to Mexico. This could also happen in the short term with Brazil and in the longer term with other Asian countries.
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5. Recommendations for PMMI Members:
No more NAFTA benefit other than geography and time-zone. Europe and now Japan have free trade access to Mexico. The next move will likely be more flexibility with Brazil. Dollar value is declining rapidly and could present short-term opportunity. Concerns on US inflation and impact on packing machinery costs Re-visit lost accounts. Dollar devaluation presents solid excuse for re-initiating a dialogue. Offering solutions that better fit production scales, financing options and flexibility in payment schedules are key elements European suppliers used to significantly strength their presence in the market. These factors have become key sales drivers for the Mexican market. Strengthen relationship with client and when possible, develop a local presence. Assist in structuring financing, Invest in developing a relationship with the client, either directly or through your local representatives. Time to be proactive, aggressive and creative. Developing an effective and professional presence in the market, honor guarantees and offer equipment servicing are fundamental, as the number of companies willing to purchase from suppliers without a formal presence in Mexico is fast disappearing. Marketing and promotion are critical: very important to participate in trade shows and industry events in target country, best way to demonstrate a presence commitment to potential clients and to evaluate competition active in the market. American manufacturers have the advantage of having geographical proximity and similar working hours. Mexican corporations enjoy receiving visits from foreign experts to their manufacturing facilities. These visits also help your distributors to develop relationships with plant managers and company owners that are later involved in decisions.
The packaging machinery industry in Mexico, as in other parts of the world is rapidly moving towards integrating electronic components with existent mechanical technology. New state-of the art electronics are enabling packaging machinery to be more flexible, more productive and easier to maintain over the long term. Upgrading existing equipment to feature electronic control devices could be a good way to better compete against the highly flexible machinery that Italian and Spanish manufacturers are offering in Mexico. Those manufacturers that remain only including mechanical parts will also find a market niche in Mexico, among small and medium sized manufacturers, but the costs of these machines need to be extremely competitive to be selected versus Mexican or Brazilian manufacturers.
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6. The Food Industry:
6.1. Industry Overview. Mexico is the 11th most populated country with approximately 106 million people, the economic stability that the country has enjoyed in the last few years combined with a population growth of 1.6% per year, increased demand for food products at a faster pace than economic growth. The demand for food products in the Mexican market covers a very wide range from basic grains and pulses needed to provide basic nutrition to a large portion of the population, to growing demand for pre-cooked and frozen ready-to-eat products and to gourmet varieties. One segment presenting fast demand growth is convenience food, where the leading products include pre-cooked dried pasta soups. These types of products have been quite successful and several food companies in Mexico are entering this market. The growing demand for these products (30% per year), is explained
because they address the need for an affordable and easy way to enjoy a meal. As Mexico opens to a wider number of international markets, growing market sophistication, segmentation, and competition are also creating demand for functional foods and original packages as a strategy for product differentiation. The food and beverage industries represent 19% of Mexico’s manufacturing GDP. Government statistics estimate that Mexican households devote on average 30.7% of their income to food purchases. The portion of income devoted to these purchases varies by income level, being 55% in the lower economic levels and 15% in the higher income families. The Mexican food industry (excluding beverages, beer, coffee and tobacco) is estimated at over US$57 billion during 2005. Sales of the 31 most important food companies with operations in Mexico represented US$23.8 billion in 2004 Average growth of this sector has been 3.7% per year over the past three years.
Composition of Mexico's Food Division of the Manufacturing GDP
Wheat Milling
Corn Milling 10.7%
Alc. Beverages
8.7% Beer Malt 8.4%
Preparation from Fruits and
Vegetables 5.1%
Tobacco 2.9%
Edible Oils-Fats 3%
Sugar 3.5%Beverages 12.0%
Other Food Products 19.1%
Meats and Dairy Products 21.1%
1.8%
Coffee 1.8%
Animal Feed 1.7%
Source: Ministry of Economy.
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6.2. Company Ranking by Size.
easiness to integrate to their
e capabilities of theork with various products. These
companies requ xibility as their operation s and different
layers.
193 large companies represent only one percent of the total number of food companies registered in Mexico, however these companies control over 90% of the market in terms of sales. According to the Ministry of Economy, there are 30,173 companies dedicated to manufacture food products. Of these, only 193 are large companies, 678 are medium sized companies and 1,388 are small. The remaining are micro companies with less than 31 employees. Large Mexican food companies operate in similar way to large food companies from America. The packaging machinery procurement process is a formal process where companies analyze not only the cost of the machinery itself, but they also analyze costs of raw materials, supplies, electricity, andcurrent CNC equipment. In this market niche, American manufacturers are highly competitive, but some companies consider that the rigidness and lack of flexibility of American machines are making them turn their eyes into other machinery that is easier to reconfigure for packaging various products. Small and medium sized companies in Mexico have less formal purchasing processes; they basically select the supplier based in the lower initial investment costs and thw
machinery to
ire high flemall volumes are s
products in many cases.
6.3. Key P
key players in the food industry nals in the
anone, PepsiCo’s Frito Kraft, Nabisco, Conagra Foods,
of
exico.
oup includes the large Mexican
pastry manufacturer and lls over US$5 billion in food products.
mentos is the Mexican version of
S$1.3 Billion. rupo Herdez and the growing company
ico’s canned food roducts market with sales over US$500
classified by sales, and the overnment statistics indicate there are 193 od companies with 500 or more mployees. According to industry experts, f those only 50-70 have sales of more than S$100 million.
the second step of the government’s ompany classification, we find 678 ompanies with between 100 and 500 mployees and 1,388 with between 30 and 00. These 2,066 companies represent a ery important packaging machinery otential market, as in general terms they gister significantly higher growth rates an the large corporations.
hese companies require high flexibility and conomic machinery.
ccording to the Expansión Magazine’s top test 500 Mexican companies list, the llowing are Mexico’s largest food
ompanies:
Mexico’s include the largest multinatioindustry, including DLay, Nestlé, Pilgrim’s Pride, Tyson, Unilever and many
who have billions worth others, investments in M A second grfood companies, headed by BIMBO, thebox-bread and who seSigma Ali
Kraft Foods, manufacturing a wide variety of products and growing through a combination of new investments and acquisitions inclusively in U.S. This company sells more than UGConservas la Costeña fight for the leadership in Mexpmillion each. There are no official figures of Mexican food companies gfoeoU Incce1vpreth Te Alafoc
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Mexico’s Largest Food Companies
Company Main products Sales 2004Million US$
Grupo Industrial Bimbo astries, snacks. 4Bread, p ,873Nestlé México Milk products, chocolates, cereals. 2,460Grupo Maseca 2Grain Mill ,363Grupo Industrial Lala Milk products 1,947Sabritas Snacks 1,427Sigma Alimentos Corporativo 1Various Food products ,337Industrias Bachoco Chicken 1,253Gamesa Cookies, bread, pastries, snacks 946Ganaderos Productores de Leche Pura 7Milk products 44Gruma Grain Mill 626Grupo Herdez Canned products 515Grupo Viz Chicken 514Grupo López (La Costeña and Sabormex) Canned products 496Pilgrim's Pride Chicken 447Desc Canned Products. 432Liconsa Milk products. 409Kraft Mexico Milk and cheese products. 371Alsea Food franchises. 339Grupo Altex Grain Mill 329Grupo La Moderna Pastas 322Beta San Miguel Sugar 307Gru cts 269po Bafar Meat ProduMinsa Grain Mill 212He ocolates 201rshey México ChGrup 149o Azucarero México Sugar Grupo ricultural Products 143Savia AgProduc aby Food 114tos Gerber BGrupo gricultural Products 73Ceres AConagr ned Products 37a Foods CanMar Peanuts and Snacks 36tín Cubero Cho l Chocolates 35co atera de Jalisco Gru atural food products 34po Nutrisa N
Source: Expansión Magazine, Mexico’s top 500 companies.
.4. nds.6 New Packaging Tre Some of the most important packing trends in Mexico’s food industry include:
• Most companies are incorporating a squeezable presentation for their condiments.
• There is growing interest in developing packaging to protect the products, especially for baked tortillas, sweet rolls, cookies and any product which the consumer might reject because of damage in handling or display.
• Canned liquids shifting into tetra-pack.
• Interest in machinery to manage promotional products during the packing process.
• Growing use of aluminized foils for cookies and snacks.
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6.5. Company Profiles.
Barcel, S.A. de C.V.
Industry: Food Sub Industry: Snacks Location: Toluca, Mexico Size: (sales) US $ Over 450 million Purchasing Potential:
US $ 1.5 million
Specific Business Opportunities:
Weighing and Bagging Machines
A) Company Description Barcel is the second largest snack producer in Mexico, following Sabritas, which is owned by Frito-Lay. Barcel began operations after the acquisition from Kellog’s of a plant in Queretaro in 1977 and has increased production capacity through the acquisition of additional manufacturing facilities to respond to increasing product demand. The company acquired 2 more plants, in 1982 and 1990, one in Gomez Palacio, Durango and the other in Lerma , state of Mexico. The company operates additional manufacturing facilities in the states of Hidalgo and Yucatan. The company is a subsidiary of grupo Bimbo and exports close to 17% of its production into the US, European, Central and South American markets. B) Main Products Produced and how are they packed: The company produces a wide variety of snacks, including potato chips, corn flour chips, various types of peanuts, coated peanuts and pork rind type, among other snacks.
Product Brand Package Tortilla chip Takis Aluminized Bag, BOPP-Met Tortilla chip Chipotle Aluminized Bag, BOPP-Met Tortilla chip Tostacho Aluminized Bag, BOPP-Met Flour cooked chips Runners Aluminized Bag, BOPP-Met Tortilla chip Churritos Plastic Bag, BOPP-BOPP Flour cooked chips Quechitos Plastic Bag, BOPP-BOPP Fried potatoes Chips Aluminized Bag, BOPP-Met Low fat fried potatoes Patatinas Aluminized Bag, BOPP-Met Peanuts and covered peanuts. Hot Nuts Plastic Bag BOPP-BOPP Low fat fried potatoes Paprizas Plastic Bag BOPP-BOPP Low sodium chips Natural Aluminized Bag, BOPP-Met
C) Installed Packing Machinery Barcel has over 120 packaging machines, most of those for packaging in plastic and aluminized plastic bags. The company uses state of the art technologies for process automation and quality control. Some of the most important packaging machines installed in Barcel include:
Current Machinery Used Brand Units Origin Average Age Specification Weighing and Bagging Machine/ Pacer, Commander
Woodman 5 USA 11 85%
Weighing and Bagging Ishida 10 Japan 3 85%
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Machine/ Ishida, Apex Weighing and Bagging Machine/ Ishida, Atlas
Ishida 1 Japan 1.5 85%
Weighing and Bagging Machine/ Yamato, Cyclone
Woodman 10 USA 3 85%
Bagging machines Matrix 5 USA 1 90% Horizontal bagging machines N/A 15 Spain 2 90% Volumetric Batching and Wrapping Machine
Embaflex 1 Mexico 2 85%
Bagging Machine Matrix 1 USA 1.5 85% Labeling Machines Marken 76 USA 8 90% Coding Machines Dominos 10 USA 4 80% Carton forming machine Pearson 1 USA 4 80%
In addition to this brief list, the company has several machines for palletizing, vertical and horizontal filling machines for solids (dosifyers), form, fill and seal bagging machines, metal detectors, labeling, codifiers, and weighing machines, among other. Barcel had no experience purchasing European packaging machinery, although their sister company Ricolino ( also subsidiary of Grupo Bimbo) uses some European machines, specifically from Germany and Holland. They have a continuous manufacturing process with machinery working at an average of 85%. Barcel was satisfied with their machines, especially those supplied by Japanese and American companies, but in recent years there has been a significant shift in preference for European suppliers. They consider these machines as more efficient, precise and cost effective, especially in the area of horizontal bagging machines. The company considers that US suppliers have been left behind in the introduction of new technologies into their machinery. D) Last Packaging Machinery Purchase Barcel’s last packaging machinery purchase was in December 2005 when they acquired 2 Horizontal Bagging Machine from a European supplier.
Machinery Brand Country Cost (Approximately) Vertical Bagging machines Matrix USA $ 125,000 each Horizontal Bagging Machine N/A Spain $ 145,000 each
E) Future Packing Machinery Ordering Plans. 2004-2005 Barcel will initiate the selection process for the purchase of 4 or 5 horizontal weighing and bagging machines. This purchased is planned to increase production at their plant in the state of Mexico. The company has not decided on the supplier but indicated they are satisfied with their last purchase of a similar unit from a European supplier. The company will also purchase during 2006, the auxiliary equipment to complement the packing lines, such as coding machines, palletizing units, box form, fill and seal machines, thermo shrink units, and other equipment.
Machinery Units Origin Motive of Purchase Estimate Budget Weighing and Bagging Machines TBD T.B.D Increase in production $1.5 million dollars F) Purchasing Policies and Financial Arrangements Barcel buys most of its equipment directly from the manufacturers. This company purchases spare parts from some distributors or representatives established in Mexico. Barcel has its own specialized engineering staff in charge of the regular maintenance for each plant. When they purchase new machinery, they request the supplier to provide training to its technicians.
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If a major equipment problem occurs in one plant, the company requests the manufacturer to send specialized technicians to repair the machine, if the problem is recurring and affects productivity, the company initiates the process for replacing the equipment and black lists the supplier which was not capable or interested in solving the problem. G) Factors that Influence Purchasing Decisions 1.- Efficiency 2.- Price 3.- Service and spare parts availability 4.- Mechanical quality 5.- Low waste of wrapping material H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. Origin Technology Flexibility Service Price United States Good Good Good Regular Japan Very Good Very Good Good Regular Spain Very Good Very Good Very Good Good Brand: Matrix Strengths Weaknesses Easy to operate Spare parts availability in México Low Maintenance Lack of trained local rep. Very Exact I) New Origin of Suppliers from Asia. The company indicated they have recently received a series of visits and sales calls from Chinese and other Asian packing machinery suppliers. The company indicated that even while pricing is very attractive, the company would not purchase from companies that have not developed significant reputation within the snacks industry. J) Trade Show Attendance / Trade Publication Information Medium and high ranking engineers in Barcel, go to ExpoPack in Mexico City as a way to learn about new technologies that might satisfy specific needs. High ranking engineers and management travel abroad to different packaging and snack expositions, the most significant being ExpoSnack, held in March or April in the US. K) Specific Interest Barcel is interested in receiving information on PMMI’s members, especially from those that manufacture high speed bagging machines that are able to integrate or work with weighing machines of different brands and different origins. They also want to receive details on laser codifiers, cartooning and dispensing machines. L) Contact Information Company Name: Barcel, S.A. de C.V. Contact: Ing. Espiridion Valdéz Position: Engineering Director Address: Carretera Mexico-Toluca Km. 54 Col. Industrial Lerma Edo. De México, 52000 Telephone: (52722) 2791155 Fax: (52722) 27911690 e-mail: [email protected] , [email protected] Web page: www.barcel.com.mx
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Conservas La Costeña, S.A. de C.V.
Industry: Food Sub Industry: Canned and bottled foods, sauces,
condiments, beans, olives, vinegar, jellies, and other food products and condiments.
Location: Mexico City Size: (sales) US $ 290 million Purchasing Potential:
US $ 2 million for 2006
Specific Business Opportunities:
Wrapping Palletizers Cutting machines Labeling machines Codifying machines Closing machines Washing machines
A) Company Description La Costeña is a 100% Mexican company that was established in 1923. It is the Mexican leader in the production of canned hot chili peppers and preserved foods. The company is focused on a continuous quality improvement program and has achieved all international certifications. La Costeña today exports its products to the United States, Central and South America, Europe and a long list of countries around the world. The company has two major plants with fully automated processes. The company is divided in 3 production areas: the hot chili peppers line, other product line and canned products. The Tulpetlac (Mexico City) facility manufactures mostly cans of Jalapeno peppers. The canned and bottled products include hot peppers (jalapenos), sauces, re-fried beans, olives, tomato sauces, jellies, mayonnaise, etc. The other product lines are those packed in plastic or glass bottles. These production areas include 46 different product presentations. About 60% of the company’s business comes from the canned foods segment. La Costeña manufactures its cans for all its products. The mole (base paste made from hot spices) and Nopal (cactus leaves) cans are manufactured at the Condimex plant in San Luis Potosi a sister company of La Costeña. With the continuous modernization of its facilities the company has achieved a successful performance in the market and has been able to increase its market share worldwide. The company exports about 25% of its production to over more than 30 countries. B) Main Products Produced and how are they packed As indicated, the company manufactures over 46 different products, the most important are:
Product Brand Package Hot peppers in vinegar La Costeña Can: 1/8 , ¼,½, 1, and 3 Kg. Chipotle Peppers La Costeña Can: 1/8, ¼ ,½ and 3 Kg. Beans La Costeña Can: ¼, ½ and 3 Kg. Ketchup La Costeña Plastic and glass bottles: ¼,½, 1, and 3 Kg. Mayonnaise La Costeña Squeezable pet bottle of ¼ and ½ Kg, and glass
bottles of ¼, ½, and 3 Kg. Tomato sauce La Costeña Squeezable pet bottle of ½ and glass bottles of ¼,
½, and 1 Kg. Hot Sauces La Costeña glass bottles of ¼, ½, ¾ and 1 lt.
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Seasoning sauces Doña Chonita Combi Block (Carton) Olives La Costeña Glass bottles: ¼ and ½ Kg. Vinegar La Costeña Pet bottles: 1 Lt. Apple puree La Costeña Can: ¼ Kg Apple puree La Costeña Can: ¼ Kg Rice La Costeña Can: ½ Kg Marmalades La Costeña Glass bottles: ¼,½, 1 and plastic container of 25 KgMole, smashed tomato, ketchup sauce
La Costeña Convi Block various sizes ¼, ½ and 1 and 3 lt.
Peppers La Costeña Polyethylene-aluminum laminated bags. C) Installed Packing Machinery The following table presents the installed packing machinery at the Tulpetlac and Guasave plants. La Costeña is planning to increase this year their canned production lines to 19 lines. The following table shows the machinery at the three main production areas in la Costeña: The hot pepper production line, canned products, and other products. The last area uses the largest variety of packaging presentations. Current Machinery Used Brand Units Origin Average Age Specification
Labeling machines New Way 19 US 12 85% Carton form machines Cermex 5 Holland 2 90% Carton fill and seal machines Cermex 5 Holland 2 90% Transporting box system Stork (CSI) 18 Holland 8 90% Pallet forming machines Stork (CSI) 14 Holland 20 90% AGV Automatic Guide Vehicle Digitron 7 Switzerland 8 80% Wrapping plastic film machines
Signode 1
France 10 85%
Wrapping plastic film machines
N/A 1 US 6 85%
Filling piston machines Elmar 25 US 12 80% Labeling machines Auxienba 12 Spain 15 80% Pallet forming machines Stork 2 Holland 8 90% Closing Machines. These machines have been changed because of quality reasons.
Angelus 20 US 15 90%
Wrapping and form machines Cermex / Sidel
4 France 2 90%
Coding machines for cans Image 19 US 8 85% Coding machines for boxes Image 16 US 8 85% Filling machines Zolberin 13 US 7 90% Filling machines Zacami 4 Italy 8 90% Closing cans machines Ferrum 6 Switzerland 8 90% Sterilizing machines In-house 18 N/A N/A N/A Filling machine for semi viscous. (marmalade)
EMA/Sidel 2 France 2 95%
Filling line for Conviblock Conviblock 1 Holland 4 95% Filling machine Bosar 1 Spain 2 95% Palletizing lines OCME 8 Italy 2 95% Case / Tray form (plastic), fill and seal machines for marmalade, sauce and vinegar.
N/A 2 Spain 2 90%
Capping Machines for plastic bottles
N/A 6 Various 4 90%
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D) Last Packaging Machinery Purchase La Costeña’s last packaging machinery purchase was in 2005 when they acquired 4 pallets and 4 wrapping machines from Cermex. They also purchased closing and labeling machines, as well as sterilization towers from Stork (CSI).
Machinery Brand Country Palletizing Machines Cermex Holland Closing Machines Stork (CSI) Holland Sterilization Towers Stork (CSI) Holland
The purchase was the result of the company’s need to expand production capacity and improve process efficiency. The company commonly purchases equipment directly form the manufacturers. Over the past two years, the company has initiated a process for replacing Stork equipment with Cermex. Some of the machines being replaced include wrapping machines, carton form machines and cartoning and seal machines. The company considers that switching to Cermex in improving efficiency. The company had been working with Stork for over ten years and considers that some of their equipment continues to represent superior options in areas like closing machines, pallet forming and material transporting machines. The replacement of certain machines from this supplier is an indication that La Costeña is always looking for incorporating more efficient machinery. La Costeña’s maintenance policies are focused on having an in-house technical staff and provide direct maintenance for their machinery. The maintenance capabilities include the possibility to manufacture some spare parts in their own shop. About 50% of the spare parts are original spare part products which are bought directly from the manufacturer. Through agreements with some of their packaging machinery suppliers, La Costeña has been able to negotiate technical support services; additionally, the company’s employees also receive special training for the equipment’s operation and maintenance. Around 20% of the maintenance jobs are made by a third party. The company only uses outside technicians when the equipment is very complex and sophisticated and a major problem has occurred. E) Future Packing Machinery Ordering Plans. La Costeña’s purchasing budget for packaging machinery in 2006 will be around 2 million dollars. The strategy that La Costeña is using is the same as other years: increase efficiency of the production process. The company is focused on complete automation. Their philosophy has always been to permanently incorporate state-of-the-art technology as a strategy to assure unparalleled efficiency. They are open to learning about new technologies and machinery and to analyze new potential equipment suppliers, only if they are able to meet the company’s standards and goals. One of their main requirements is that new equipment must be compatible with their existing lines. The next table shows their future short-term packaging purchases:
Machinery Units Origin Motive of Purchase Estimate Budget Pallet Forming 1 Stork
(CSI) Replacement 250,000 Euros
Material transport machines 2 Stork (CSI)
Improve material transportation
200,000 Euros
Tray forming machines 4 Cermex Improvement 300,000 Euros In the long term the company is evaluating a project for an automated warehouse in order to expand the plant and have better logistics. They are currently analyzing machinery from ThyssenKrupps’ warehouse automation subsidiary which maintained an office in Mexico and which was recently purchased by the Spanish company Mecalux.
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F) Purchasing Policies and Financial Arrangements As it was mentioned earlier, La Costeña purchases its equipment directly from the manufacturers, although, in some rare cases they might purchase the equipment with local distributors. This depends on the machinery, the brand and the possible future post-sale services they could receive. In some cases such as Stork, Angelus, Ferrum, OCME and Bosar the company has signed technical support agreements with their local representatives in Mexico. The company’s purchasing policies have remained the same, where the equipment is brought with their own cash flow, giving a 30% advance payment and additional 30% within 30 days and a final payment once the equipment is operating at their facility. G) Factors that Influence Purchasing Decisions As a policy, la Costeña requires any supplier to be compatible with the existing lines and the level of technical support that they are accustomed to receive. When la Costeña has to evaluate packaging machinery, the main factors considered in this evaluation are the following:
1. Previous working experience with the supplier. 2. Technical support and training to la Costeña´s employees. 3. Innovations developed by the manufacturers to up-grade existing machinery 4. Brand recognition within the food industry. 5. Competitive pricing. 6. Country of manufacture.
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. La Costeña’s packaging machinery preferences are from European suppliers. Most of the equipment installed in La Costeña at this time is European. Even though they do not work with many American packaging machinery manufacturers they consider that the European machinery has several advantages such as:
• More flexibility in their technology and equipment usage. • Better post-sale services • Innovation in manufacturing materials and products
La Costeña showed us as an example of these characteristics with their Ferrum equipments against the Angelus equipments. The company mentioned that they would consider working with new suppliers and would even consider replacing existing lines if they are shown more efficient manufacturing alternatives. La Costeña evaluation of packing machinery according to its country of origin: Origin Technology Flexibility Service Price United States Good Good Poor Good Spain Very Good Good Very Good Average Germany Very Good Very Good Good High Holland Very Good Very Good Very Good Average France Good Poor Good High Italy Good Very Good Very Good Average I) New Origin of Suppliers from Asia. La Costeña has not received any information from Asian companies producing packaging machinery, although they have seen that every year more Asian supplier have a stronger participation in specialized trade shows. This increases the likelihood of Asian companies becoming strong suppliers to the industry, quite possible through manufacturing agreements
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with leading brands. At present none of their existing suppliers has shifted machinery production to Asia. J) Weaknesses and Strengths of Installed Machinery. Brand: Stork (CSI) Strengths:
• Innovation • Organized post-sale service • Experience
Weaknesses: • Distance (too far. La Costeña prefers to have a close by suppliers) • Expensive
Brand: Cermex Strengths:
• Has the most innovation technology in the market • Service • Experience
Weaknesses: • Expensive
K) Trade Show Attendance / Trade Publication Information The company visits mainly the PMMI’s Expo packs in Las Vegas, Chicago and Mexico City. The company is subscribed to two trade publications focused on providing information on new machinery and technologies; these are Técnica Industrial Alimentaria and Reportero Industrial Mexicano. They also look for information in the internet. L) Specific Interest La Costeña would like to receive information of the following products in order to learn from new suppliers and new technologies:
• Wrapping • Palletizers • Cutting machines • Labeling machines • Codifying machines • Closing machines • Washing machines
M) Contact Information Company Name: Conservas La Costeña, S.A. de C.V. Contact: Ing. Eduardo Ramón Jimenez Position: Director of Mechanical Maintenance (Canned Products) Address: Vía Morelos N° 268 Col. Tulpetlac 55400, México D.F. Telephone: (52) 5836-3636 Fax: (52) 5836-3687 e-mail: [email protected] page: www.costena.com.mx Company Name: Conservas La Costeña, S.A. de C.V. Contact: Ing. Bernardo Ramírez Position: Director of Maintenance (Other Products) Address: Via Morelos N° 268 Col. Tulpetlac
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55400, México D.F. Telephone: (52) 5836-3600 Ext: 5304 Fax: (52) 5836-3683 e-mail: [email protected] page: www.costena.com.mx
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DANONE de México, S.A. de C.V.
Industry: Food and beverages Sub Industry: Dairy products, bottled water,
jellies, ice cream, etc. Location: Mexico City Size: (sales) US $ 600 million Purchasing Potential: Over US $ 1 million Specific Business Opportunities:
Conveying systems, Labeling sleeve machines, Case loaders for cartons, Yogurt packaging line, Coding machines, Cartooning machines, and other equipment.
A) Company Description Danone de Mexico begun operations in 1977 and is the market leader in yogurt, milk based desserts and other dairy products. Its local business has expanded to include bottled water, which is sold under the Bonafont name. In May 2001, Danone purchased another company in the bottled water business called Pureza AGA, with this acquisition Danone with its Bonafont brand became one of the three top bottled water businesses in Mexico, operating 17 production facilities. On the dairy business side, Danone has over 5,500 employees in Mexico and operates two plants, one located in Irapuato in the state of Guanajuato and the other in Toluca in the state of Mexico. Danone de Mexico’s corporate headquarters are located in Mexico City. B) Main Products Produced and How Are They Packed
Product Brand Package Yogurt Danfrut Polyurethane container Dessert cream Dannet Polyurethane container Fresh cheese desert Danonino Polyurethane container Drinkable yogurt Dan’Up Polyurethane container Yogurt DanVive Polyurethane container Jelly Gelatina Danny Polyurethane container Yogurt with cereal Gran’Día Polyurethane and plastic
containers Milk based beverage Licuado Danone Polyurethane container Yogurt Vitalinea Polyurethane container Drinkable yogurt and fermented milk Activia Polyurethane container Fermented milk Actimel Polyurethane container Bottled flavor and natural water Bonafont Pet and polyurethane
bottles of 300 and 600 ml, 1, 1.5 and 4 lt
DANONE’s manufacturing is conducted in a continuous process line, beginning with the molding of resins into packages, followed by printing, coding, filling, and sealing and continues until the products are palletized.
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For the Bonafont products, DANONE operates complete PET lines from blowing to filling. The company receives PET pellets as raw material and thermoforms the bottles using machinery imported from France. C) Installed Packaging Machinery
Machinery Type Units Origin Average
Age Specificatio
n Yogurt and cheese packaging line/ Arcil 6 France 5 100% Yogurt and cheese packaging line/ Remi Sidell 6 France 9 100% Form Fill and Seal machines 5 Germany 8 90% Labeling machines / Krones 10 Germany 8 90% End of line: Case forming/ Aries Cartooning machine/ Aries Case closing and sealing/ Aries Case forming/ Mead Cartooning machine/ Mead Case closing and sealing/ Mead
9 9 9 1 1 1
France
US
10
5
90%
90%
Coding machines Image Video Jet
6 8
Italy US
3 3
80% 80%
Palletize/ Depalletize / Satelem 2 France 9 90% Conveying systems/ Tecmapack 3 France 9 80%
The company did not provide information on their water bottling lines. D) Last Purchase of Packaging Machinery Danone’s last purchase of packing machinery took place in 2004, with an investment over US$ 3.5 million. This purchase included a complete filling system for yogurt from the French company: Remi Sidell. The purchase also included, two new lines for their Irapuato plant, which are used to produce the new presentations for the Vitalinea and Actimel products.
E) Future Packaging Machinery Ordering Plans. The company had plans for the purchase of equipment during 2006, but these remain on hold waiting for approval by their corporate office. Once approved, they will purchase a new line for their yogurt products and other equipment needed to expand their production. In the second semester of 2006, the company will make additional purchases of packing equipment for the introduction of new product presentations. The budget for the yogurt line and related equipment is estimated in US$ 1.8 million.
Machinery Units Origin Motive of purchase Estimated BudgetConveying systems/ Tecmapack 1 France Production Expansion TBD Labeling sleeve machines / Krones 2 Germany Production Expansion TBD Yogurt packaging line / Arcil 1 France
Production Expansion TBD
Coding machines/ Video Jet 2 US Production Expansion
TBD
Machinery Brand Country Cost Yogurt filling system Remi Sidell France US $ 3.5 million Coding machines Video Jet US N/A
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F) Purchasing Policies and Financial Arrangements The company in Mexico makes purchasing decisions but the investment budgets require the approval of Danone’s headquarters in France. New purchases are defined on a line-by-line basis and equipment is selected considering its adaptability with existing lines. Most of Danone’s equipment selection is based in recommendations from other Danone facilities that have had experience with the proposed equipment. In the case a new supplier is selected, they will require the authorization of their headquarters to proceed with the purchase. Purchases of auxiliary equipment such as conveyors, labeling equipment, coders and other smaller equipment, can be made by the local operation without requiring authorization from their headquarters. Most of DANONE’s purchases are financed with their own cash flow. G) Factors that Influence Purchasing Decisions
1. Previous experience with the equipment at a Danone facility. 2. Equipment quality 3. Technical service and local support 4. Price 5. That the equipment meets Danone’s manufacturing standards.
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers.
DANONE indicated they have a preference for French equipment suppliers as they have had a long working relationship with companies like Arcil and Remi Sidell. The company has been using these brands in their yogurt and cheese lines since they started operations in Mexico. The company also prefers French suppliers for packing equipment. The company informed that it is difficult to work with new suppliers for filling and other equipment, as most of their processes are standardized throughout all their manufacturing facilities worldwide. This has helped the company to get better equipment pricing and have a good availability of spare parts. The company’s evaluation of packing machinery by country of origin is as follows: Origin Technology Flexibility Service Price France Very Good Very Good Very Good Good United States Good Good Not good Good Germany Very Good Good Very Good Good Italy Very Good Good Good Good I) New Origin of Suppliers from Asia. Danone indicated they have received information on equipment options available form several Asian suppliers, but to consider that these suppliers do not for the moment comply with the requirements as they do not have a solid track record in the industry. They indicated that once these suppliers receive approval form their corporate office in France they will be in a position to consider them as options for introducing their machines into their lines. I) Specific Interest The company is interested in receiving information from potential suppliers of accessory equipment for their yogurt and cheese lines. Equipment like, labeling, coding, case forming, cartooning and transport systems.
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J) Contact Information Company Name: Danone de México S.A. de C.V. Contact: Mr. Luis Ángel de la Rosa P. Position: Purchasing Manager for Technical Equipment Address: Guillermo González Camarena #333 Col. Santa Fé 01210, México D.F. Telephone: (52) 5258-7200 Ext. 7209 Dir. 5258-7209 Fax: (52) 5292-2629 Mail: [email protected] page: www.juntoscondanone.com.mx
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Frigorizados La Huerta, S.A de C.V.
Industry: Food Sub Industry: Frozen Food Location: Aguascalientes, Mexico Size: (sales) US$ 90 million Purchasing Potential: Est. >US$ 1.4 Million Specific Business Opportunities:
Bagging machines (Zip-Lock) Laser labelers Weighing machines Cartooning machines
A) Company Description Frigorizados La Huerta is private Mexican company that begun operations in1957. The company is a leading supplier of frozen vegetables and fruits. The company employees over 1100 workers and exports in the US, Japan, and several European and South American markets. The company sells under the brands La Huerta® y NutriVerde®. The company is also the representative of the US company The Schwan´s Food Company, in the Mexican market. This US company has presence in over 50 international markets. B) Main Products Produced and how are they packed The company cuts, freezes and packs its products the same day to assure freshness. The company’s products come in 500 mg and 2 Kg plastic bag presentations in which are shipped in carton boxes. Some of the leading products are presented in the following table:
Product Brand Package Frozen Strawberry La Huerta and Nutriverde Plastic bag, 500gr. Froze Mango cubs La Huerta and Nutriverde Plastic bag, 500gr. Frozen Fruit Mix La Huerta and Nutriverde Plastic bag, 500gr. Frozen blueberry La Huerta and Nutriverde Plastic bag, 500gr. Frozen corn La Huerta Plastic bag, 500gr. and 2 Kg. Frozen broccoli La Huerta Plastic bag, 500gr. and 2 Kg. Frozen potatoes La Huerta Plastic bag, 500gr. and 2 Kg. Frozen spinach La Huerta Plastic bag, 500gr. and 2 Kg. Frozen vegetable mix Nutri Fresco Plastic bag, 500gr. and 2 Kg. Frozen onion rings Cheffry Plastic bag, 500gr. and 1.5 Kg. Frozen jalapeños Cheffry Plastic bag, 36 pieces. Frozen cheese fingers Cheffry Plastic bag, 36 pieces. Frozen water popsicles Cheffry Plastic bag, 24 and 78 pieces.
C) Installed Packing Machinery The company did not provide information on their installed packing machinery as they considered this informaiton as sensitive to their operation. Nevertheless the company mentioned they have 10 bagging machines, 5 forms, fill and seal cartoning machines, 2 palletizing machines, 10 coding machines and 5 labelers. D) Last Packaging Machinery Purchase The company[‘s last purchase of packing equipment took place in 2005 , when the company invested over US$ 730,000.00 , in the purchase of one bagging machine, one coding machine and one palletizing.
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E) Future Packing Machinery Ordering Plans. 2004-2005 The company indicated it has a budget for the purchase of packing machinery, but could not reveal the value of the budget which it considers as confidential. Purchases will be similar to the equipment purchased during 2005. Purchases will be gradual, begin in the second semester of 2006 and continue with the existing budget throughout 2007. Considering recent purchases, the existing budget could be estimated at over US$ 1.4 million for purchases over the following 18 months.
Machinery Units Origin Motive of Purchase Estimate Budget Bagging machines (Zip-Lock) 2 TBD Replacement TBD Laser labelers 4 TBD Replacement TBD Weighing machines 3 TBD Improve process TBD Cartooning machines 1 TBD Improve process TBD
F) Purchasing Policies and Financial Arrangements The company has a preference to purchase machinery directly from the equipment manufacturers as it considers that this policy might result in savings. The company will consider purchasing from the local representative if this presents no impact on price. The company provides maintenance to the machinery with an in-house staff which is trained by new equipment suppliers. The company indicated that on new purchases it requests the supplier to provide a 2 year maintenance service agreement which allows the company’s staff to obtain adequate understanding and training to become self sufficient for providing maintenance to the equipment. The purchase process for packing machinery consists in RFP from existing suppliers and two or three new suppliers to evaluate alternatives. A fundamental requirement is that suppliers must be experiences in the vegetable and fruit industries. The equipment used in the process must have the required certifications to allow the product to be exported into international markets. The company follows the standard payment policies set by the suppliers, however they prefer 50% down payment and the remaining balance after one month of operation. When the supplier accepts these terms the company considers this a plus for the final purchasing decision. G) Factors that Influence Purchasing Decisions
1. Functionality and efficiency. 2. Industry brand recognition. 3. Technical support 4. Durability 5. Price and operational cost.
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has no preference for a particular brand or product origin. They mentioned that they don’t judge the machinery depending on its origin as each manufacturer is different and in all geographies there are good and bad manufacturers. In general terms they ranked the machinery origin as follows: Origin Technology Flexibility Service Price United States Very Good Good Good Average Germany Very Good Average Good Expensive Brazil Average Average Good Very Good Japan Very Good Very Good Very Good Expensive
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I) New Origin of Suppliers from Asia. The company indicated they have not been approached recently by low cost Asian suppliers. The company indicated to have some Japanese equipment at the plant which is considers being “ a real marvel”. J) Trade Show Attendance / Trade Publication Information The company’s top management production and purchasing managers visit Empack in México, Europe and USA. They did not comment anything about ExpoPack. K) Specific Interest The company is interested in receiving information form packaging machinery suppliers for the frozen food industry, particularly on manufacturers of the following equipment:
• Bagging machines (Zip-Lock) • Laser labelers • Weighing machines • Cartooning machines
L) Contact Information Company Name: Frigorizados La Huerta S.A. de C.V. Contact: Ing. Melquíades Delgadillo Pérez Position: Purchasing Manager Address: Calle 1 No. 140 Col. Madio Kilo 20350, San Francisco de los Romo, Aguascalientes Telephone: (52449) 910-0800 Fax: (52449) 910-0830 e-mail: [email protected] Web page: www.lahuerta.com.mx
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Grupo BIMBO, S.A. de C.V.
Industry: Food Sub Industry: Box bread, bakery, pastry, pancakes, donuts, cookies,
all types of tortilla, candies, chocolates, snacks, jellies, canned fruits, candies.
Location: Mexico City Size: (sales) US$ 5.2 billion. Purchasing potential:
> US$ 1.8 million in 2006.
Specific Business Opportunities:
Horizontal flow wrappers Vertical Bagging machine Palletizing lines
A) Company Description Established in Mexico in 1945, BIMBO is one of the largest boxed-bread producers in the world and one of the largest companies in Mexico. The company’s presence in Mexico and in several Latin American and European countries is very strong and BIMBO controls more than 90% of the boxed bread industry in Mexico. The company has presence in 15 countries in Latin America, Europe and recently China. It exports to the US and Canada as well as to the rest of Latin America. Since 1980 the company is traded in the Mexican Stock Market (Bolsa) and is organized in six different companies under one holding. The company has 75 manufacturing plants, over 81,000 employees and has a nationwide distribution system with over 29,000 vehicles.
Grupo BIMBO Plants: Subsidiary Number of plants Bimbo 26 Marinela 8 Barcel 4 Ricolino 8 Moldes y Exhibidores, S.A. de C.V. 1 Mexico Plants 45 Central America 3 Organización Latinoamérica 11 Bimbo Bakeries USA 13 Europe 2 Beijing Panrico Food 1 Foreing Plants 30 Total 75
B) Main Products Produced and how are they packed BIMBO has more than 5,000 product presentations and 100 product brands. The company has several subsidiaries, each manufacturing different products. The most important subsidiaries are:
Subsidiary Products Bimbo Box bread, Integral bread, Sweet baked goods
Pastries, donuts. Marinela Snack Cakes, Cookies Tia Rosa Sweet Baked goods, Tortillas
Cookies. Ricolino Enrobed Chocolate Products (marshmallow, peanuts,
almonds, etc.), Gelatin Gummies, and Bubble Gum.
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Barcel Salted snacks including Potato chips, corn chips, peanuts and other nut and seed varieties.
Suandy High quality Pastries. Wonder Box bread, Integral bread, Sweet baked goods Lara Cookies. Coronado Jams, jellies, fruit preserves, cajeta,(a typical milk -based
dessert), ates (a typical fruit paste). Bimbo Bakeries USA Bimbo Bakeries USA is leader bakery products
manufacturer in Texas and the western part of the US. It has 16 plants in 22 states and sells a combination of its Mexican products as well as some premium lines under the brands: Oroweat, Mrs. Baird’s, Entenmann’s, Thomas´, Boboli, Tía Rosa, Marinela and Bimbo among other.
Beijing Panrico Food Processing Center
Bakery products.
Organización Latinoamérica
Different type of bakery products under the brands: Tulipan for Costa Rica, Plus Vita and Ana Maria in Brazil, Ideal in Chile among others.
The company’s packaging policies vary depending on the type of product, for example they have maintained the same package for box-bread since the company’s foundation, but they are continuously innovating packaging for other products in their lines, always seeking to offer a fresh quality product. Currently Grupo Bimbo is seeking to standardize its packaging for several product lines. They selected the US Company Davoy to provide LDEP and Aluminized Flow Pack with a for all its Marinela, Lara and Suandy products. C) Installed Packing Machinery Due to the company’s great number and variety of packaging equipment, they could not provide a detailed inventory. The company only provided information on their most representative packaging machinery.
Current Machinery Used Brand Units Origin Average Age
Spec.
Horizontal form, fill and seal machines
FMC Record Maquipack
+ 300
USA Italy
Mexico
27 20 12
90% 90% 90%
Horizontal flow wrappers Doboy 8 USA 1 90% Horizontal flow wrappers Cavanna 2 Italy 1 90% Horizontal flow wrappers Masipack 1 Brazil 1 90% Stretch banding machine MC Automation 1 USA 1 90% Cartoning machine Bradman and
Lake 1 USA 1 90%
High-speed horizontal form, fill and seal machines (300 hits per minute)
Delta 1 USA 2 90%
High-speed horizontal form, fill and seal machines (Stand up pouch with zipper)
Vol Pack
1 Spain 3 30%
High-speed horizontal form, fill and seal machines (Stand up pouch with zipper)
Bossar
1 Spain 3 90%
Vertical Form Fill and seal machines
Woodman Ishida TNA Matrix Multipond
+250
USA Japan
Australia USA
Germany
17 10 6 6
17
90% 90% 90% 90% 90%
Thermoforming machines Multivac +150 USA 12 90%
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Padovan Italy 6 90% Coding machines Markem
CEIA Videojet Domino
+ 300 USA Italy
14 8
90% 90%
Metal detectors Loma Safe Line Goring Care
+ 100 USA USA USA
10 10 8
90% 90%
Carton box forming machines Clic Lock 20 USA 10 90% Tape dispensing Machines N/A USA 5 80% Palletize machines N/A 5 USA 5 90% Counting product Hatch Mang 5 Holland 3 90% D) Last Packaging Machinery Purchase BIMBO’s last packaging machinery purchase was for 11 horizontal flow wrapper lines, one stretch banding machine and one cartoning machine. This purchase took place between 2005 and 1Q 2006, and represented investments for over US$2 million for the whole lines. These machines were installed in the Mexico City plant of Marinela and are currently operating. The company tested a series of flow- wrapping machines during 2004 and on 2005 decided that they best alternative was to select Doboy as a supplier. The company also purchased a series of plants in Brazil which were using Masipack and have begun using some of these machines in Mexico. Bimbo’s spends between US$ 2 million and US$ 3 million in packaging machinery per year.
Machinery Brand Country Horizontal flow wrappers Doboy USA Horizontal flow wrappers Cavanna Italy Horizontal flow wrappers Masipack Brazil Stretch banding machine MC Automation USA Cartoning machine Bradman and Lake USA
E) Future Packing Machinery Ordering Plans. The company has developed a US$ 1.8 million budget for the acquisition of packaging machinery during 2006. This budget will be spent mostly in the horizontal flow wrappers packaging project as well as in the replacement of old equipment. Over the following few years BIMBO is defining a budget for investing in automated palletizing infrastructure for their facilities in Mexico, as many of the plants still have manual palletizing procedures. The company indicates this is a necessary investment considering the significant production volume growth that is experiencing. Decisions on potential suppliers to this project will be made in early 2007. Companies with the capability and interest to present proposals for this project should approach BIMBO to indicated their interest, experience and capabilities.
Machinery Units Origin Motive of Purchase Estimate Budget
Horizontal flow wrappers 8 USA Expansion and replacement
US$1.3 million
Vertical Bagging machine 2 Australia Expansion US $ 500,000Palletizing lines for several plants (Medium term macro project)
TBD TBD Improve product handle process
TBD
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F) Purchasing Policies and Financial Arrangements Over the past few years BIMBO used to consolidate the purchase of packing machinery through their subsidiary Inter- Refacciones. Currently purchases are handled through a corporate purchasing division, directly within BIMBO. Bimbo has a preference for some suppliers but is continuously looking for information on new equipment and suppliers for bakery equipment. The company visits trade shows regularly in Mexico, the US and Europe. When in the process of purchasing new equipment, the company invites its existing suppliers and minimum 3 new suppliers to present proposals for the equipment. New suppliers need to convince Bimbo as to why they should be considered as a company and not only for their equipment. The company purchases no equipment from companies with less than 10 years in the market and has a preference for large suppliers. The COO’s staff evaluates the proposals and makes the purchasing decision. Purchasing terms are negotiated on a case by case basis but usually these are 30% down payment, 55% at the time the machinery is shipped, and the remaining 15% after installation and tests. The company buys spare parts from the equipment manufacturers and keeps an inventory of the most commonly required parts. Bimbo purchases complex spare parts directly from the manufacturers and for common replacement parts, those are purchased from local shops or manufactured in-house. G) Factors that Influence Purchasing Decisions
1. Functionality 2. Technical Support 3. Price 4. Brand recognition in the industry 5. Previous experience (equipment with best results within their own facilities)
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. Bimbo had a packaging machinery manufacturing company until 2003 when it sold the company to third parties. This company, called Maquindal has several manufacturing agreements to produce equipment with assistance of various leading equipment suppliers (AMF, Baker Perkins). Maquindal manufactures electric switchboards, power panels, automatic conveyor systems, coolers, and conveyor systems and although it is not part of BIMBO, the sale agreement requires Maquindal to offer preferential pricing to BIMBO. Bimbo only purchases packaging machinery from recognized and large manufacturers and new suppliers are required to demonstrate their experience in the bakery industry and offer extensive support for their equipment. Bimbo’s evaluation of packaging machinery according by country of origin is the following: Origin Technology Flexibility Service Price United States Very Good Very Good Very Good Good Canada Very Good Good Good Good Germany Very Good Average Poor Poor Italy Good Very Good Very Good Average Spain Good Average Good Average Holland Very Good Very Good Very Good Average Japan Very Good Very Good Good Average
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La BIMBO considers that US and European packing equipment suppliers both present solid alternatives. The second is considered to be longer lasting and this might explain a slight preference for European suppliers especially for those machines that do not experience significant technological change. But the company also indicated that most US suppliers have efficient and proactive representatives in Mexico which assures that the equipment will receive adequate servicing, which is also a key driver for a positive selection. I) New Origin of Suppliers from Asia. The company has recently been approached by significant number of Asian suppliers, which offer prices which are significantly lower that US and European suppliers, BIMBO has agreed to evaluate some of the equipment to define if they meet their technical and quality requirements, BIMBO has not received any information from US or European suppliers which have begun manufacturing their equipment in Asia. J) Trade Show Attendance / Trade Publication Information Bimbo visits yearly, most packaging trade shows in Mexico, the U.S. and Europe. The company subscribes to specialized trade publications like Packaging Digest, Packaging World, Baking and Snack, Snack Food and Wholesale Bakery. K) Specific Interest Bimbo is interested in receiving information from manufacturers of horizontal flow wrappers vertical bagging machine, palletizing lines, carton closing machines, Coding machines, and automation equipment. Interested companies must remember that Bimbo requires potential suppliers to have extensive experience in this company’s sectors in order to be considered. L) Contact Information Company Name: Grupo Industrial Bimbo, S.A. de C.V. Contact: Ing. Luis Naum Vargas Position: Corporate Planning Manager Address: Prolongación Paseo de la Reforma #1000 Col. Santa Fé, Del Alvaro Obregón 01210, México, D.F. Telephone: (5255) 5268-6848 Fax: (5255) 5268-6690 e-mail: [email protected] Web page: www.gibsa.com.mx
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Grupo Gruma, S.A. de C.V.
Industry: Food Sub Industry: Corn Flour and tortilla
products Location: Monterrey, N.L. Size: (sales) N/A Purchasing Potential: $120,000-$200,000 USD Specific Business Opportunities:
Wrapping, palletizers and packaging machines.
A) Company Description Gruma was established in Mexico in 1949. The company’s core market remains centered around tortillas originally the tortilla flour; today it has grown and expanded its products lines worldwide. Gruma is considered as one of the production leaders of corn flour and tortilla products. The company has over 10 manufacturing plants all over the world. It has operations in the United States, Mexico, Central America, Venezuela and Europe. The company’s objective is to improvise and modernize the traditional Mexican flour and tortilla industry. By making vast research and development investments, the group was able to develop a high technology for the production of flour. Today they have significant industrial, ecological and efficient processes for the production of these products. They have position themselves as the worldwide leaders in corn flour and tortilla production, both in production costs and product quality. B) Main Products Produced and How Are They Packed
Product Brand Package Flour Mazeca Large package 90%, 10% small
package C) Installed Packaging Machinery The company only provided information on their most representative packaging machinery of the manufacturing plants in Mexico.
Machinery Type Units Origin Average Age
Specification
Filling Machines/ Foewmas 2 Germany 1 90% Filling Machines /Ika 2 Italy 10 95% Filling Machines /SGS 2 Italy 20 80% Filling Machines /SIG 2 Switzerland 20 85% Filling Machines /Interpak 2 Italy 20 85% Filling Machines /Emaflex 2 Mexican 15 75% Filling Machines /Indomak 3 Brazil 2 95% D) Last Packaging Machinery Purchase Gruma’s last packaging machinery purchase took place in 2005, because the company required expanding its packing capacity to meet their growing demand for its products. They invested on three Indomaks to meet this goal for 2006.
Machinery Brand Country Cost (Approximately) 3 Flour packing machinery Indomak Brazil $160,000 USD
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Although the company didn’t had the exact investment amount they told us it as approximately $160,000 USD. E) Future Packaging Machinery Ordering Plans. Future purchasing projects are done by the engineering department through several budgets planning throughout the year. For 2006 Gruma´s short-term purchase plans consist on further expansion of their facility by acquiring new flour packaging equipments. Since the results with the Brazilian products have been positive, Gruma is looking for a similar supplier or even going with Indomak again. Their current budget for this purchase is around $120,000 USD.
Machinery Units Origin Motive of purchase
Flour packing machinery (Indomak type) 1 or 2 N/A Expansion F) Purchasing Policies and Financial Arrangements Their purchasing policies consist of a rigorous economical and technical study before the investment is done. Estimates of required equipment are based on expected demand growth of their products. After this, they study the operation costs and performance of the product. After all the investment plans and estimates of the required packaging equipment are done, the company quotes prices from different suppliers the equipment needed. Gruma buys all of their equipment directly from the manufacturer. They prefer to do this because it’s a guarantee that the machinery will have the best results and post-services. They have had previous bad experiences with distributors, so as a result they work only with the manufacturer. The maintenance of the equipments is done by a specialized technician’s team of Gruma. These employees go through a training done by the supplier in order to operate the machines correctly. When they have to repair a machine they prefer to use only original spare parts. The company purchases the machinery with its own funds through negotiations done with the vendor. They like to work with an advanced payment and when the machinery is already working in the plant, they pay the rest. The company also takes vendor financing when available. G) Factors that Influence Purchasing Decisions The factors that affect the purchasing decisions of Gruma are the following:
1. Quality 2. Post-Sale service 3. Price 4. Brand
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. The company doesn’t have any brand preference but they mentioned that they prefer to work with German equipments because of their quality and production capacity. They have had very good results with all the German machinery; Gruma thinks Germany is the country with the best technology on packaging equipments. Although they try to look for German products, Gruma is open to receive information from other suppliers to learn and evaluate their technology. Currently the company has not established any kind of business arrangement with any packaging equipment supplier. The company indicated that European packaging equipment suppliers have several advantages over U.S. suppliers. The first reason Gruma prefers a European supplier is because their they perceive the equipment as of higher quality and offering more efficiency. The second reason is that they have had more options of different types of machinery, compared with the U.S. where
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they have found fewer alternatives of packaging machinery. However they told us they haven’t had that much experience with US. machinery. The company evaluates equipment by country of origin as follows: Origin Technology Flexibility Service Price Germany Very Good Very Good Good Regular Switzerland Very Good Good Good Regular Italy Good Regular Good Good Brazil Very Good Good Good Regular I) Weaknesses and Strengths of the installed machinery. Brand: Foewmas Strengths:
• Production Capacity • Low operation costs • Efficient
Weaknesses: N/A
J) New Origin of Suppliers from Asia. Gruma has not been contacted by Asian packaging manufacturing companies. They told us that they are not interested in receiving any information from companies of this continent since they think that the technology and quality are cheap and bad. Gruma is very sensitive on choosing efficient and functional packaging machineries; they prefer to pay more for better quality. K) Trade Show Attendance / Trade Publication Information The company doesn’t attend to many trade shows; they prefer to make their own research. The only tradeshow they visit is the Expo Pack. In order to learn about new technologies they only use the expo pack magazine and their supplier’s constant feedback information. L) Specific Interest The company is interested in receiving information on wrapping, palletizers and packaging machines. M) Contact Information Company Name: Gruma S.A. de C.V. Contact: Mr. Emilio Sotomayor Position: Engineering Director Address: Av. Humberto Junco Volt 2307 Col. Valle Oriente 66209 San Pedro Garza García, N.L. Telephone: (52-81) 8399-3300 ext.3970 Fax: (52-81) 8399-3300 Mail: [email protected] page: www.gruma.com
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Helados Holanda, S.A. de C.V.
Industry: Food Sub Industry: Ice cream Location: Estado de Mexico Size: (sales) US$770 million for Unilever and
approximately US$160 million for Helados Holanda.
Purchasing Potential:
$500,000 to $1 million USD for 2006
Specific Business Opportunities:
Filling machines, packing and palletizer machines.
A) Company Description Helados Holanda is currently one of the largest Mexican ice-cream producers and distributors. The company was established in 1938, before they joined the Unilver group, the company had the idea of creating a chain of ice-cream parlors, where each store would manufacture its ice cream products. After they saw that demand had increased dramatically, the company decided to build a processing facility for the manufacturing of ice-creams products to supply the stores. In the late 1960’s Beatrice foods enters into a joint-venture with this company and finances the expansion of their manufacturing facilities. This expansion helped the company consolidate its leadership as the largest ice cream producer in Mexico. In recent years Unilever bought Helados Holanda and has expanded its presence even more throughout Mexico. Today they have over 40,000 points of sale thanks to the Unilever infrastructure. B) Main Products Produced and how are they packed
Product Brand Package Scooping Ice Cream Holanda Bulk cylinders (carton exterior, plastic interior or
plasticized carton)
Ice cream cup Copa Cornetto Polythene
Ice cream popsicle Cornetto Plastic Wrap Ice cream dessert Vienetta| Cellophane and carton box Iced popsicles (different flavors)
Holanda BOPP Bag
Ice cream sandwich Mordisko Polyfoi Bag C) Installed Packing Machinery
Current Machinery Used Brand Units Origin Average Age Specification Filling Machines Ventura 2 N/A 6-7 85% Molds for iced popsicles with integrated wrapping
WCB Versaline
1 USA 10 85%
Molds for iced popsicles with integrated wrapping
WCB Vitaline
2 USA 35 80%
Molds for iced popsicles with integrated wrapping
Ria 14 GRAM
1 Germany 5 90%
Tetrapak SL9000 Hoyer 1 Denmark 5 90% Filling machine WCB 2 USA 9 70% Wrapping machine for ice-cream/cookie sandwiches
Interbreak 2 USA 3 95%
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Stick dispensing machine Storkmax 4 USA/Denmak 7 85% Coding Machines VideoJet 8 USA 7 50% Coding Machines Links 2 N/A 2 100% Tape wrapping machine N/A 10 Mexico 4 90% Interbreak Wrapping Machine
N/A 1 USA 2 90%
Polocup Machine N/A 1 Italy 2 90% D) Last Packaging Machinery Purchase
Machinery Brand Country Cost (Approximately) Liquid Filling Machine Tecmar Argentina $88,000 USD Package forming machines
Polipac USA $150,000 USD
Spare part attachments for the existing equipments. These attachments will serve for manufacturing new products.
WCB USA $148,000 USD
These purchases where done in 2005. Helados Holanda told us that they were satisfied with the attachments they bought for their current equipments since it has helped them to develop new product presentations and packages without the necessity of buying a whole new machine. As a result they have been more satisfied with manufacturers that have a flexible technology for their machines. For all their machinery purchases, Helados Holanda has contacted the suppliers manufacturing facilities. This strategy has been carried out for quality and post-service reasons, according to the company a direct contact with the manufacturing plant will have better results than a third party. In the past, when they had troubles with the operation of equipments, the best service and technical support was done by the manufacturer itself. Additionally, the manufacturer has given Helados Holanda’s maintenance team a personal training for the operation and repairmen of the machines. When the company’s staff is unable to repair the machine, the suppliers attend the problem immediately. Clearly, Helados Holanda has followed this strategy to obtain better services, a faster respond and better results for their production lines. E) Future Packing Machinery Ordering Plans.
Machinery Units Origin Motive of Purchase Estimate Budget Attachments for installed machinery
N/A N/A To have new variants of product
presentation. Modification of
package presentation.
N/A
Helados Holanda’s next packing machinery purchases are not yet defined. Although, their estimated budget for 2006 is approximately between US$500,000 and US$ 1 million dollars. The purchasing plan for 2006 will be defined until after the summer, which is the time in which the company defines the products that will be introduced the following year. The company indicated that the purchase plans would include a series of add-on equipment to accommodate new product presentation and a potentially large purchase of filling machines might also be included in their plans. The company reviews several aspects before selecting a supplier. There is a preference for larger suppliers of packaging machinery, which already have an important presence in the market. They make sure that the company has good technical support and post-sales service and they Lastly, they launch a contest with several suppliers in order to learn more about them.
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Besides purchases another practice for obtaining packing machinery is to reach some type of leasing contract with the suppliers. The negotiations are for leasing terms which might also include some elements of servicing. F) Purchasing Policies and Financial Arrangements As mentioned earlier Helados Holanda usually reviews its purchasing budget for packing machinery during the summer season. The company purchases its equipment with its own cash flow. For equipment purchased priced at over US $500,000, it is considered as a “corporate acquisition”. In these cases the approval process requires following a series of steps at the local level and at their headquarters in London. When a machine has been selected, it requires the approval – at a local level- of the supply chain director, the manufacturing manager, the commercial director, and the managing director and afterwards the headquarters at London approve the purchase. For smaller purchases, Mexico’s offices are the ones in charge of approving the purchase. Helados Holanda´s purchasing policies are done in a win-win basis. Usually they pay a 30% in advance and afterwards the 70% remaining when the machinery is delivered and installed. G) Factors that Influence Purchasing Decisions 1. Meets technical and manufacturing requirements 2. Technical support 3. Spare part availability 4. Price 5. Previous experience with the supplier. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has no preference for any particular brand; however, they told us that they prefer to look for suppliers that have an important presence in the market. They usually contact large packaging equipment manufacturers. The reason for this particular strategy is because:
• Large companies have a broader experience in the market • They always have innovations and new solutions. • The services that a large company gives to the client are much better than a smaller
supplier. Helados Holanda also told us that they prefer European equipments than U.S. equipments. The main reasons were that European packaging machines have more technological advancements, better post-sale services and are more robust. Just in time spare part delivery and fast technical support are two advantages that an American supplier would have in favor against a European supplier. Although in the last 2 years the technical support of their American suppliers has severely decreased. Origin Technology Flexibility Service Price United States Good Good Regular Regular Germany Very Good Good Good Good Denmark Very Good Very Good Very Good Very Good Argentina Regular Good Very Good Very Good I) New Origin of Suppliers from Asia. In the last year, Helados Holanda has evaluated several Asian packaging manufacturers but hasn’t done any purchase. After their machinery experts analyzed these equipments, they
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realized that the technology wasn’t the optimum for Helados Holanda’s objectives. The company decided that these products were of bad quality and low durability. They also told us that none of their current suppliers have gone to Asia to manufacture their products. J) Weaknesses and Strengths of Installed Machinery. Brand: Tetrapak Strengths:
• Known in the market • Have years of experience • Innovation
Weaknesses: • Slow response to providing servicing or problem solving for clients
K) Trade Show Attendance / Trade Publication Information The company attends several expos and conferences. The three main expos and probably considered as the best source of information for future purchasing decisions are: Expo Pack, Pack Expo and Interpack in Germany. Helados Holanda is subscribed to several magazines, such as Packing world and Enfasis Packaging, just to mention two of the most important publications received by the company. L) Specific Interest Helados Holanda is very interested in receiving pricing and product information from manufacturers of filling machines, packing and palletizer machines. M) Contact Information Company Name: Unilever De Mexico, Division Helados Contact: Ing. Octavio Reyes / José Antonio López Position: Manufacturing Department Chief / Manufacturing Department Chief
Assistant Address: Carr México-Querétaro Cuautitlan, Izcalli Telephone: (52-55) 5899 0379 Fax: (52-55) 5899 0379 x 6637 e-mail: [email protected] web page www.unilever.com.mx
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Herdez, S.A. de C.V.
Industry: Food Sub Industry: Canned foods, sauces,
honey, mayonnaise, frozen vegetables, juice, jellies, mole, pasta, soy beverages, vinegar, tuna, mustard, etc.
Location: Mexico City (D.F.) Size: (sales) Over US$ 470 million Purchasing Potential: US$1 million Specific Business Opportunities: Labelers, cartoning
machines, pasta filling machines, capping and can closing machines.
A) Company Description Herdez is a Mexican company established in 1914 and is currently one of the leaders in Mexico’s food processing segment. The company operates fourteen manufacturing facilities, eight distribution centers throughout Mexico and one corporate office in Mexico City. The company employs closet o 6000 employees for their operations. The company is divided in seven operational units which range form company management to the representation of imported food products. At present, Herdez has formed a series of strategic alliances with foreign companies, some of the most important examples include four strategic alliances (50% ownership) with global leaders, including one with McCormick & Company, Inc., two with Hormel Foods International Corp., (Hormel Alimentos S.A. de C.V. for distribution of Hormel products in México and Herdez Corporation for distribution of Herdez products in the United States), and one with the Italian company Barilla Almentare S.p.A. The products are well recognized and valued in the Mexican market with more than 370 different products and 500 different presentations sold in México, which includes the brands Herdez, McCormick, Doña María, Chulavista, Barilla, Yemina, Vesta, Búfalo, Carlota, Yavaros, Solo, Festín, Hormel, Kikkoman, Tami, Soften, Pons and Perrier, among others. The company exports approximately 1% of its production to the US and South America. B) Main Products Produced and How Are They Packed Due to the wide range of products manufactured and packed by Herdez, it would be complicated to list all its products and packages. Most of Herdez’s products are canned or packed in glass, PET bottles, tetra pack, LDEP plastic bags among others. The company also has special machinery for packing Tuna, consommé, and mole. The following table describes Herdez’s most representative products and packages.
Product Brand Package Mushrooms Herdez Can, 186, 400 and 800 gr. Vegetables Herdez Can, 185, 200, 215, 225, 390 and 400 gr. Fruits Herdez Can, 425 and 800 gr. 8 vegetable juice Herdez Can and glass bottles Clam and tomato cocktail Herdez Tetra pack and PET bottles Juices Herdez Can and tetra pack Sauces Herdez Can, tetra pack and glass bottles Consommé SOLO Aluminized doy pack, carton coxes and plastic
containers
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Pasta Barilla and Yemina
Plastic bags and carton boxes
Honey, corn and maple syrup Carlota PET and glass bottles Juices and jellies Festin Tetra pack Mayonnaise, mustard dressings, spices, teas, marmalades, etc.
Mc Cormick PET squeezable and glass bottles as well as plastic containers.
C) Installed Packaging Machinery The information presented in the following table on packaging machinery refers to the company’s plants in Mexico City and San Luis Potosi. The plant in Mexico City operates eight packing lines for mayonnaise, mustard and sauces and the San Luis Potosi plants operates four lines for the Barilla ventura which produces pasta products. Overall, the company informed that it has over 65 packaging lines through out their fourteen production facilities. Current Machinery Used Units Origin Average
Age Specification
Filling-Sealing Machines for Viscous Products/ Angelus, Pacific, Solbern, US Bottler
8 US/ Sweden
13 90%
Filling Machine for Powder (Consommé) 1 Italy 4 100% Liquid filling machine – Tetra Pack 4 Sweden 2 90% Doy pack filling machines 2 Spain 3 95% Capping Machines/ Various brands 8 US/
Taiwan 12 90%
Cartoning Machines 7 US 15 85% Tape Dispensing Machines 6 US 14 100% Coding, Datig Machines 7 US 14 90% Printing/ Labeling Machines/ Krones, Auxiemba, ABC, Mew Way, Burt
7 Germany, Spain,
Italy, US
11 100%
Case Forming 3 US 10 90% Computerized Systems 3 US 8 100% Conveying Systems to dispense boxes, bottles, transport finished boxes, etc
Mexico 13 100%
Multipacking Machines 3 US 11 80% Palletizers 3 US 13 90% Shrink Packaging Machines 3 US 11 80% Stretch Packing Machines 2 US 8 100% Weighing Systems 3 US 8 100% Wrapping Machines 3 US 13 90% Specialty Machinery (All Fill) 5 US 9 100% Automatic Cartoning Machine/ Cayat 1 US 3 90% Filling Machines for semi viscous/FMC 1 US 3 90% Cap sealing machine/ Startech 1 France 3 100% Thermoforming machine 1 Japan 3 100% Jet coding machines 6 US 3 100% Pasta filling machine plastic bag / Envaflex 25 Mexico
and Italy 2 80%
Palletizing machine / Columbia 3 US 1 90% Tray Packing machine / PMI 1 US 1 90% Filling liquid line / Simonazzi - SIDEL 1 Italy 1 95% Carton form, and seal machine / Simonazzi 1 Italy 1 95%
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- SIDEL Up until the late 90’s over 90% of the company’s packing machinery was supplied by US companies. The composition has changed over the past years and at present there is a preference for Italian, Australian and Mexican suppliers. D) Last Packaging Machinery Purchase Herdez made its last packaging machinery purchase for their Mexico City and San Luis Potosi plants on July 2005, when it acquired three palletizing machines and one tray packing machine for the San Luis Potosi Plant and one filling liquid line and one Carton form, and seal machine for the Mexico City plant. For these purchases Herdez invested around US$ 2.5 million.
Machinery Brand Country Palletizing machine Columbia US Tray Packing machine PMI US Filling liquid line Simonazzi - SIDEL Italy Carton form, and seal machine Simonazzi - SIDEL Italy
E) Future Packaging Machinery Ordering Plans. Over the past 2 years, Herdez has invested in excess of US$ 6 million dollars in the purchase of packing machinery that was installed through their manufacturing plants. Because of the significant recent purchases, the budget for packing machinery purchases during 2006 is estimated at US$ 1 Mellon. The most representative acquisitions planned for 2006 include:
Machinery Units Origin Motive of Purchase Wrapping machines / Clever 2 Italy Replacement Labeling / Clever 2 Italy Replacement Cartoning machines / PMI 1 US Expansion Tapping machines for glass bottles 1 US Renewal Pasta filling machines TBD Europe or
Australia Expansion/ Renewal
F) Purchasing Policies and Financial Arrangements Each of the fourteen plants produces a yearly report on new equipment requirements, which is sent to the corporate headquarters, where they evaluate the needs and decided between equipment transfers between facilities or the purchase of new machinery. Once the purchase of new equipment is decided, each plant selects the suppliers and informs the corporate office for final approval. This company purchases equipment with its own funds, usually giving letters of credit accepted by the equipment supplier’s bank as guarantee. Payment schedule is commonly 30% in advance and 70% upon delivery. G) Factors that Influence Purchasing Decisions
1. Machine efficiency 2. Low maintenance cost 3. Price 4. Service and spare parts availability in Mexico 5. Experience in the food sector
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers.
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Most of the installed machinery at their various manufacturing plants continues to be American but there is a clear trend for the substitution of machinery in favor of Italian, Australian and Mexican suppliers. Company managers consider that US suppliers are now lagging in areas like automation and robotics and that the commitment to servicing their clients has also declined. They indicated that Asian equipment still does not have a strong pretense in Mexico as it has not developed adequate local distribution. They indicate that what they’ve seen proposed by Asia supplier’s represents extremely flexible and adequately priced machinery. Another significant trend indicated by the company is that European suppliers are beginning to establish distribution subsidiaries in Mexico and replace their existing third party representation as this significantly increased the price of the machinery in Mexico. I) New Origin of Suppliers from Asia. The company indicated that one of their current Italian supplier has begun the manufacturing of some spare parts in Asia. That this has had a significant impact in price reduction. The company indicates that the supplier stands behind the quality and provides guarantees for this spare parts. Herdez is open to analyzing proposals from Asian suppliers. The company considers that their equipment is becoming increasingly sophisticated and that is logical to expect they will become a significant force in the market in the coming years. Herdez gives regular maintenance to their equipment and only when a major repair is required, the company brings in technicians from the supplier. The company believes that most local representatives are well trained to sell but not service the equipment they represent. Origin Technology Flexibility Service Price United States Good Good Regular Regular Italy Very Good Very Good Very Good Good Spain Very Good Very Good Very Good Good Australia Very Good Very Good Very Good Regular Mexico Good Very Good Very Good Very Good J) Trade Show Attendance / Trade Publication Information Herdez’s plant managers continuously follow equipment trends and maintain communication with existing suppliers. They also visit trade shows and subscribe to trade magazines for learning about new potential suppliers. Herdez’s plant managers schedule regular visits from potential equipment suppliers, for this to be able to know first had about the company’s requirements. Meetings should be scheduled at each facility as equipment selection is made at that level. K) Specific Interest Herdez prefers receiving visits from potential equipment suppliers than receiving equipment literature as this allows suppliers to better understand their particular needs. Herdez mentioned to be interested in packaging machinery for canned foods, beverages and bottled condiments. L) Contact Information Herdez Corporate Contact: Ing. Rafael de Regil Position: Corporate Operations Manager Address: Monte Pelvux No. 215 Col. Lomas de Chapultepec, Del Miguel Hidalgo 11000, México, D.F. Telephone: (5255) 5201-5655 Fax: (5255) 5201-5791 e-mail: [email protected] Web page: www.herdez.com.mx
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Herdez Mexico City Plant Contact: Ing. Arturo Miranda Position: Plant Manager Address: Calz. San Bartolo Naucalpan #360 Col. Argentina Poniente C.P. 11230 México D.F. Telephone: (5255) 5576-3100/ 5576-3891 Fax: (5255) 5358-6789 Herdez Chiapas Contact: Rafael Camacho Position: Plant Manager Address: Parque Industrial Fondeport
Francisco I. Madero s/n C.P. 30830 Puerto Madero, Chiapas
Telephone: (52-962) 628-6851, 628-6852 Herdez Ensenada Contact: Ing. Mario Flores Luna Possition: Plant Manager Address: Carr.Transpeninsular No. 86
Col. Carlos Pacheco C.P. 22890 Ensenada, Baja California
Telephone: (52-646) 176 7877 Fax: (52-6) 177-62-85 Herdez San Luis Potosí, “El Duque” Plant Contact: Ing. Ignácio Chavez Position: Plant Manager Address: Av. Industrias No. 400
Zona Industrial 1ª. sección C.P. 78090 San Luis Potosí, S.L.P
Telephone: (52-444) 137-0300 Herdez San Luis Potosí, Industrias Plant Contact: Ing. Eduardo Larraga Position: Plant Manager Address: Av. Industrias no.3815 Mz.29
Zona Industrial, 1a Sección C.P. 78090 San Luis Potosí, S.L.P
Telephone: (52-444)824-5961 Fax: (52-444) 824-6067 Hérdez Yavaros Contact: Ricardo Nieblas Position: Plant Manager Address: Av. Central Poniente, s/n
Parque Industrial Fondeport C.P. 85251 Yavaros, Huatabampo, Sonora
Telephone: (52-647) 481-0130 Fax: (52-647) 481-0134 Hérdez Guanajuato Contact: Francisco Rubin Position: Plant Manager Address: Carretera Panamericana Km. 292 C.P. 38260, Villagrán, Guanajuato Telephone: (52-411) 155-1107 Fax: (52-411) 155-2417
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Martín Cubero, S.A de C.V.
Industry: Food Sub Industry: Peanuts, seeds, nuts and others. Location: Cuautla Morelos, México Size: (sales) US $ 46 million Purchasing Potential:
US $ 750,000
Specific Business Opportunities:
Gravimetric filling line and bagging machine, Weighing machines, Bagging machines, Palletizing machine and Cartooning machines
A) Company Description Martín Cubero initiated operations in Mexico City in 1966 as a small family-owned company. The company evolved into one of the leading peanut and snacks companies in Mexico, producing a long list of private label items for Sabritas. In 1990 the company moved from Mexico City to Cuautla Morelos (45 miles). The company processes and packages several peanut and snack-seed products. Their installed production capacity reaches 80,000 tons of peanuts and seeds. The company manufactures and packs snack peanuts for Sabritas, Mexico’s largest snack producer and also sells peanuts in bulk, mainly for export to the U.S. This company also produces and packs all the peanuts that are consumed in Mexico’s three largest airlines, in Mexican busses and recently they began manufacturing snacks for Wall-Mart. They also produce smashed peanuts that are sold for the cookie maker Gamesa and for Mc. Donald’s. B) Main Products Produced and how are they packed
Product Brand Package Peanuts: Dry roasted and Japanese stile Aeroméxico, Mexicana,
Aerocaribe and Estrella Roja, Estrella Blanca, ADO, etc.
Flexible poli – propylene and polyester (mix) package 40 gr.
Peanuts and seeds: Salad, salad with lemon, spicy, spicy with lemon, Japanese, dry roasted, among others.
Sabritas Flexible poli – propylene and polyester (mix) package 100, 200, 400, 800 gr.
Peanuts and seeds: Salad, salad with lemon, spicy, spicy with lemon, Japanese, dry roasted, among others
Martin Cubero Flexible polyester package 10 Kg.
Peanuts and seeds: Salad, salad with lemon, spicy, spicy with lemon, Japanese, dry roasted, among others
Martin Cubero Sacks 50 Kg.
C) Installed Packing Machinery Most of the company’s packaging machinery is Mexican and Brazilian. The purchasing decisions for these machines were made more than 20 years ago when it was difficult and expensive to import machinery and the Mexican manufacturers were highly cost-competitive. Some of the Brazilian packaging machinery that the company owns was acquired by their Argentinean plant and later transferred to Mexico. The company is not satisfied with the results of these machines as they are less reliable and efficient than other alternatives in the market.
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The most relevant packaging machinery installed in Martin Cubero (Mexico Plant) includes:
Current Machinery Used
Brand Units Origin Average Age Specification
Vertical form fill and seal machines
Masipack Env - A – Flex
10 21
Brazil Mexico
3 20
70% 90%
Gravimetric filling machines
Masipack Ishida
10 3
Brazil Japan
3 5
90% 90%
Sack filling and closing machines
N/A 3 USA 3 70%
Case tapers N/A 2 USA 10 90%
D) Last Packaging Machinery Purchase The latest major packaging machinery purchase took place in February 2006 when the company, through its subsidiary in Argentina purchased machinery for both plants from the Brazilian manufacturer Masipack. For the Mexico plant they acquired 1 Vertical form fill and seal machines and 3 Gravimetric filling machines. This project represented investments for over US$460,000.
Machinery Brand Country Cost (Approximately) Vertical form fill and seal machines
Masipack
Brazil US $ 270,000
Gravimetric filling machines
Masipack
Brazil US $ 190,000
E) Future Packing Machinery Ordering Plans. 2004-2005 The company will purchase a new line of gravimetric filling machines for various types of peanut product presentations. The purchase will be for increasing production capacity as product demand continues to grow significantly. The company will conduct significant equipment purchases over the following two years, some of the equipment will include bagging, cartoning and palletizing machines. The company’s objective is to increase the efficiency of the packing process though automation. The company sets a yearly budget for modernization and expansion, however due to the company’s policies they didn’t reveal their 2006 or 2007 budgets. We estimate that this company will spend approximately US$500,000 million per year in the following two years. The purchasing plans call for purchasing the following machinery in the following months:
Machinery Units Origin Motive of Purchase Estimate Budget Bagging machines TBD TBD Improve process TBD Palletizing machine TBD TBD New process TBD Gravimetric filling line TBD Brazil Expansion TBD Cartooning machines TBD TBD Improve process TBD
F) Purchasing Policies and Financial Arrangements The company purchases its packaging machinery directly form the manufacturers and they receive training to operate and give minor maintenance to the machines Esther from the manufacturer or their representatives in Mexico. As some of its machinery is very old, they have to manufacture in workshops some of the spare parts and this has caused that some of their old machines loose precision and efficiency. In the case of the newer American and Japanese machines, they purchase spare parts directly with the manufacturers and when major maintenance is needed the company hires the manufacturer’s technicians.
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For new packaging machinery purchases, the company seeks for all alternatives available in the market. They focus in companies manufacturing machinery for packaging nuts, seeds and snacks. The identification of potential suppliers is done through contacts, companies that they meet in trade shows and through cambers and organizations. The company requests the supplier to have experience packaging nuts, and in some cases it requests the supplier to organize visits to plants where third parties are using their machinery so they can actually see the machines in real operation. The company follows the standard payment policies set by the suppliers, however they suggest to the supplier to accept payment terms of 50% down payment and the remaining balance after one month of operation. When the suppliers accept this terms the company considers this a plus for the final purchasing decision. G) Factors that Influence Purchasing Decisions
1. Functionality. 2. Industry brand recognition. 3. Price and terms. 4. Spare parts availability. 5. Training.
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has preference to purchase the machinery directly with the manufacturers, or their representatives in Mexico. The company has preference for not using Mexican distributors as they charge high overprices and adds little value. Every time that they purchase a new machine, they require the supplier to provide training for operations and maintenance. The company has no preference for a particular brand or product origin. They mentioned that they don’t judge the machinery depending on its origin as each manufacturer is different and in all geographies there are good and bad manufacturers. In general terms they ranked the machinery origin as follows: Origin Technology Flexibility Service Price United States Good Good Very Good Average Spain Average Very Good Average Good Germany Very Good Average Good Expensive Brazil Average Average Good Good Japan Very Good Very Good Very Good Expensive I) New Origin of Suppliers from Asia. The company indicated it has received information and evaluated the options presented by several Asian suppliers. The company is still not convinced by the technology or the quality of the proposed machines. The company indicated that the machines are very competitively priced and that some of the suppliers are establishing representation in Mexico both for generating sales as well as for providing servicing. J) Trade Show Attendance / Trade Publication Information The company’s top management and production manager visit Expo Pack in México and Brazil as well as Snack Expo in USA. K) Specific Interest
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The company is interested in receiving information form packaging machinery suppliers for the snack industry, particularly on manufacturers of the following equipment:
• Vertical form, fill and seal machine for different types of peanuts, seeds and nuts. • Weighing machines • Sack fill and close machines • Cartooning machines
L) Contact Information Company Name: Grupo Martin Cubero Contact: Ing. Edgar Suárez Position: Production Manager Address: Calle 10 de Abril # 44 Col. Gabriel Tepepa 62742, Cuautla Morelos, México Telephone: (52735) 354-1820 Ext. 109 Fax: (52735) 354-1868 e-mail: [email protected] Web page: www.martincubero.com.mx
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Nestlé de México, S.A. de C.V.
Industry: Food and Beverages Sub Industry: Beverages, Milk products, nutrition
and ice cream, prepared dishes, cooking aids and pet care, chocolate, confectionery and biscuits
Location: Mexico City Size: (sales) $2 billion USD Purchasing Potential:
$1 million USD
Specific Business Opportunities:
New packaging developments in the food and beverage industries. All kind of bottle and packaging machines. Also can manufacturing machines.
A) Company Description The Nestle group is one of the largest food companies in the world with 224,541 employees and 479 factories world-wide. The company has experienced explosive growth in Mexico over the past ten years because of a combination of growing product demand and the acquisition of a long list of local food companies. Nestle started production in Mexico in 1930 with the production of soluble coffees and chocolates. By 2006 the company operates 13 manufacturing plants which produce from coffees and power bars to pet foods. The Mexican operations export to the several international markets including the U.S., Central America and the Caribbean. Nestle is not only Switzerland's largest industrial company, but it is also the world's largest food company. Its products are available in nearly every country in the world. Nestles’ global manufacturing policies have a direct impact on their operations in Mexico. The company’s top objective has been to improve manufacturing efficiency at all its plants. B) Main Products Produced and how are they packed Nestle's diverse brands have allowed the company in Mexico to establish a significant market share in throughout diverse processed food product sectors. Currently the company has products that go from ground coffee to canned food products. Their six corporate brands, Nestle, Nescafé, Nestea, Maggi, Nido and ProPlan contribute a 75% of the group's total sales, with the Nestlé brand by itself contributing 40%.
Product Brand Package Roast & ground coffee Nespresso, Bonka Vaccum Bags Soluble coffee Nescafé, Taster's Choice,
Ricoré Glass jars, PP bags and steel cans
Infant foods Nestlé, Nestogen, Cérélac, Neslac, Nestum
Glass jars & Steel cans
Water Nestlé Pure Life and Santa Maria
Pet bottles
Other beverages ( teas, chocolate powders, specialty milks, syrups)
Nestea, Nesquik, Milo, Carnation, Caro
Steel cans
Breakfast cereals Nestlé, Cheerios, Trix, Gold, Fibra Max, etc.
Polypropylene bag in carton box.
Performance nutrition PowerBar Aluminized bag Culinary products (bouillon, soups, seasonings, prepared dishes, canned food, pasta, sauces)
Maggi, Buitoni and Crosse & Blackwell
Glass jars and Polypropylene bag in carton box.
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Ice cream Nestlé, Frisco and Camy Sticks and plastic containers Chocolate and confectionery
Nestlé, Crunch, KitKat, Galak/Milkybar, Smarties, Baci, After Eight, Baby Ruth, Butterfinger, etc.
Aluminum foil, plastic bags, and carton boxes.
Pet Care Friskies, Alpo PP Bags C) Installed Packing Machinery The following table presents and updated description of Nestles’ the installed machinery in Mexico. In recent years, the company has increased their European machinery purchases because they indicate to have had better results. For example, they no longer buy any Angelus machinery from the US, as they have switched for Ferrum, a packaging manufacturer from Switzerland. This equipment has given the company better and more production capacities as well as better post-sale services. Service was a key factor in the decision.
Current Machinery Used Brand Units Origin Average Age Specification (%)
Powder Filling Machine Albro 6 UK 15 85 Volumetric Filling Machine Nalbach 6 USA 15 85 Forming and Sealing Machine
Volpack 9 Spain 7 Variable
Forming and Sealing Machine
Embaflex 9 Mexican 8 Variable
Forming and Sealing Machine
Triangle 1 USA 17 Variable
Weld Sealing Machines Soudronic 11 Switzerland 6 85 Screw Capping Machines Nalbach
Pneumatic Scare
4 USA 10 85
Closing Machines Angelus 16 USA 5-15 85 Labeling Machines Burt 6 USA 5-20 85 Labeling Machines Krones 6 Germany 5-20 85 Labeling Machines Sacmi 2 Italy 5-20 85 Coding Machines Videojet >20 USA 7 85 Carton Forming Machines KistersKayat 8 USA 10 85 Carton Forming Machines Packmatic 1 Brazil 2 85 Pallet Forming Ocme 4 Italy 10 85 Levelers Bh 2 USA 2 85 Paletizers Samoui 2 Spain 2 85 Stick Packs Shmuker 6 Italy 3 85 Thermo forming machines Serac 3 France 2 have 15
years and 1 has only 1
year.
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Liquid filling machines Serac 2 France 4 90 Can closing machines Ferrum 3 Switzerland 1 90
D) Last Packaging Machinery Purchase Nestle makes all of their purchases through their international purchasing company: Nestrade. All machinery evaluations, studies, negotiations and purchasing terms are done by Nestle itself but then the final purchasing decision is responsibility of Nestrade. Nestle’s Mexican offices justifies the investment requirements and then seeks approval from Nestrade. Their last purchase of packaging machinery was in 2005 where they acquired a carton former and a stick pack. The reason for these purchases was that the company needed new trays to form different kinds of carton boxes. These recent purchases were required to produce new packing presentations.
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Machinery Brand Country Cost (Approximately) 1 Carton Former Kayat USA $225,000 1 Stick Pack Shmuker Italy $200,000
E) Future Packing Machinery Ordering Plans. When Nestle decides to purchase new machinery, different processes are done in order to justify the investment. For example, they usually buy machinery to expand production capacity at a plant or to begin the production of new products, automation of existing lines or replacement of old equipment. Nestle has a policy where they try to satisfy most of the maintenance needs through their in-house technical staff. When a new machine is purchased, Nestle requests their supplier to train their in-house maintenance staff. When major repairs are necessary, these are conducted by the equipment manufacturers with which Nestle negotiates service agreements. Nestle purchases original spare parts, to assure that their equipment operates according to its specifications. The company’s packing machinery purchasing budget for 2006 is approximately: $1 million USD
Machinery Units Origin Motive of Purchase Estimate Budget Doy Pack type filling machines / Mespack or Efitek
1 or 2 Spain Expand facility N/A
Carton forming/ PackMatik
1 Brazil Change of old Units. $110,000 USD
Can closing machines / Ferrum
N/A Switzerland Replacement of Angelus equipment.
N/A
The company recently acquired two Packmatik machines from Brazil. This purchase resulted from having received very attractive pricing and the expectation that the equipment will provide better performance over the previous supplier. They indicated that – in their experience- these machines have provided more flexibility, better operating capacities and cost reduction over those of US based, KistersKayat, which was their previous supplier. Nestles’ future purchases will focus on continue replacing KisterKayat with Packmatik. The company indicates to be receiving adequate service form the supplier. The company will also initiate a program to replace its existing can closing machines. The previous supplier was Angelus, but Nestle considers that the company has either lost interest in Mexico or in Nestle as the response to the companies requests has been inefficient. The company has been late in meeting equipment delivery dates and has demonstrated little interest in maintaining its business relationship with Nestle Mexico. The company is considering Ferrum as the new supplier for can closing equipment. Ferrum’s has improved as a supplier both in terms of servicing the clients as well as the incorporation of new technology into their machines. This company has showed good quality, experience and compromise, and fast delivery . Ferrum’s strengths according to Nestle Mexico include:
• More durable • Excellent quality • Better price • Excellent delivery services and post-sale services • Flexible • Fast spare part product delivery
F) Purchasing Policies and Financial Arrangements
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Nestle’s purchasing unit, Nestrade, is responsible for the negotiation with suppliers, negotiating purchasing terms, obtaining financing and all aspects related to purchase closing. Nestrade is in charge of consolidating the different purchases done by Nestle´s plants worldwide. After the plants negotiate prices with the suppliers, Nestrade tries to obtain preferential conditions. Currently, the company has established several agreements with some packaging machinery manufacturers. Nestle´s only commercial agreement is with the company Soudronic a company dedicated to the manufacturing of cans. With other machinery suppliers the company only works with financial agreements at the moment of the negotiation. G) Factors that Influence Purchasing Decisions When Nestlé Mexico selects a new machinery supplier, they evaluate at least three alternatives. The Mexican operation prefers to purchase from suppliers with which they have worked in the past and have demonstrated to be reliable. The decision factors in Mexico include the revision of the following aspects: 1. - Equipment reliability and experience at other plants (if any) 2.- Equipment flexibility and compatibility 3.- Service 4.- Delivery Time 5.- Price of the equipment. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has no particular preference for any brand. The only existing business arrangement as mentioned earlier, is with Soudronic. This brand has worked several years with Nestle and is considered by the company as one of the best welding machinery manufacturers because of their quality and good service. Nestle considers both American and European machinery as excellent technologies but in the last few years, they have had better results with the European suppliers. Nestle mentioned that they have noticed a significant and continuing decline in client service commitment and quality by US suppliers. Especially on commitments to firm deliveries and post-sale service. They mention that they consider that over the past three years US suppliers have become careless in regards to maintaining good relationships with clients. The company also mentioned that they have begun evaluation a series of Latin American packaging equipment suppliers and that they consider to have found excellent technologies and innovations. Currently, the company is planning to purchase new machinery from Brazil since they consider their technology, prices and flexibility as optimum for Nestle’s production objectives. Origin Technology Flexibility Service Price United States Good Regular Bad Regular Germany Very Good Good Good Regular Italy Very Good Good Good Regular Switzerland Very Good Good Good Good
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I) Weaknesses and Strengths of the installed machinery. Brand: Shmuker Strengths:
• Efficient • Known in the market • Easy to use • Good spare part deliveries and prices
Weaknesses: • Expensive Spare Parts
Brand: Angelus Strengths:
• Robust • Easy to use
Weaknesses: • Expensive Spare Parts • Bad Service • No compromise • Defected machinery
J) New Origin of Suppliers from Asia. The company has not received any proposal from Asian packaging machinery suppliers, but has had meetings with a few companies. Nestle considers that these suppliers are offering very good pricing but that they are still years away from incorporating the technologies or having the quality required by Nestle. , but they have met some suppliers. Although they do not have any kind of policy that restricts the purchasing of machinery from Asia, it all depends on the internal tests and evaluations done by the company. However, Nestle is not considering to study and to learn more about these manufacturers for the moment since the technology and services are not sufficient for the company’s standards. However, they mentioned that the prices and the flexibility of the equipments are very attractive. For the future, if Asian suppliers demonstrate that they could meet with all of Nestle´s requirements they could be considered as potential suppliers. Nestle doesn’t know of any current supplier that has gone to Asia in order to reduce manufacturing costs. K) Trade Show Attendance / Trade Publication Information Nestle has an extensive list of expo which they visit during the year. Among the most important shows are Pack Expo, Expo Pack, Interpac, and Hispac. Another important information source for the packaging industry is different magazines such as Industria Alimenticia and Packing Digest magazines. The company also works with the internet as a source to find more about the latest technologies and news of the industry. L) Specific Interest The company is constantly analyzing packaging machinery options. Nestle is recognized as an innovative company so they are particularly interested in new packaging developments in the food and beverage industries. All kind of bottle and packaging machines. Also can manufacturing machines. M) Contact Information Company Name: Nestlé México, S.A. de C.V. Contact: Ing. Gabriel Valencia Mulkay Position: Underdirector for Packaging Unit Address: Av. Ejército Nacional No 453
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Col. Granada C.P. 11520, México D.F. Telephone: (5255) 5262-5000 ext. 1625 Direct line: (5255) 5262-5052 Fax: (5255) 5262-5472 e-mail: [email protected] page: www.nestle.com.mx
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Pilgrim’s Pride S.A. de C.V.
Industry: Food Sub Industry: Chicken and Egg Products Location: Tepeji del Rio, Hidalgo Size: (employees)
5,000
Purchasing Potential:
$150,000 USD
Specific Business Opportunities:
Sealing vacuum machines and Thermo filling machines
A) Company Description Pilgrim's Pride was established in 1946 and has become the second largest vertically integrated poultry company in the US . The company’s leading products include chicken eggs and meat. Operations in Mexico begun 17 years ago and at present consist of three processing facilities and 17 distribution centers. The processing plants operate under TIF Mexican federal standards, which are similar to USDA standards. B) Main Products Produced and how are they packed Most of the product presentations in the Mexican market are similar. The following table provides some further details on their leading products:
Product Package Whole Chicken In bulk (20 kilos presentation) in plastic box. Value added Chicken (Chicken with flavor)
5 to 10 kilo presentation (cardboard box)
Value added Chicken Unicell Tray Value added Chicken Vacuum plastic bag
C) Installed Packing Machinery The company provided descriptive and not complete information on their existing machinery including packing infrastructure. The company indicated that they have a combination of equipment from US and European suppliers but that the origin of the machinery is not a factor considered in supplier selection or purchasing decisions.
Current Machinery Used Brand Units Origin Average Age Specification Tray pallet machine Pacmac 10 USA 4 w/10 years
6 w/ 5 years 85%
Pallet machines Ozzi 2 Spain 5 80% Vaccum sealers Ultravac 1 Holland 3 80% Vaccum sealers N/A 1 USA 2 85% Slicing machines Ros Slicers 1 USA 3 85% Sausage machines Sadman 1 Germany 8 85% Marinating machines Domit 2 USA 15 85%
D) Last Packaging Machinery Purchase
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The company’s most recent machinery purchase was in 2005 with the objective of improving presentation quality. Pilgrims’ is interested in continuously improving the packaging and presentation of their products.
Machinery Brand Country Cost (Approximately) Marinating machines Magnum Holland 40,000 Euros 2 Bag sealing machines N/A USA US$5,000
E) Future Packing Machinery Ordering Plans and Purchasing Policies The company follows a careful procedure for the selection of machinery suppliers. The company emphasized its interest in improving product presentation as it considers that it has a direct impact on product perception by consumers.
Machinery Units Origin Motive of Purchase Estimate BudgetThermo filling machine 1 USA Improve product
presentation. TBD
The machine in the table is just an example of the type of equipment that Pilgrims is planning to purchase over the following few months. The company has a minimum purchasing budget of US$ 150,000 for 2006. The engineering department is continuing a series of evaluation its packing infrastructure at their three plants to define the specific equipment they will be interested in purchasing. The maintenance department at Pilgrims is responsible for the selection of potential packing machinery suppliers. It is not uncommon to receive recommendations from the corporate office in the US regarding suppliers of packing machinery which could be useful for the operation in Mexico. If the selection of the supplier is made at the local level, the maintenance office makes sure that suppliers’ proposed equipment meets the standards of the equipment already in operation at their Mexican plants. Experience with the supplier in the US operation of the company carries a significant weight in the supplier selection process. The company normally requests detailed equipment information and proposals from two or three potential suppliers. The company looks for the following: 1.- Experience in the industry 2.- Maintenance requirements 3.- Solid servicing capabilities and spare parts availability 4.- Capacity to diligently solve major maintenance or repair needs F) Financial Policies and Arrangements In those cases where the equipment and supplier selection are carried independently of the headquarters in the US, the operation in Mexico requires to present an ROI analysis as well as a report indicating the process and reasons for selecting a particular parking machinery supplier. The corporate office in Mexico is responsible for authorizing the purchase. The company’s payment policies are 30%-40%-30%. The first payment is when the company signs the purchase order, second payment is alter the company tests the machinery and the third is once the equipment is in operation at the plant in Mexico. G) Factors that Influence Purchasing Decisions
1. Flexibility 2. Spare parts availability 3. Servicing 4. Pricing 5. Brand, supplier reputation and possible pre-existing relationships with headquarters
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H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company indicated they do not have a preference for any particular equipment supplier and that they are most interested in working with suppliers which are committed and reliable, especially in terms of spare part availability and fast response to potential repair or maintenance needs. Over the last few years, Pilgrims´ impression of European suppliers has improved. <They consider that in their particular industry, US machines are more solid and lasting, but have also created more serious maintenance problems, which have caused to stop production lines. They indicated that in the perception US suppliers are very good and solid companies but that they Europeans have very fast cached up and passed their competitors, especially as they are very focused on client needs and in developing a long term business relationship. The company indicated that European equipment is simpler, easier to operate and require substantially less maintenance. Origin Technology Flexibility Service Price United States Good Regular Good Regular Germany Very Good Very Good Regular Regular Spain Good Good Good Good I) New Origin of Suppliers from Asia. The company has no information nor has it been in contact with Asian suppliers. They indicated that do not have interest for the moment in locating Asian suppliers as they consider that machinery from that region continues to be of lesser quality than other existing options. The company is also unaware of any of its suppliers moving manufacturing to China as a strategy for cost reduction. J) Weaknesses and Strengths of Installed Machinery. Brand: Pacmac Strengths:
• Good technology • Availability of spare parts
Weaknesses: • Expensive
K) Trade Show Attendance / Trade Publication Information Pilgrim´s indicated that attending trade shows fro machinery and packing machinery are fundamental for learning about trends in the sector. The company visits Expo Pack and a poultry expo in Atlanta. The company also follows production trends in the sector by subscribing to specialized publications. L) Specific Interest The company is interested in thermo forming and vacuum sealing machines. M) Contact Information Company Name: Pilgrim’s Pride S.A. de C.V. Contact: Pedro Muñoz Position: Maintenance Manager
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Address: Antigua Carretera Mexico-Queretaro km 72.5 Col. San Mateo 2nda sección. 42850 Tepeji del Rio, Hidalgo Telephone: (52-773) 733-9229 e-mail: [email protected] page www.pilgrimspride.com
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Qualtia Alimentos, S.A. de C.V.
Industry: Food Sub Industry: Cold cuts and cheese Location: San Nicolás de la Garza, N.L.Size: (sales) 40 million dollars Purchasing Potential: TBD Specific Business Opportunities:
Vacuum packaging machine, Thermo forming machines. And a broker that distributes machinery spare parts in Mexico.
A) Company Description Xignux Group is the holding company of Qualtia Alimentos. The holding company has seven different business units and 27,000 employees. The company has sales and manufacturing presence in various countries in the American continent. Today they operate 35 manufacturing plants and 50 distribution centers throughout Mexico, the US, Brazil and Argentina. Xignux entered into the food business in 1976 and in 1994 entered into a joint venture with Sara Lee from the US. Qualtia Alimentos is dedicated to the cold cuts and dairy products. In Mexico the company has 3 production plants. Two of them are dedicated primarily to the production of cold meats and dairy products. The third facility only produces cheese products. The plants are located in San Nicolas de la Garza, Nuevo León; Tepotzotlán, State of Mexico; and Queretaro, Queretaro. Kir, Duby, Zwan and Caperucita are four of Qualtia’s brands that have had a successful market share in the cheese and cold meats industry in both Mexico and in international markets. Today, over half of the company’s production in Mexico is exported to over 40 countries. B) Main Products Produced and How Are They Packed
Product Brand Package Hams Kir, Duby Vacuum polyethylene film Salami Peperami Vacuum aluminum film Sausages Kir / Swan / Duby Tipper tie Pâté Swan Shrieked polyethylene (Bag/Pouch) Bacon Kir / Duby Vacuum polyethylene film Franks Kir / Swam / D’Pavo Vacuum polyethylene film Turkey products Kir / Swan / Duby / D’Pavo Various Cheeses Caperusita / Creso Vacuum polyethylene film and Plastic
containers C) Installed Packaging Machinery The company’s packaging machinery is focused mainly on vacuum packaging. They have had successful results with both European and American machinery. The following table presents some examples of their current packing machinery:
Machinery Type Units Origin Average Age
Specification
Vacuum packaging/ Multivac 5 Germany 10 85% Vacuum packaging/ Tiromat 3 German 10 85% Vacuum packaging/ Alcar 1 US 10 Vacuum packaging/ Rapid Pack 1 US 2 90% Sausage cramming machines/ Tausen 10 US 6 95%
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Sausage cramming machines / Hadman 6 Germany 6 100% Smoked machines/ Alcar 3 US 7 85% Injectors/ Metalquina 3 Spain 15 80% Mill machines/ Weyler 3 US 5 85% Vacuum packaging/ Tipper Tie 4 US 4 85% Pealing machine/ Apollo , Townsend 4
2 US US
21 6
85% 85%
Frankfurt and sausage loading machines/ Warwick Planet products (out of operation)
2 1
US US
20 12
90%
- Cheese filling machine/ Drake 5 US 2 90% Coding machines/ Video Jet 11 US 6 90% D) Last Packaging Machinery Purchase
Machinery Brand Country Cost (Approximately) 1 Thermo forming machine Tiromat Germany N/A
Qualtia did not purchase packing machinery during 2005. The last purchase was in 2004 consisting of a $500,000 dollar investment to expand packing machinery. Qualtia is committed to continuously looking for better product packing options as those improve product presentation and shelf life. E) Future Packaging Machinery Ordering Plans. The upcoming packing equipment purchasing budget will be developed over the second half of 2006. The company indicated to be experiencing excellent results from their existing suppliers and will purchase from those suppliers. According to the company, Multivac has been the best supplier in the past year because of their quality, service, technology and production capacity of their equipment.
Machinery Units Origin Motive of purchase
Vacuum packaging/ Multivac N/A Germany Expansion Thermo forming machines/Multivac N/A Germany Expansion Thermo forming machines/ Multivac N/A Germany Expansion
F) Purchasing Policies and Financial Arrangements Qualtia has the policy of purchasing directly from equipment manufacturers to obtain better pricing on both equipment as well as spare parts. The company works with local distributors to receive maintenance and equipment repairs. packing machinery purchasing policies include purchasing directly from the manufacturers. All purchasing decisions are made at the company’s headquarters in Nuevo Leon. The company ‘s payment policy includes upfront payment when the order is placed, milestone payments and a final payment once the equipment is in operation for two months at the plant. G) Factors that Influence Purchasing Decisions Equipment purchases are commonly from existing suppliers. In the case the company will purchase equipment not available from current suppliers they will request information from at least three supply options. The purchasing decision process receives input from the engineering and maintenance department and the purchase is conducted by the purchasing department. For future purchases one of the most important decision making factor is the availability of post –sale service.
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1. Capacity to provide timely service 2. Previous work experience with the supplier 3. machine construction quality and functionality 4. Price 5. Spare part availability 6. Workers and production safety
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. As mentioned earlier, the company indicated that they prefer to purchase machines from existing suppliers. The company has had good working experience with Tiromat and Multivac due to their advanced technology, quality, equipment safety and service. Company indicated to be interested in working only with suppliers which can offer a fast response to spare parts, repairs or maintenance needs. The company has no preference between European or American packaging manufacturers as they consider that suppliers from both regions present viable alternatives. They indicated that US suppliers are less vertically integrated that their European competitors and that this sometimes creates problems, as usually slows the process for obtaining spare parts. The company evaluates equipment by country of origin as follows: Origin Technology Flexibility Service Price United States Good Good Good Regular Germany Very Good Very Good Good Regular Spain Good Good Regular Good I) Weaknesses and Strengths of the installed machinery. Brand: Tiromat Strengths:
• State-of-the-art technology • Easy to Use • Good Technical Assistance
Weaknesses: • Difficult availability of spare parts
J) New Origin of Suppliers from Asia. The company has not been in contact and has no information on potential suppliers from China. The company indicated interest in learning about this options as they have heard that product quality and technology are improving at the time of offering very competitive pricing. K) Trade Show Attendance / Trade Publication Information The main trade shows that Qualtia visits are Pro-Empaque, Expo Pack and Pack expo. They told us that in these expos allow to obtain excellent information on trends in their sector. The company is also subscribed to specialized magazines with concentration on their industry. L) Specific Interest The company is interested in receiving information for high speed and large volume vacuum packing systems, thermo forming machines, and a broker that distributes machinery spare parts.
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M) Contact Information Company Name: Qualitia Alimentos, S.A. de C.V. Contact: Mr. Carlos de la Cruz Position: Purchasing Manager Address: Av. Conductores #600 Col. Lagrange 66490,San Nicolás de los Garza, Nuevo León Telephone: (52-81) 8030-3000 Fax: (52-81) 8030-3038 Mail: [email protected] page: www.qualtia.com
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Sabormex, S.A. de C.V.
Industry: Food, personal care, beverages
Sub Industry: Canned beans, coffee, sports drinks, shampoo, catsup, dressers, canned, fruits vegetables and hot peppers, marmalades, vinegar among others.
Location: Puebla, Puebla Size: (sales) Over US$ 120 million Purchasing potential: US$ 4 million for 2006 Specific Business Opportunities:
Tray erecting and filling machines, metal detectors, palletizers, laser codifiers and cleaning equipment for plastic bottles (blowers).
A) Company Description: Sabormex is a privately held Mexican company established in 1964. At present they operate one plant located in Puebla and their headquarters and distribution center is located in Mexico City. The company produces various product categories with over 60 different presentations. Their brands include “La Sierra” for canned beans, instant soups and chilaquiles (tortillas soaked in hot pepper sauce), “Legal” for ground and soluble coffees, “Clemente Jacques” for catsup, salad dressings and condiments, canned, fruits vegetables and hot peppers, marmalades, vinegar, “Enerplex” for isotonic refreshments, “Magnaflex” for shampoos and “Tazza” gourmet coffe. Sabormex exports mainly into the Hispanic market in the US as well as other world markets including El Salvador, Guatemala, Venezuela, Colombia, Panama, United Kingdom, Spain and Germany. The company was acquired by La Costeña in late 2000 and the group continues to modernize and automate all their production lines. The company recently acquired the can beans line from Nestle and they will commercialize the brand under the name Maggi through 2006, after this year they will incorporate the production to La Sierra brand. B) Main Products Produced and How Are They Packed:
Product Brand Package Beans La Sierra Cans Beans Maggi (Nestle) Cans Coffee Legal Plastic bags, cans and glass flask Sports beverage Enerplex PET bottle and glass bottle Shampoo Magnaflex PET bottle Soup La Sierra Styrofoam cups, metallic bags Chilaquiles La Sierra Plastic bags and cardboard box Catsup Clemente Jacques Squeezable PET, glass bottles and can Dressers Clemente Jacques Squeezable PET Hot peppers Clemente Jacques Can and glass bottles Vegetables Clemente Jacques Can Fruits Clemente Jacques Can Marmalades Clemente Jacques Glass bottles
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Vinegar Clemente Jacques PET bottles C) Installed Packaging Machinery: The following table contains the complete packing machinery inventory of Sabormex in the Puebla plant.
Current Machinery Used Units Origin Average Age
Specification
Tray Erecting and Filling Machines / CERMEX (Sidel)
4 France 1 95%
High speed plastic bag pouching machine / Cloud
1 USA 1 95%
Try case cartoning machine / PMI 1 USA 1 95% Tray Stretch Banding Machine / Polipack-six pack
3 USA 9 80%
Bag Packing Machinery / Triangle, Envaflex, EMZO, SERPAC
8 USA/ MEX 10 80% Argentina
Spain Can Sealing Machines / Angelus 6 USA 16 80% Can Filling Machines / ELMAR 5 USA 16 80% Shrink wrapping machine (six pack) / ARPAC 1 USA N/A 80% Filling machine (soluble coffee) / Nalbach 1 USA 10 80% Filling machine / HEMA 2 France 12 80% Filling machine / Tremark 1 France 1 80% Can closing machine / Ferrum 4 Switzerland 4 90% Can filling machine / Ferrum 1 Switzerland 4 90% Capping machine / Packwest 1 USA N/A 80% Capping machine / Zalkin 3 France N/A 80% Capping machine / Arnol 1 Italy N/A 80% Capping machine / Regina 1 USA N/A 80% Bottle orienting machine / Posimat 4 USA 15 90% Bottle orienting machine / US Bottler 1 USA 18 85% Liquid filling machine / Sympack – BC 1 USA / Italy 14 85% Cartoning machine / Samovi 11 Spain 12 85% Cartoning machine / Econocorp 1 USA 18 85% Filling machine / Ronchi 1 Italy N/A 80% Labeling machine / Auxiemba 4 Spain 8 80% Labeling machine / Bear 4 USA 8 80% Labeling machine / Taxta 1 Spain 5 80% Labeling machine / Clevern 3 Italy 9 80% Pre-gummed Label Applicators / Neway 5 USA 14 80% Gravimetric filling machines / Solbern 4 USA N/A 85% Gravimetric filling machines / Envaflex 3 Mexico 12 85% Pallet dismantling machines / Krones 2 USA 14 80% Conveying systems / CSI 2000
mts. Holand 5 90%
Pallet machines 7 CSI 2 Holand 5 90% Bean Cleaners / Cnippen – Mercator 3 USA 14 80% Bean Washing and Rinsing Machines / Olney 2 USA 14 80% Batch sterilizing machines / Jersa 2 Mexico 11 80% Batch sterilizing machines / STOCK 8 Germany 11 80% Orbital pallet wrappers / Lantech 2 USA 5 70% Codifiers / Paragon, Linx, Video jet, Sanazzi, Markem, Marshal, Taptone
56 USA, Italy N/A 85%
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Metal detectors / Peco, Fortress, S&H, Taptone and Thermo Gorinker
12 USA N/A 95%
Weightier / Ishida 1 Japan N/A N/A Ink dispenser / Bedford 1 USA N/A N/A Adhesive dispensing systems 40 USA 16 80% Tape dispensing machines / Little David 5 USA N/A N/A
D) Last Purchases of Packing Machinery. Sabormex’s last purchase took place during 2005 and 1Q 2006. The following list shows their latest purchases. They spent around $3.1 million in 2005-2006 period.
Machinery Brand Units Country Tray Erecting and Filling Machines CERMEX (Sidel) 4 France High speed plastic bag pouching machine
Cloud 1 USA
Try case cartoning machine PMI 1 USA Filling machine (solids, liquid and oily products)
Tremark 1 France
E) Future Packaging Machinery Ordering Plans. The company recently approved a US$ 4 million dollar budget for the purchase of new machinery. Most of this investment will be destined for cleaning, packing and palletizing machinery. Among the most immediate purchases, Sabormex is considering the following:
Machinery Units Origin Motive of purchase
Estimated Budget
‘000 Tray Erecting and Filling Machines / CERMEX (Sidel)
4 France Expansion US$900
Horizontal pouch machine / Rovema 1 USA Replacement US$300 Palletizing unit / SCI 3 Holland Automation TBD Palletizing unit / OCME 2 Italy Automation TBD Palletizing units / Lantech 2 USA Expansion US$190 Metal detectors / Fortress 4 USA Replacement US$280 Laser codifiers 4 TBD Replacement TBD Cleaning equipment (blowers) / Paxton or Sonic
5 USA Expansion TBD
F) Purchasing Policies and Financial Arrangements. Sabormex key vision in regards of equipment and machinery purchases is that they must contribute to a permanent effort to maintain a world-class state of the art production standards. The second criteria are to select equipment that most efficiency allows to increase production capacity to face growing demand. The company produces a list of the required equipment and visits trade shows to evaluate which particular machines and suppliers can satisfy their needs. In most cases they request the supplier to arrange for a visit to see the equipment in operation at some facility. They regularly visit Expopack in Mexico City, Las Vegas and Chicago as well as Interpac in Germany. When selecting equipment, they also take into consideration the equipment recommendations they receive from their –sister- companies like La Costeña. The company used to consider Angelus as the leader in can closing machinery and purchased exclusively from that supplier for machines with that purpose. The company considers that
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service quality plummeted and has begun a program to replace all Angelus machines for Ferrum from Switzerland. The company is interested in working with suppliers which are committed to their clients and willing to support them with adequate servicing. The company gives the supplier a down payment and sets a payment schedule during the time before the delivery process. A final payment is made once the machine is operating at their facility. During the –start-up – process for new machinery, the company expects the supplier to provide training to their maintenance staff. The training includes; indications as to the correct operation of the machine, basic trouble fixing , as well as how to replace the most commonly used spare parts. All major maintenance or service should be performed by the manufacturer. G) Factors That Influence Purchasing Decisions. 1. Increase productivity of their current processes 2. Recommendations from other users of the proposed machinery. 3. Proved experience within Mexican market 4. Technical support 5. Price. H) Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers: The company when selecting new equipment considers both North American as well as European suppliers. The company does not purchase Asian machinery as it considers that the materials used by these suppliers are of lesser quality, than those of other machinery suppliers. Sabormex´s evaluation of packing machinery according to its country of origin: Origin Technology Flexibility Service Price United States Very Good Good Good Good Spain Very Good Very Good Very Good Good Germany Very Good Very Good Good Regular Italy Very Good Very Good Good Good France Very Good Very Good Very Good Regular Switzerland Very Good Very Good Very Good Good I) New Origin of Suppliers from Asia. The company indicated that their perception on Asian equipment is that the price is good but the quality is low, They made the comment like it would be like purchasing disposable equipment, They indicated to know that there are significant technology and quality progresses being achieved by these suppliers which could change the landscape in a few years. The company indicated to be unaware of any of their current suppliers shifting production to China to reduce equipment costs, J) Trade Show Attendance / Trade publication Information: The trade shows they attend are primarily PMMI’s Expopack (Mexico, Las Vegas and Chicago).The company constantly receives equipment brochures from various suppliers. The company also receives several trade publications that present information on new machinery like Mundo Alimentario, Énfasis Alimentario, Industria Alimentaria and Carnilac. K) Specific Interests Sabormex is interested in receiving information on metal detectors, palletizers, laser codifiers and cleaning equipment for plastic bottles (blowers).
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L) Contact Information: Company Name: Sabormex, S.A. de C.V. Contact: Ing. Javier Segura Orive Position: Director of Manufacturing and Engineering Address: Calz. La Viga #1214 Col. Apatlaco 11570, México D.F. Telephone: (5255) 5448-2142 /61 Fax: (5255) 5448-2125 E-mail: [email protected] page: www.sabormex.com.mx
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Sigma Alimentos, S.A. de C.V.
Industry: Food Sub Industry: Processed meats, yogurt,
cheese and prepared meals. Location: Monterrey, N.L. Size: (sales) Over US $ 1.5 billion. Purchasing Potential: Over US$ 3.5 million Specific Business Opportunities:
A) Company Description Sigma Alimentos is a Mexican company established in 1971 and is the market leader in Mexico in the production and distribution of processed meats, pre-cooked meals, and dairy products. Sigma Alimentos is a subsidiary of one of Mexico’s largest industrial groups called Grupo Alfa. In 2005, the company sold around US$ 1.7 billion employs about 23,000 people and produced over 890,000 metric tons of processed food. Sigma Alimentos is divided in different companies operating in the processed foods sector. The most important division is cold meats where they have a 63% market share in Mexico. They have a dairy products division which has a 31% share of the local market, followed by a pre-cooked meals company with a 6% share. The company has twelve plants for processed meets, thirteen for dairy (yogurt, cheese and other products), 3 for processed pre-cooked meals and 1 for beverages. The company has 114 distribution centers throughout Mexico. The company exports their products into the US, Guatemala, Honduras y Nicaragua and has production operations in El Salvador and Dominican Republic. At present the company has more than 3,000 freeze vehicles. In 2004 the company entered into a agreement with Grupo Chen which was the leader in the dairy market in northern Mexico. This allowed Sigma to become the leader in the cheese market in Mexico. In 2005, the company acquired the facilities of New Zealand milk in Mexico and an additional company in the Dominican Republic, B) Main Products Produced and How Are They Packed
Product Brand Package Sausages, hams, turkey ham, bacon, salami, cheese or ketchup stuffed franks, clown-face shaped bologna and mini hotdogs.
FUD
Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Prosciutto, Italian Salami, Pepper Salami, Canadian Loin, German Leg of Ham, spiced sausages (Chorizo), Frankfurt Sausage and turkey products.
San Rafael
Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Salami, Ham, spiced sausages (Chorizo), and sausages.
Chimex Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Salami, Ham, bacon, spiced sausages (Chorizo), sausages and sliced hams.
Viva Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Barcelona ham, Spanish chorizo and turkey line.
Iberomex Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Low end Hams San Antonio Vacuumed plastic and shrink thermoformed plastic
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Sausages, Bacon and sliced hams.
Oscar Mayer Vacuumed plastic, shrink thermoformed plastic and tripper tie.
High end hams, sausages, aged meats, salamis and other specialties.
Tangamanga Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Hams Galicia Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Hams (exclusively for Republic Dominican market)
Jamón Picnic (Sosúa)
Vacuumed plastic, shrink thermoformed plastic
Turkey ham Checo Vacuumed plastic Hams, hotdogs, baloney, chorizo, bacon, specialty dishes, etc.
Vitta Vacuumed plastic, shrink thermoformed plastic and tripper tie.
Hams (exclusively for Costa Rica) Zar Vacuumed plastic, shrink thermoformed plastic
Yoghurt Yoplat, Yopli, Yopsi, Yop, Yoplus, Chen, Chenet and Nor-Mex
Polyethylene containers and tetra brick.
Cheese Noche Buena, Chalet, La Villita, Chen, Franja, Eugenia, Camelia, Norteño, Country Valley,Sosúa
Shrinking wrap and Polyethylene containers.
Beverages Café Olé Solé (Soy beverage)
Glass bottles Polyethylene containers
Mutton ( Barbacoa), Spiced Pork ( Pibil),Chicken in Mole sauce, to other typical treats such as “Flautas”, Tamales and “Dobladitas”, etc. Chicken nuggets, fish fingers, French fries and pizzas Fried Chicken, Seasoned Fried Chicken, Chicken Wings, BBQ Chicken Breasts, Chicken Supremes, Chicken and Broccoli Fettuccini, Lasagna, Mozzarella Nuggets and its delicious Coconut, Chocolate, Banana and Lemon Frozen Pies. Chicken nuggets, cheeseburger, pizza slices with vegetables, potatoes and dessert, as well as a dish for breakfast or lunch including waffle bars, syrup, potatoes and dessert.
El Cazo Mexicano Sugerencias del Chef Banquet and Healthy Choice, Kid Cuisine
Plastic bags Plastic bags and carton boxes Plastic bags, trays and carton boxes Plastic trays and carton boxes
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C) Installed Packaging Machinery The information we present in this profile was obtained from the cold meats and dairy divisions, so the information we received is related to the 25 plants operated by this divisions and represents the largest machinery inventory.
Machinery Type Units Origin Average Age
Specification
Vacuum packaging line / Multivac 60 Germany 8 95% Thermoform packaging line / Horizontal/ Tiromat 35 Germany 9 95% Bag, form fill and seal/ Koch 35 Germany 9 85% Horizontal thermo form fill and seal machine / MH 10 USA 7 85% Packaging line Case Ready with modified atmosphere / Ross
6 Germany 4 85%
Coding machines/ Video Jet, Image +150 USA 6 90% D) Last Purchase of Packaging Machinery This division’s last purchase of packing machinery took place in December 2005, when they invested US$ 3.4 million dollars to purchase two horizontal thermoform packing machines from the German supplier Multivac.
Machinery Brand Country Cost Thermoform packaging/ Horizontal Multivac (2 lines) Germany US $ 2,400,000
E) Future Packaging Machinery Ordering Plans. The company purchases equipment on a “manufacturing projects” basis and most new purchases are related to production expansion in their various lines as result of growing demand for their products. The cold meats and dairy divisions are developing a series of projects to expand production and renovation of old equipment in most of their manufacturing plants. This will imply the purchase of at least one new packing line for each facility. They consider that the equipment will most likely be a combination of Tiromat and Multivac. They have not defined potential suppliers for other related equipment. The projects also call for the renovation of existing equipment and automation of some processes. The company is also planning the launching of a new product for which they will need additional packing equipment for pasta. Sigma has a budget of over US$ 3.5 million for packing machinery purchases in 2006 and 2007 period.
Machinery Units Origin Motive of purchase
Estimated Budget
One new packaging line Multivac 2 Germany Expansion US$ 1.2 million Wrapping machine for multi-packaging with thermoformed polyethylene film
2 T.B.D. Renovation T.B.D.
Thermoform seal and plastic tray form for cheese products
2 T.B.D. Renovation T.B.D.
Metal detectors T.B.D. T.B.D. Improve security T.B.D. Capping machines 2 T.B.D. Expansion T.B.D. Cartoning machine 1 T.B.D. Expansion T.B.D. Automatic palletize 2 T.B.D. Expansion T.B.D.
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F) Purchasing Policies and Financial Arrangements Sigma indicates they have a well defined purchasing process. The company evaluates technical proposals from various potential suppliers (minimum 2), including proposed technology and servicing plan. Once the finalists are selected they purchase through a tender process. The company selects the supplier that presented the best technical proposal and offered better pricing. Sigma Alimentos requires for its investment budgets to by approved by its parent company; Grupo Alfa. The parent company assigns internal resources or arranges for financing. The company also considers vendor financing alternatives. G) Factors that Influence Purchasing Decisions 1. Quality and Efficiency 2. Price 3. Technical support and service 4. Brand recognition 5. Experience on the food business H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. Sigma Alimentos has a strong preference for vacuum packing equipment from two suppliers; Multivac and Tiromat. The relationship with these companies started several years ago, Sigma is very satisfied with the machinery and the serviced they are receiving in Mexico. The suppliers have dedicated technical staff in Mexico to service the Sigma account. As for other packing machinery the company indicated not to have a special preference for any supplier as long as the proposed equipment complies with specific manufacturing requirements. The company is open to evaluating new equipment technologies for their particular manufacturing and packing applications. I) New Origin of Suppliers from Asia. The company indicated that they would only purchase from leading equipment suppliers, which for the moment would exclude any Asian supplier. The company indicated they would never purchase Asian made equipment for their processing or packing operations which are critical. The company indicated to be unaware of any of their supplier shifting production to Asia to reduce costs. Sigma comentó que hasta el momento no ha considerado equipo de origen Asiático, The company evaluated suppliers by country of origin as follows: Origin Technology Flexibility Service Price United States Very Good Good Good Good Germany Very Good Very Good Very Good Regular Italy Very Good Very Good Good Regular Japan Very Good Regular Regular Good J) Specific Interest The company is interested in receiving information on equipment for their dairy and processed foods divisions including Thermoform seal and plastic tray form for cheese products, metal detectors, capping machines, cartoning machine and Automatic palletize equipment.
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K) Contact Information Company Name: Sigma Alimentos, S.A. de C.V. Contact: Mr. Santiago Sanpayo Position: Purchasing Manager for Imported Equipment and Supplies Address: Av. Vasconcelos #203 Ote. Col. Residencial San Agustin 66260, Garza García, N.L., México Telephone: (52-81) 8152-5100 Fax: (52-81) 8152-5174 Mail: [email protected] page: www.sigma-alimentos.com Company Name: Sigma Alimentos, S.A. de C.V. Contact: Mr. Mario Guzman Position: Plant Manager - Processed meets plant Address: Av. J. Cantú #1320 Col. Buenos Aires 64800, Monterrey, N.L., México Telephone: (52-81) 8748-1000 Fax: (52-81) 8152-5126 Mail: [email protected] page: www.sigma-alimentos.com Company Name: Sigma Alimentos Lácteos, S.A. de C.V. Contact: Mr. Daniel Chávez Position: Packaging Superintendent of Dairy Products Div. Address: Av. Vasconcelos No. 203 Ote Col. Residencial San Agustin 66260, Garza García, N.L., Mexico Telephone: (52-81) 8152-5100 Fax: (52-81) 8152-5140 Mail: [email protected] page: www.sigma-alimentos.com Company Name: Sigma Alimentos Congelados, S.A. de C.V. Contact: Mr. Guadalupe Salinas Garza Position: Plant Manager for the Prepared Meals Division Address: Ave. Industrial Alimenticia # 760 Col. Parque Industrial 67735, Linares, N.L., Mexico Telephone: (52-821) 212-6099 Fax: (52-821) 212-5625 Mail: [email protected] page: www.sigma-alimentos.com
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The most popular presentation in the Mexican beer market is returnable bottle, which accounted for approximately 60% percent of domestic beer shipments in 2005. Sin embargo está ganando mucho terreno la lata con nuevas presentaciones de productos que tradicionalmente se envasaban en botella de vidrio.
7. The Beverage Industry:
7.1. Industry Overview. Mexico continues as the second largest market for soft drink products in the world with an estimate average annual consumption of 39.1 gallons per capita. The Mexican refreshment industry produces close to 4 billion gallons par year.
Experts in the sector estimate that the popularity of the returnable bottle is attributable to its lower price to the consumer. While returnable bottles generally cost approximately twice as much to produce than non-returnable bottles, returnable bottles may be reused as many as 30 times before being recycled. Therefore, beer producers are able to charge lower prices for beer in returnable bottles.
The global consolidation tends in the beverage industries are also present with Mexican companies. Examples include the acquisition of Panamco by Femsa and the recent acquisition of Kaiser brewery in Brazil. There is also growing competition between local producers and multinationals including Coke and Pepsi. The local companies are being able to maintain and in some instances grow market share in some segments of the soft drink market.
7.2. Company Ranking by Size.
Mexico has a wide number of beverage producers, other than refreshments and beer, the country has an important base of tequila bottlers, rum bottlers, juice manufacturers, and water bottlers. In each category there are a few very large companies with over 500 employees and hundreds of small producers.
According to ANPRAC in Mexico there are approximately US$ 2 billion invested in bottling equipment for refreshments, and the companies invest on average US$40 to 60 million in bottling and packaging equipment per year.
7.3. Key Players.
In terms of beer, Mexico is the third largest beer producer in the world, with a production of more than 69.4 hectoliters per year. The Mexican beer Corona is the #1 imported beer in the U.S. and the single brand with higher exports in the world.
In the refreshments industry, FEMSA, the owner of the Coca-Cola license for the country controls close to 45% of the refreshments market. PEPSI is the second largest refreshment producer in the country with a 30% share. The dominance of these companies in the Cola market is being successfully challenged by Big Cola which has a minimum 5 to 7% of the market.
Mexico’s per capita beer consumption is 14.1 gallons per person, being higher in the northern region of the country. Beer production in Mexico is controlled by two large groups, Grupo Modelo, the manufacturer of Corona beer, and FEMSA, who control 95% of the total market. The remaining 5% is split between imports and microbreweries.
Mexico’s largest beverage bottlers include the following: Beer Production in Mexico
(In thousand hectoliters) Grupo 2005 %
Grupo Modelo 44,820.00 63% FEMSA 25,930.00 37% Total 70,750.00 100%
Source: FEMSA’s annual report.
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Company Main products
Sales 2004Million
US$ Coca-Cola Femsa Refreshments 4,227.00Grupo Modelo Beer 4,074.00PepsiCo de México Refreshments 2,776.00Femsa Cerveza y Subsidiarias Beer 2,270.00Embotelladora Arca Refreshments 1,260.00Grupo Continental Refreshments 907.00Grupo Embotelladoras Unidas Refreshments 453.00Jugos del Valle Juices 383.00Casa Cuervo Tequila 310.00Big Cola Refreshments 306.00Grupo Embotellador Bret Refreshments 177.00
Source: Expansión Magazine, Mexico’s top 500 companies.
7.4. New Packaging Trends. There is still significant growth in the bottled water market and every company that has the possibility to distribute the product is interested in developing a bottled water brand. Juice manufacturers and some milk manufacturers are also changing product presentations by introducing a cap to their tetra pack type presentations. Mexico will require high capacity beverage lines that can decorate de containers with specific promotions. There is demand for PET blowers to produce bottles with over 3 liters of capacity. Lower price and higher content are competitive strategies in the lower end of the market. Continued interest in the development and distribution of low cal beverages in 250 to 300 ml presentations. There is growing interest for European technology for aluminum can closing machines. Companies are using new materials for thermo shrink that would provide more resistance to transport the product. This eliminates the carton boxes. Interest in developing special containers for juices targeting the children market.
Containers with spaceship or robot shapes, etc.
7.5. Company Profiles.
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BACARDI y CIA., S.A. de C.V.
Industry: Beverages Sub Industry: Rum - Alcoholic Beverages. Location: Mexico City Size: (sales) US$ N/A Purchasing potential: US$ 150,000 Specific Business Opportunities:
Laser coding machines
A) Company Description: Bacardi and Company was originally established in Cuba in 1862. During the 1930’s the company initiated its international expansion which included the opening of a bottling facility in Mexico City. The existence of manufacturing assets outside of Cuba, allowed the company to survive after its property was seized by the communists in 1960. These assets included facilities in Puerto Rico, Mexico and Brazil. The company experienced tremendous growth during the 1970’s and is success has continued, being currently recognized as one of the world's top ten international brand names. In Mexico, the company owns several distilleries and three bottling plant located in the Tultitlan State of Mexico which is totally automated, La Galarza in the State of Puebla and Arandas Plant in the State of Jalisco which is partially automated. The company also has its Mexican headquarters at this facility. The company has 450 workers at their bottling plant and 115 at their headquarters. In 2002 Bacardi acquired the well positioned tequila brand Cazadores. The company also has the distribution of a Brown Forman product lines and Grey Goose Vodka for Mexico. B) Main Products Produced and How Are They Packed:
Product Brand Package Rum Bacardi Blanco,
Añejo, Solera and Oro
Glass bottles, plastic caps, labels and carton boxes
Tequila Cazadores 4 Vientos and Camino Real
Glass bottles, plastic caps, labels and carton boxes
Rum cocktails Bacardi Breezer Glass bottles, plastic caps, labels and carton boxes Brandy Viejo Bergel Glass bottles, plastic caps, labels and carton boxes
C) Installed Packaging Machinery:
Current Machinery Used Brand Units Origin Average Age
Automatic de-palletizing A-B-C Packaging Machine Corp
4 USA 8
Automatic de-palletizing OCME 1 Italy 6 Procomac 1 Italy 6 Horix AB 1 USA/Italy 7
KRONES, Inc 3 Germany 4 GAI 1 Italy 10
Rinsing machines:
US Bottler 4 USA 9 Air cleaning machine US Bottler 5 USA 10
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Horix 3 USA/Italy 19 KRONES 2 Germany 4 Horix AB 2 USA/Italy 7
Filling machine Zalkin 7 France 6
Capen 1 USA 16 Alkoa 1 USA 28 Arol 1 Italy 7
Closing Machine (Caps)
KRONES 8 Germany 8 JB 1 USA 8 GAI 1 Italy 15
Cold glue labeling machine
Hoppmann 7 USA 6 Labeling machines Videojet 7 USA 8 Ink code printers Videojet 8 USA 8 Ink jet printers OCME 7 Italy 10 Wraparound case packing machine Akron 2 USA 14
Meyer 1 USA 17 Drop packing machine OCME 7 Italy 4
Automatic Palletizing Foxjet 4 USA 9 Cartoon coding machine Marsh 4 USA 4
Bacardi’s packing line operates with excellent efficiency. They operate a 600 meter long chain conveyor line and 90 packing machines. D) Last purchases of Packing Machinery: In the period 2003-2004 this company spent US $4,600,000 on packing machinery, when Bacardi acquired a complete bottle rinsing, filling, capping line from Krones as well as complementary packaging equipment to increase their production capacity.
Machinery Brand Country Bottling line Krones Germany Cartooning, thermo shrink sleeve machine, labeling, inspection equipment, among others.
N/A N/A
E) Future Packaging Machinery Ordering Plans. Bacardi has a limited budget for packing machinery because it has recently performed significant investments The only assigned budget for 2006 is for the purchase of a series of laser coding machines, the company will spend US$ 145,000 for this project. The company indicated they have stopped some production lines as product demand has stalled, This has created that the company has excessive production capacity for the moment which eliminates short term potential demand for packing machinery. The company indicated they have an ambitious export program for the European and Asian markets which they will launch at the end of 2006. This focus on exporting to generating additional demand might in the medium term (2007 – 2008) initiate additional significant demand for packing equipment at this company in Mexico. F) Purchasing Policies and Financial Arrangements. The company has its worldwide headquarters in Monte Carlo. This office gets involved in equipment purchasing decisions as they have some worldwide agreements with equipment suppliers, but the final purchasing decision is reached in Mexico. The company is open to purchasing equipment from new suppliers, but will compare the proposed equipment with that of their existing suppliers. The company also evaluates new
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suppliers by verifying their existing client base and their sales penetration into major manufacturers. Once a purchasing decision has been reached, the headquarters in Monte Carlo negotiate the price and payment terms with the suppliers. The company usually gives a 50% down payment on the equipment and the final payment is made once the equipment is in operation at their facility. As for machinery from US or German suppliers, purchases are usually made directly to the equipment manufacturer. When they purchase new equipment, the suppliers are responsible for installing the machine and providing training to Bacardi’s employees. The Training process for Bacardi’s technical staff usually lasts between one and two months. This staff will be responsible for equipment maintenance and will also change some spare parts. The company has had good results with custom manufacturing some spare parts in Mexico. This has given the company savings of up to 70% in some components. G) Factors That Influence Purchasing Decisions. 1. Quality of the equipment 2. Technology. 3. Reliability 4. Service and Technical Support 5. Price H) Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers: Bacardi indicated to have a preference for European machinery suppliers for most of its processes, as the company considers that European equipment has better quality and superior technology. Specific brands are sometimes purchased because of previous good experience with the machinery and service, and because Bacardi would like to standardize the packing machinery. Bacardi’s policy is to purchase packing machinery for among the three top companies in each category of machinery. I) Trade Show Attendance / Trade publication Information: Bacardi visits the ExpoPack trade show in Mexico every year and Trade shows in the US, Germany and Italy. They are subscribed to trade publications like Packaging World and Control Engineering; they also receive information from various equipment manufacturers. J) Specific Interests Bacardi is interested in receiving information in general on the production and packaging of alcoholic beverages and particularly of laser coding equipment. K) Contact Information: Company Name: BACARDI Y CIA. S.A. DE C.V. Contact: Ing. David Muñoz Alcantara Position: Engineering and maintenance Manager Contact: Ing. Pablo Ismael Martinez Position: Packing maintenance Manager Address: Autopista Mex-Qro # 4431 Tultitlan, Estado de Mexico Telephone: (5255) 58 99 09 00, (5255) 5899 09 92
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Big Cola S.A. de C.V.
Industry: Beverage Sub Industry: Soda, water and beer Location: Mexico City Size: (sales) N/A Purchasing Potential: 30 million USD (worldwide) Specific Business Opportunities:
All kind of packaging machinery for the beverage industry.
A) Company Description: Big Cola is part of the beverage multinational Peruvian Company Ajegroup. The group entered the Mexican market approximately 5 years ago and has achieved significant market share in the cola market in Mexico. They have generated concern between the two major beverage companies in Mexico (Coca-cola and Pepsi-cola) because of their competitive prices and high quality products. The company has an accumulated capital of 80 million dollars in the three plants of Mexico, corporate offices and the 40 distribution centers. It is expected that the company will invest other 20 million in assets for the next year. Ajemex is planning to expand in Mexico by having 5 more distribution centers, increase their production lines and by the introduction of two new products in the market: Big Chela (Big Beer) and Free World, a bottled natural water product. They are also working to add a new flavor to their soda brand “First”. The beverage market sales in Mexico is estimated to be over 12 thousand million liters per year, of which Ajemex sold 1,100 million liters with Big Cola and First. This represents almost 10% of the volume sold in Mexico. B) Main Products Produced and how are they packed:
Product Brand Package
Big Cola Ajemex Plastic bottle First Ajemex Plastic bottle
C) Installed Packing Machinery:
Current Machinery Used Brand Units Origin Average Age Specification Complete Lines: wrapping, thermo forming machines, packaging machines, blowing machines, etc.
Krones 3 Germany 3 90%
Complete lines. Sidel 5 France 3 85% D) Last Packaging Machinery Purchase: In 2005 Big Cola Mexico did two important packaging machinery purchases. In order to expand productivity in Mexico they bought a complete line heir plants in Guadalajara and Monterrey. Big Cola did not reveal how much was their investments in these equipments, however they did mention that they have been in an expanding project inside Mexico. The following table shows these recent purchases:
for t
Machinery Brand Country Cost (Approximately) Complete lines from blowing Mezal Brazil N/A
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machines to packaging machines. Complete lines from blowing machines to packaging machines.
Sidel France N/A
The company prefers to purchase their machinery directly from a local representative of the manufacturer. Sidel and Krones have a representation in Mexico and Big Cola has worked satisfactorily with these local distributors. They have had a very good service in both technical and maintenance support. With Mezal they have contacted the manufacturer in Brazil directly. Big Cola’s machinery maintenance staff receives a personal training from the manufacturers. This has helped to diminish costs since Big Cola’s employees are capable of repairing and managing the production lines of the company. Whenever they have had major problems, their suppliers kindly assist the maintenance crew of Big Cola to solve the problem. The company told us that the best usage of equipments is when original spare parts are used for their repairment. Although it is more expensive, in the long-term their machinery will have a longer productive life. Big Cola has a specific way to choose their suppliers. Their purchase and decision making policies concerning packaging products are the following:
• Knowledge and experience of the supplier • Market share of the supplier • Previous testing of the equipments in order to evaluate their quality and efficiency.
They currently work with only three brands since they already know how they work and the quality of the product. Big Cola prefers to standardize their equipments in order to work more efficiently and faster in case a problem occurs with the machinery. E) Future Packing Machinery Ordering Plans. The company has an average worldwide budget of 30 million dollars for packaging machinery purchases in the near future. For the next 2 years they are having several purchases for the plants in Mexico. Since they entered the Mexican beverage market, the company has been working strategically to expand their presence in the country. Today, with three plants in the “industrial triangle” of Mexico (Guadalajara, Mexico City and Monterrey), the company has been able to penetrate successfully to this industry. In 2006 they will increment and expand these plants. The following chart shows their future ordering plans:
Machinery Units Origin Motive of Purchase Estimate BudgetComplete Lines (Blowing Machine, Filling Machines, capping machines, Labeling machines, conveyors, pallet and paletizers.)
6 to 8 units
worldwide. 3 units in Mexico
N/A Expansion 3 to 5 million dollars per line
F) Purchasing Policies and Financial Arrangements: Big Cola works with two types of financial policies. The first is done by a 50% advanced payment and a 50% after it is installed. The second is a 30-70% agreement. The company does not have any purchasing or financial agreement with their suppliers. They just follow one of these two financial policies. G) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has focused their investments on Sidel and Krones because they have had a very satisfactory outcome with these machines. The automation and technology managed by these
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companies are considered by Big Cola as unique and the best for the beverage industry. It has helped them to improve and have better production lines and processes. The company thinks that the European machinery products are better than those from the American for several reasons:
• The technology is considered to be more advanced • The European products have more innovation and state-of-the-art machinery. • They are easier to use. • Big Cola has experienced fewer technical and service problems with European
suppliers. • The post-sale service is much better
Origin Technology Flexibility Service Price United States Good Good Good Regular German Very Good Good Good Regular France Very Good Good Good Very Good Brazil Good Good Regular Regular H) Factors that Influence Purchasing Decisions In order of importance, the key purchasing decision factors considered by Big Cola at the time of purchasing new machinery include:
1 Knowledge of the brand 2 Brand’s market share. 3 Price 4 Technical Support 5 Acquirement costs of spare parts
I) Weaknesses and Strengths of the installed machinery. Brand: Krones Strengths:
• Efficient • Good reputation in the market • Good Technical Assistance
Weaknesses: • High technical support costs.
J) New Origin of Suppliers from Asia. The company has evaluated several Asian suppliers and considers that the technology has made significant progress in recent years and that the equipment is flexible and easy to operate. One of the company’s suppliers, Sidel, has been one of their suppliers that have begun to pursue opportunities in the Asian Market. They are currently manufacturing some of their products in that region. K) Trade Show Attendance / Trade Publication Information The company visits trade shows in Mexico and in several other countries. Expo Pack is the preferred expo for the company since they find different types of manufacturers and they learn about new technologies and trends of the packaging machinery industry. They usually explore the Internet or beverage magazines to obtain information on what is going on with the market. L) Specific Interest The company is interested in learning about packaging machinery suppliers manufacturing all kinds of products concerning the beverage industry.
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M) Contact Information Company Name: Big Cola Mexico S.A. de C.V. Contact: Ing. Julio Marroquin Position: Quality Control Manager Address: Parque Industriales San Miguel Manzana A lote 8 74160 Puebla, Puebla, Mexico Telephone: (52-227) 275-9000 ext.2224 Fax: ( 52-22 7) 275-9000 e-mail: [email protected], [email protected]
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Cadbury Schweppes, S.A. de C.V.
Industry: Beverages Sub Industry: Mineral water, carbonated
beverages, tomato and clam mixer, bottled natural water.
Location: Mexico City Size: (sales) Over US$ 145 million Purchasing potential: US$ 3 to 4 million Specific Business Opportunities:
Multi-packing (Cartooning), Integrated bottling line, camping and labeling processes, palletizers and depalletizers, bottle blowers and tray film machines
A) Company Description: Cadbury Aguas Minerales is the Mexican subsidiary of Cadbury Schweppes from the U.K. The local company was acquired in 1992 from a Mexican group that bottled mineral water under the brand name Peñafiel. Cadbury had plans to divest from the beverage segment, most assets world wide were sold to Coca Cola, but in the case of Mexico, the antitrust authority did not allow this company to be sold to Coca Cola. This company is one of the largest mineral water and carbonated beverage bottlers in Mexico, with three plants located in Tehuacán, Puebla; Tlajomulco de Zuñiga, Jalisco; and Tecate, Baja California. Cadbury closed a fourth plant in the State of Mexico in 1999. The company has continued to manage the company and will be moving forward with a series of investments. Over the past three years, the company has invested over US$ 40 million in plant modernization and for the purchase of process and packing machinery. B) Main Products Produced and how are they packed: Cadbury produces various brands in Mexico and packages its products in more than 120 different presentations. Including returnable and non-returnable glass, six sizes of PET bottles and aluminum cans. Cadbury also utilizes some other plastic and cardboard containers. Shipments are prepared in plastic boxes, film-covered cardboard trays and cardboard boxes.
Cadbury’s most important carbonated waters and other beverages are:
Peñafiel (Flavored and non-flavored carbonated waters), Crush (Orange flavored carbonated soft drink), Extra Poma (Apple flavored carbonated soft drink), Etiqueta Azul (Carbonated water), Canada Dry, Aguafiel (Mineral water), Squirt (grape fruit carbonated water), Clamato (tomato and clam juice) and Snapple (Teas and juice fruts)
In addition to the products manufactured by Cadbury in Mexico, the firm distributes Schweppes, Mott’s and Dr. Pepper.
C) Installed Packaging Machinery:
Current Machinery Used Brand Units Origin Average Age
Specification
Bottle blowers Sidel, Kurpp Simonazzi (Sidel)
15 France/ Germany
/ Italy
6 70%
Cappers Alcoa, F. Zalkin 6 U.S. 10 70% Case forming Pearson, Hartnes 9 U.S. 10 80%
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Coding, marking, stamping Domino 10 U.S. 5 90% De palletizers Acmi 6 Italy/
7 80%
Fillers Monasis, Meyer, Crown
12 U.S. 10 75%
Wrap labelers Polyclad 12 Canada 4 70% Labeling machines Alfa 4 France 4 80% Packing Hartness, Meyer 20 Germany
U.S. 7 65%
Palletizers and depalletizers Acmi 10 Italy 4 80% Tray and film (Multi packaging) N/A 10 France 3 80% Wrapping Lantech, Orion,
Acmi 11 U.S./
Italy 8 70%
Approximately 60% of Cadbury’s installed packaging machinery is from the Europe, 20 % Canadian and the remaining 20 % European. The equipment origin is different in other countries since in the U.K. most machinery is European. Hace aproximadamente 3 años, la empresa contaba con 70% de maquinaria de empaque instalada en sus 3 plantas, actualmente esto ha cambiado radicalmente, ya que la tendencia de la empresa es hacia equipo Europeo, ya que lo consideran de mejor calidad con un servicio superior al de USA. D) Last Purchases of Packaging Machinery. Cadbury’s last purchase was in February 2006 when they invested US$ 800,000 for bottling blowers for PET for their Jalisco facility.
Machinery Brand Country Bottle blower machine Sidel France
E) Future Packaging Machinery Ordering Plans. The company is defining the specific equipment purchases they will fund with an existing US$ 3 to 4 million dollar budget for packing equipment that will be spent over the following 24 months. The purchase will include filling lines, capping machines, labelers, palletizers and de-palletizers, bottle blowers and tray film machines among others. F) Purchasing Policies and Financial Arrangements. Cadbury develops yearly investment plans incorporating product demand and equipment requirements at their facilities. Purchasing decisions under US$ 500,000 are made locally, whereas larger purchases require authorization from London. When in the process of acquiring machinery, Cadbury requests proposals from at least 3 companies. For major investments they retain a consultant to conduct an open bidding process. Decisions are made locally but require approval from London. Most purchases are self-financed, paying 50% in advance and 50% against delivery. As for spare parts the company keeps an inventory and gets its local technicians to be trained by equipment suppliers to be able to provide – in-house- regular maintenance. As for major repairs, Cadbury uses the equipment manufacturer’s technicians, which they indicate to be very expensive. G) Factors That Influence Purchasing Decisions.
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• Previous experience and company -wide experience (Which equipment is giving best
results within facilities worldwide) • Customer support and technical service (cost and quality) • Speed, ease of operation, flexibility of equipment • Price of the equipment ( including transport and tariffs) • Quality and brand reputation • Credit terms and conditions.
H) Comments on Preferred Brands and Existing Business Arrangements With Packing
Equipment Suppliers: Cadbury at present has no specific agreements with any manufacturer or supplier of packaging machinery. In those cases when several companies of the group, require similar new machinery, the headquarters in London negotiates an agreement with a supplier. Cadbury mentioned, as some of their preferred suppliers, the following companies; for bottle blowers: Simonazzi (Italy) and Sidel (France), which they said to be solid companies’ with important presence in their sector. Cadbury’s evaluation of packaging machinery according by country of origin: Origin Technology Flexibility Service Price United States Good Regular Good Good Canada Very Good Good Good Good Germany Very Good Very Good Good Poor Italy Very Good Very Good Good Average France Very Good Good Very Good Poor I) Trade Show Attendance / Trade publication Information: Cadbury attends most packing related shows in Mexico and the U.S., and they receive information from London on European trade-shows. They don’t review specialized publications frequently. J) Specific Interests Cadbury is seeking for companies with experience in the interaction of PET bottling lines, which can also install, test and provide training to their technicians for providing in-house maintenance. Cadbury is interested in the following equipment:
• Multi-packing (Cartooning) • Integrated bottling line • Capping and labeling processes complete lines, • Palletizers and depalletizers • Bottle blowers and tray film machines
K) Contact Information: Company Name: Cadbury Schweppes, S.A. de C.V. Contact: Ing. Antonio Avalos Position: Technical Manager Address: Manuel Ávila Camacho No. 24 Torre del Bosque piso 10 Col. Lomas de Chapultepec 11000, México D.F. Telephone: (52) 5249-9143 Telephone: [email protected] Telephone: www.cadburymexico.com.mx
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Casa Cuervo, S.A. de C.V.
Industry: Beverage Sub Industry: Alcoholic Beverages. Location: Jalisco, Mexico Size: (sales) Over US$ 200 million Purchasing potential: US$ 2.5 million Specific Business Opportunities:
Bottle filling machine, de-palletize machine, form, fill and cartooning machine
A) Company Description Casa Cuervo is private Mexican company that initiated its business over 200 years ago with tequila production in the state of jalisco. At present the company has incorporated additional liquor production and also distributes international liquor brands in Mexico, The company has been very successful in the US market. Company’s current production includes a wide variety of tequila brands, brandy, rum, vodka, cocktails and other liquor products. The company has three production plants in the state of Jalisco with a production capacity of 5 million boxes per year. This is the most important tequila producer in Mexico and exports 60% of its production into 135 countries. B) Main Products Produced and how are they packed Casa Cuervo has more than 60 product presentations and 20 product brands. The company has three production facilities, each manufacturing different products. The company has a headquarter offices in Mexico City.
Product Brand Package Tequila José Cuervo, Tradicional,
Azul and Reserva de la Familia.
Glass bottles, plastic caps, labels and carton boxes
Rum Cuervo Glass bottles, plastic caps, labels and carton boxes Vodka Cuervo Glass bottles, plastic caps, labels and carton boxes Brandy Cuervo Glass bottles, plastic caps, labels and carton boxes Ready to drink Margaritas
José Cuervo Margaritas Glass bottles, plastic caps, labels and four pack carton boxes
C) Installed Packing Machinery Cuervo has 6 complete bottling lines with different packing machinery equipment in their three production plants. Over 65% of their current packing machinery infrastructure is from Europe and the rest is from US manufacturers. The company provided information on their most representative packaging machinery.
Current Machinery Used Brand Units Origin Average Age
Spec.
Bottling filling machine MBF 2 Italy 6 95% Bottling filling machine Irundin 2 Spain 6 95% Bottling filling machine ZEPF 1 USA 3 95% Bottling filling machine AVE 1 Italy 2 95% Labeling machine Auxiemba 3 Spain 6 95% Labeling machine Krones 2 Germany 6 95%
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Labeling machine AVE 1 Italy 2 95% Labeling machine SIG 1 Italy N/A N/A Box filling machine (bottles) Hartness. 3 USA N/A 95% Palletizing machine Samovi 2 Spain N/A 95% Codifier machine Video Jet 7 USA 4 90% Codifier machine Marken 2 USA 2 90% D) Last Packaging Machinery Purchase Casa Cuervo last packaging machinery purchase was a complete bottling filling machine MBF (Italy) and one labeling machine Auxiemba (Spain) both machines were acquired in 2005 with an investment of US$ 2 million. The bottling filling machine was acquired directly from the manufacturer and the labeling machine was acquired from a rep located in Mexico City. Casa Cuervo spends between US$ 1 million and US$ 2 million in packaging machinery per year.
Machinery Brand Country Bottling filling machine MBF Italy Labeling machine Auxiemba Spain
E) Future Packing Machinery Ordering Plans. The company has developed a US$ 2.5 million budget for the acquisition of packaging machinery during 2006. This budget will be spent mostly in one bottling filling machine, one de-palletizing machine, one box forming machine and one box filling machine (bottles),
Machinery Units Origin Motive of Purchase Estimate Budget
Bottling filling machine 1 Probably Italy
Expansion and replacement
TBD
De-palletizing machine 1 TBD Expansion and replacement
TBD
Box forming machine 1 Italy or US
Expansion and replacement
TBD
Box filling machine (bottles), 1 Italy or US
Expansion and replacement
TBD
F) Purchasing Policies and Financial Arrangements All purchases of packing equipment need to be supported and justified with technical and economical feasibility studies. Casa Cuervo makes the purchasing decisions at a corporate level in Mexico City with a previous presentation of the technical and financial teem justified the project. If purchasing new equipment, the company invites its existing suppliers and minimum 1 new supplier to present proposals for the equipment. New suppliers need to convince Casa Cuervo as to why they should be considered as a company and not only for their equipment. The company buys spare parts form the equipment manufacturers and keeps an inventory of the most commonly required parts. The company indicated that it has begun a standardization program to reduce the number of equipment brands it has at their facilities. The idea is to make it easier to provide maintenance to the equipment and to stock a smaller number of spare parts. The company indicated that they do not base equipment purchasing decisions on who is the leader in the segment, The company makes independent evaluations and invited the interested
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supplier to make a case on his behalf. The company compares potential suppliers with at least two alternatives before closing a purchase. The recent purchase from the Italian supplier MBF , is an example of how the company is open to working with lesser known companies. G) Factors that Influence Purchasing Decisions
6. Functionality 7. Price 8. Technical support 9. Spare parts local availability 10. Commercial considerations (flexibility for payment)
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers.
Casa Cuervo has a preference for some suppliers but is continuously looking for information on new equipment and suppliers for the beverage industry, specifically for bottle filling lines and equipment. The company indicated to consider that Italian and Spanish suppliers have the most advanced technology and equipment in this area. They consider US suppliers to have lagged very significantly in this industry. The company indicated to be very satisfied with the service they are receiving from European suppliers, which visit their facility at least two times per year. The company indicated that their current suppliers respond promptly to any equipment repair or emergency maintenance need, The company has the perception that Us suppliers have lost interest in the Mexican market as sales calls and contact are almost inexistent.
Cuervo’s evaluation of packaging machinery according by country of origin is the following: Origin Technology Flexibility Service Price United States Good Regular Regular Average Germany Very Good Regular Regular Poor Italy Very Good Good Good Good Spain Very Good Good Good Good I) Trade Show Attendance / Trade Publication Information Casa Cuervo visits yearly, the packaging trade show in Mexico ExpoPack. The company subscribes to specialized trade publications like beverage packaging world, among others. J) Specific Interest Casa Cuervo is interested in receiving information from manufacturers of Bottle filling machines, de-palletize machines, form, fill and cartooning machines, laser coding machines, and automation equipment. Interested companies must remember that Casa Cuervo requires potential suppliers to have extensive experience in this company’s sectors in order to be considered. K) Contact Information Company Name: Casa Cuervo, S.A. de C.V. Contact: Ing. Pedro Jimenez / Ing. Ramiro Garza Position: Planta Manager / Production Manager Address: Periférico Sur No. 8500 Col. El Mante 45601, Guadalajara Jalisco, Mexico Telephone: (5233) 3134-3300 e-mail: [email protected]
, [email protected] Web page: www.cuervo.com
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Grupo Modelo, S.A. de C.V
Industry: Beverages Sub Industry: Beer. Location: Mexico City (headquarters) Size: (sales) US$ 4 Billion Purchasing potential: US$ 4 million. Specific Business Opportunities:
Beer bottling equipment in General. Washing machines, pasteurizers, conveyors, paletizers, packaging and fridge pack equipments.
A) Company Description: Grupo Modelo was established in 1925 and is considered as the leading brewer in Mexico. Their brands have obtained worldwide recognition and their product Corona, has become the leading imported beer in the US market. The company through its various beer brands, has an estimated 70% market share in Mexico’s beer market. The company has 7 plants and more than 60 bottling lines. Their annual production capacity is around 6.0 billion liters of beer. Grupo Modelo produces 10 different beer brands. Their most important brands are Corona, Modelo, Victoria and Pacifico. The Corona brand is the single most important brand in Mexico accounting for 37 percent of the domestic beer market and is the #1 imported beer sold in the U.S. Today Grupo Modelo is a publicly traded company. The company exports five beer brands to around 150 countries and imports Anheuser-Busch’s Budweiser and Bud Light into the Mexican market. Managerial control of this company has remained in local hands in spite of the growing importance of the Anheuser-Bush Companies, Inc., who by late 1998 owned a 50.2% stake in the company. Anheuser-Bush has indicated no interest in managing the company, but controls 6 of the 11 seats at their board of directors. . B) Main Products Produced and How Are They Packed:
Product Brand Package Beer Corona, Corona light, Negra
Modelo, Modelo Especial, Modelo light, Victoria, Estrella, Pacifico, Leon, Montejo. Tropical
Glass bottles with 190, 325 and 940 ml capacity for the local market and glass bottles with 7, 12 y 24 oz. capacity for the export markets. 340 ml Aluminum cans 30 and 60 lt kegs 24 oz. aluminum cans
C) Installed Packaging Machinery: Grupo Modelo has a specific strategy for its packaging machinery. This strategy is based on the standardization of all the equipments. The company tries to have the least possible packaging machinery brands in order to decrease maintenance and spare part costs. By having fewer suppliers Grupo Modelo is able to resolve machinery problems faster. The company has over 60 bottling lines with one to four machines of each type per line. The following is the current packaging machinery of their 7 facilities:
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Current Machinery Used Brand Total units Origin
Depalletzing machines OCME 100 Italy Meyer USA Barry USA Hartness USA Bottle cleaning machines Simonazzi (Sidel) Italy Barry USA SEN-K45 12 Germany Filling and closing machine SIG- Simonazzi 1 –2 per line Italy Meyer Germany Cemco / Fran Corp N/A Hansa N/A Pasteurizer Simonazzi 68 Italy Barry USA SEN Italy Labeling machines Alfa-SIG 1 – 3 per line Italy Krones Germany JAGENBERG Germany Wiring machine Angelus 56 USA Keg filling machine Comak USA Case Packers Meyer USA Barry USA Hartness USA High speed palletizing units (120 boxes x minute)
OCME 1-3 per line Italy
SEN Italy Courrier Bottle inspection machines FILLTECH USA Omnivision USA Optiscan (Barry) USA Ejector machine Stratech 1-4 per line Germany Box coding machines Lumonic 3-4 per line USA Videojet USA Box forming cleaning dispensing machine
Dexter Mexico
Box forming machine / Cosedora x grapa
RA Parson USA
Tray forming machine SWF Machinery USA Tray forming machine / thermoshrink
OCME Italy
Wrapping machines Lantec USA Robopack Italy ITW 12 pack packaging machine Mead 4 France Fridge Pack Thiele 2 USA
Grupo Modelo indicated that they have been replacing some of the Meyer and Barry equipments with Simonazzi since they have a technical arrangement with the latter. In general they told us they haven’t had problems with their machinery.
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D) Last Packaging Machinery Purchase: Their most recent equipment purchase took place in 2004 and 2005, their investment was approximately US$ 30 million. The company bought several types of packaging machinery in order to expand production capacity.
Machinery Brand Country Units Packaging Machines Hartnes USA 25 Rajones USA 10 Case and tray thermo forming machine
OCME Italy 6 complete systems
E) Future Packaging Machinery Ordering Plans. Grupo Modelo is constantly evaluating the productivity at each line. Their future packaging machinery strategies are based on the company’s needs for expansion and increasing productivity. The company is permanently interest in learning about the latest technologies for its industry. The company incorporates a new machine as soon as it learns that it can improve the efficiency of their operation and be const effective. A short term priority will be the standardization program for their machinery at all their facilities. Their next purchase will be on the renewal of 5 lines which are presented in the following table:
Machinery Units Origin Motive of purchase
Cost ‘000 000
Washing machines TBD TBD Pasteurizers TBD TBD Conveyors and systems of transportation TBD TBD Packaging TBD TBD Paletizers TBD TBD Ren US$ 5 to 6ewal
per line. They told us that even though they are open to learn about new suppliers and brands, they will try to work with their current suppliers because of the standardization policies. F) Purchasing Policies and Financial Arrangements. Grupo Modelo has set several policies to acquire new machinery. Their first step is to evaluate the productivity at each line and depending on the results and cost / benefit analysis of new equipment alternatives they make decisions regarding the possibility to purchase new machinery. The company has a corporate engineering department that controls, checks, and evaluates their production facilities and the performance of their equipments. If a new machine is needed the company analyzes 2 or 3 packaging machinery manufacturers. After revising the quality, price, maintenance, and technical support, the engineering department director with its team creates a technical and economical evaluation of the 3 manufacturers. During this process they also evaluate the previous experience they have had with the supplier and in the case of new suppliers they look for the brand’s market share and recognition in the industry. After making a detailed comparison of the advantages and disadvantages of each supplier the department decides which new equipment is going to be bought. They told us that the maintenance cost is a major factor in the decision for replacing existing equipment. Even though the company requires their new suppliers to have a good technical support and maintenance services, they have their own maintenance team. When they have minor problems with the equipments, their team has the responsibility to resolve the conflict. The suppliers
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maintenance team is required if major problems emerge. As a policy, all the spare part products are bought directly from the manufacturers. However, they maintain an inventory of the most commonly used spare parts which they purchase form the equipment manufacturers. The company usually purchases the equipments through their own cash flow and in some cases it has rented machines with the option to purchase the machine at a later time. Grupo Modelo does not use any kind of credit. They usually pay on a 30-70% scheme. G) Factors That Influence Purchasing Decisions. 1. Equipment quality 2. Ease of operation 3. Low maintenance and operation costs 4. Spare part availability 5. Price H) Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers: As mentioned earlier, Grupo Modelo has a standardization policy for their packaging machinery. The following is a list of the companies preferred by Grupo Modelo:
• Currently the company has a joint-venture with Simonazzi. This company gives technical assistance to Grupo Modelo’s packaging machinery plant (Inamex) in order to help them manufacture some of the packaging equipments in Mexico and help the company to reduce import and freight costs. Today Inamex is manufacturing pasteurizers, washing machines, bottle transport machines with Simonazzi’s know-how manufacturing techniques. Also all the equipments for glass bottles are bought through Simonazzi.
• Some of the carton boxes are usually bought from OCME. As they indicate that this is
the only equipment that has worked for them as they re-use the carton boxes. The technology for these machines was specially developed for Modelo in 1995.
• Also for carton boxes they like to work with Hartness since they have also designed a
machinery to re-use the product several times. The company has no preference between European or U.S. packaging manufacturers. What matters for Grupo Modelo is if the supplier meets their requirements and if it would be compatible with their existent machinery in order to have a standardization of equipments. However, they mentioned the main differences between European and US equipments is that Europeans have more technological advances and better technical and post-sale services. In the last three years the Europeans, according to Grupo Modelo have advanced faster in packaging technologies. Origin Technology Flexibility Service Price United States Good Good Regular Regular Italy Very Good Very Good Good Good France Good Very Good Good Good
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I) Weaknesses and Strengths of the installed machinery. Brand: Hartness Strengths:
• Low operation costs • Low maintenance costs • Flexible • Robust
Weaknesses: • Slow availability for technical support
Brand: OCME Strengths:
• Excellent technology • Low operation costs • Good Service • Good Price • Flexible
Weaknesses: • N/A
J) New Origin of Suppliers from Asia. Grupo Modelo is very precocious on selecting their packaging machinery suppliers. Quality is the primal factor for the selection of packaging equipments. In the last years, Grupo Modelo has seen an increase of Asian packaging manufacturers, especially in trade shows and expos. However, the company told us that they do not want to take the risk by buying and investing on cheap and probably low quality products. According to what they have heard on the market, Asian packaging suppliers have yet not reached top technological and quality equipments. They know that Sidel, Krones and others have embarked some of their manufacturing plants to Asia, but all the products manufactured by these companies in Asia are exclusively for that market. K) Trade Show Attendance / Trade publication Information: For the selection of new equipment and potential suppliers, Grupo Modelo has several strategies but the two best ways to find this kind of information is by attending packing machinery trade shows and by receiving information by their current and potential suppliers. Grupo Modelo follows up with new technology developments in their industry by visiting trade shows in Germany, specifically Interbrau and Drintek. They indicate that as these shows take place every 4 years, they really see a technological evolution from one show to the next. They told us that the have also visited Expo pack and Pack expo in the last years. The company receives trade publications but they are more interested in the information sent to them by potential suppliers. L) Specific Interests Grupo Modelo is interested in receiving information on state-of-the art technologies for beer bottling as well as for Fridge Pack equipments. Also on washing machines, pasteurizers, conveyors, paletizers, packaging and fridge pack equipments. M) Contact Information: Company Name: Grupo Modelo, S.A. de C.V. Contact: Ing. Jesús Falcón Aguilar Position: Bottling Operations Director Address: Campos Eliseos #400, 14th floor Col. Lomas de Chapultepec
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11000, Mexico, D.F. Telephone: (5255) 52 81 01 14 Ext. 2113 Fax: (5255) 52 81 10 40 e-mail: [email protected] page: www.gmodelo.com
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Tequilera Corralejo, S.A. de C.V.
Industry: Beverages. Sub Industry: Alcoholic Beverages Location: Penjamo, Guanajuato Size: (employees) 150 Purchasing Potential:
Not defined
Specific Business Opportunities:
Bagging machines Polyethylene foam machines
A) Company Description Tequilera Corralejo is a 100% Mexican Company dedicated to the production of tequila. The company has been in the market for ten years and has been able to develop local and international market share for its products. The bottle has a particular blue color with an elongated design and according to the company, it is one of the highs quality tequilas in Mexico. The company’s sales growth over the past five years have averaged 20%. The company’s only production facility has a capacity of 5 million liters of tequila per year. The company has been able to export into 15 countries. B) Main Products Produced and how are they packed The company has 4 products. The list below shows these product brands and packaging:
Product Brand Package Tequila Corralejo Blanco Glass bottles, labels Tequila Corralejo Reposado Glass bottles, labels Tequila Corralejo Añejo Glass bottles, labels Tequila Corralejo Triple
Destilación Glass bottles, labels
C) Installed Packing Machinery Corralejo has three complete bottling lines from the same supplier. Equitopack is a Spanish packing machinery that has been able to adapt to Corralejo’s needs. Since the special bottle design, Equitopack’s machinery flexibility has been perfect for the company’s tequila production processes. They have been acquiring this brand for the last three years. Their last purchase was last year. The next table shows the bottling lines information:
Current Machinery Used Brand Units Origin Average Age Spec. Bottle Washing Machine, bottling filling machine, labeling machine, codifier machine (Complete bottling line)
Equitopack 3 Spain 1-3 95%
D) Last Packaging Machinery Purchase The company’s last packing machinery purchase was a complete bottling filling machine from the same brand Equitopack. This line was bought as the company continues growing at a very significant rate. They told us that they stayed with the same brand since the results have been excellent and that the Spanish company has been able to create the right machinery for Corralejo’s particular needs.
Machinery Brand Country Complete bottling line Equitopack Spain
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E) Future Packing Machinery Ordering Plans. The company is currently considering the development of new products which will create a need to purchase additional packing machinery. The company is considering entering into a growing and profitable niche which is a type of “coolers” which are canned mixed beverages. The company is interested in companies with experience in aluminum containers, as the product will have a bottle shape. The company considers that some of the equipment that will be required for the project includes the following:
Machinery Units Origin Motive of Purchase Estimate Budget
Can Production Machine 1 N/A Expansion, new products
N/A
Bottle Washing Machine 1 N/A Expansion and replacement
N/A
F) Purchasing Policies and Financial Arrangements Corralejo has a purchasing policy that is followed for every purchase. In order to choose a packing machinery supplier the company implements a selection process that consists of several technical, economical and cost-benefit studies. In order to approve a supplier, the plant manager studies each company and decides which one would be the most feasible for Corralejo. The company has no preference on a particular brand but prefers to work with suppliers that are flexible and are willing to manufacture equipments that will adapt to the company’s bottle design necessities. The company also requires suppliers to give a special training program to their engineers in order for them to be able to fix any kind of problem. Since Corralejo has a preference to purchase equipments directly from the manufacturing plant, they also require suppliers to send a technician on a regular basis to check the machinery. The financial arrangements are done when they sign the contract. Usually Corralejo prefers a 30% advance payment and when the equipment is installed give the 70% remaining. In the past they have worked on a 50-50% scheme because of negotiation reasons. G) Factors that Influence Purchasing Decisions
11. Functionality 12. Price 13. Technical support 14. Brand
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers.
Tequilera Corralejo has no brand preference and any kind of business arrangement with any packing manufacturing company. The company is continuously looking for manufacturers that will adapt to their necessities. Since their bottle design is unique, Corralejo is open to learn on companies that are able to manufacture custom made equipments. They have noticed that US equipments lack on flexibility. They researched and found that US equipments have a strong technology but haven’t been able to fulfill their necessities. On the other hand, European equipments have increased on technological advancements as well as on flexibility. They commented that Europeans are giving better services and adapting to companies necessities. For example, their current supplier has created an equipment that successfully satisfies their packing processes.
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Although the company has not experience completely with US equipments the evaluation of packing machinery according by country of origin is as follows: Origin Technology Flexibility Service Price United States Good Poor Regular Regular Germany Very Good Good Good Regular Spain Good Very Good Good Good I) Trade Show Attendance / Trade Publication Information Tequilera Corralejo rarely visits trade shows and expos. They have only attended the ExpoPack in Mexico but they do not go in a regular basis. The company is subscribed in specialized manufacturing magazines and receives information on new technologies from Krones. J) Specific Interest Corralejo would like to receive information from manufacturers of can production machinery and bottle washing machines. K) Contact Information Company Name: Tequilera Corralejo, S.A. de C.V. Contact: Ing. Miguel Roa Position: Plant Manager Address: Ex Hacienda Corralero s/n 36921 Penjamo, Mexico Telephone: (52-469) 696-4104 e-mail: [email protected] page: www.tequilacorralejo.com.mx
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8. The Pharmaceutical Industry:
8.1. Industry Overview. The Mexican pharmaceutical and drug product market reached approximately US$ 9.1 billion in 2005, of which US$2.7 billion are imports and the rest is produced locally. Imports have grown at an important pace averaging 23% per year over the past three years while the total drugs market has grown 9% from 2001-2005. The market is composed of patent drugs, representing 20% of volume and 77% of value and generics, which continue growing in importance in the market. The key driver for this growth is purchases to supply government run health services, which are interested in minimizing drugs prices. Private sector purchases are concentrated in patent drugs. The market for generic drugs is estimated at nearly US$ 2.3 billon of which over $800 million are imported and the rest produced locally by 425 pharmaceutical companies. There is growing imports of generic products including the strong market share development of the Canadian company Apotex which signed a joint venture with Farmacias Benavides. International pharmaceutical companies manufacturing in Mexico supply 45% of the generic market and control production of patent drugs. Public and private health systems have completely independent operations in Mexico and the population seeks public services out of necessity and not of choice. The government provides health services for most employees through the national social security institute (IMSS) funded a mandatory payroll tax to all employers and fees to employees. Government workers receive similar services through a parallel system called ISSSTE and the rest of the population, with no private or public coverage can receive medical services through the ministry of health (Secretaria de Salud). Private health providers offer world-class services while government services are deficient; shortages of supplies are common and estimated at 30%. These difficulties are even more evident in rural areas where only the most basic care is offered. The government estimated that health services coverage reached 90% of the population and that quality of services measures 70 in a scale of 100. Some of the segments in the Mexican pharmaceutical market that have experienced the highest growth during the past five years are; vitamins, herbal products and nutritional supplements, which are expected to continue growing at average rates of 15% per year. Competition in these segments is intense and new investment is expected for the construction of additional manufacturing facilities in Mexico to satisfy both growing local demand and for exporting to other Latin American countries.
8.2. Company Ranking by Size. Through reviewing local regulations it will be clear why the leading drug manufacturers are mostly international pharmaceutical companies manufacturing in Mexico, including Abbot, Syntex, Roche, Aventis Pharma, Glaxo Wellcome, Novartis, Wyeth, Pfizer, Bohereinger Ingelheim, Bayer, Janssen, AstraZeneca, Pharmacia Upjohn, Merk Sharp and Dohme, Eli Lilly, SB Pharma, BYK Gulden, Sanofi Synthelab, Bristol, Murk among others. There are also local pharmaceutical companies active in the market of manufacturing drugs, but it is uncommon for a company without local manufacturing facilities to be directly involved in this business segment
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8.3. Key Players. Mexico’s largest pharmaceutical companies include:
Top Pharmaceutical Companies in Mexico
Company Sales 2004 Million US$
Pfizer 702.60 Merck Sharp & Dohme de México 662.00 Grupo Novartis de México 558.00 Glaxo SmithKline México 492.00 Bristol Myers Squibb de México 425.00 Boehringer Ingelheim Promeco 368.00 Eli Lilly de México 238.00 Ciba Especialidades Químicas México 177.00 Merck México 168.00 Organon Mexicana 62.50
Source: Expansión Magazine, Top 500 Mexican companies.
8.4. New Packaging Trends. The industry is facing a significant challenge consisting in the falsification of products which are sold through street vendors or in flea market type environments. Some pharmaceutical companies, including Astra Zeneca, have begun to close their product boxes with hologram stickers and most companies in the sector will follow this trend. The introduction of child protecting blister applications as well as increasingly sophisticated capping solutions for child protection. The industry indicates to be constantly receiving suppliers offering RFID solutions, but that there are no short term plans to incorporate this technology for replacing bar codes.
8.5. Company Profiles.
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Bayer , S.A. de C.V.
Industry: Pharmaceutical Sub Industry: Pharmaceutical and medical
products. Location: Mexico City Size: (sales) $700 million USD Purchasing Potential: 1.5 million Euro Specific Business Opportunities:
Any packaging machinery for the pharmaceutical industry.
A) Company Description Bayer begun operations in Mexico in 1929 and currently operates three manufacturing facilities, located in Mexico City, Lerma and Santa Clara. The company employs over 2,400 people and generates sales of US$ 700,000. Some of the leading company brands include Aspirina, Alka-Seltzer and Tabcin. B) Main Products Produced and How Are They Packed
Product Brand Package Alka-Seltzer Bayer Sealed plastic bag Aspirina Bayer Blister PVC aluminum Aspirina Efervecente
Bayer Sealed plastic bag
Antibiotic Bayer Blister Creams Bayer Tube
C) Installed Packaging Machinery The company has a very large base of packing machinery at its manufacturing plants. The following table presents some of the most representative machines in its operations:
Machinery Type Units Origin Average Age
Specification
Sealing Machines/ Sibler 5 Germany One has 1 year and
the rest 15 years.
100%
Blister machines/ Bosch 1 Germany 15 95% Blister Machines/ Ulhman 4 Germany 2 100% Blister Machines/ Cam 1 Italy 15 95% Cartoning Machines/ IWKA 3 Germany 3 100% Carton Machines/ Bosch 1 Germany 15 100% Carton Machines/ Cam 1 Italy 20 95% Pallet machines/ Pester 3 Germany 2 100% Pallet machines/ Mab 1 Italy 15 95% The company indicated that all their machinery is specially designed for the specific operations of Bayer.
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D) Last Packaging Machinery Purchase Over the past three years, Bayer has invested over 4 million Euros in packing machinery for its plants in Mexico. Bayer’s last purchase was in 2005 when they purchased polyurethane wrapping machine. Following we present a table with the most recently purchased machinery:
Machinery Brand Country Cost (Approximately) 3 Packaging machinery lines N/A N/A N/A 1 Pallet Machine Pester Germany N/A
E) Future Packaging Machinery Ordering Plans. The company purchases from suppliers that are able to meet with very strict guidelines and that in most cases are specialized on the pharmaceutical industry. The company indicated to purchase the finest equipment available for each of their applications. The company is currently in the process of purchasing two complete packing lines from the German supplier Ulhman and another from Italian supplier Marquesina. The combined investment for both lines is estimated at 3.5 million euros. This purchases will be to replace existing lines which are becoming obsolete. In addition to these purchases, they expect to buy an additional packing line in the 2007-2008 period.
Machinery Units Origin Motive of purchase
Complete packaging line 1 TBD Replacement F) Purchasing Policies and Financial Arrangements The company indicated to follow very strict guidelines for equipment and supplier selection. The procedures are followed every time that the operation managers decide there is need for additional equipment. The company performs a technical feasibility and economic analysis and develops a budget for the purchase of the machinery. The maintenance department produces a series of documents describing the technical specifications of the required equipment and provides the information to interested suppliers. The company commonly receives three or four equipment proposals. The proposals are analyzed and a purchasing decision reached. All the machinery used by Bayer is custom made to meet very specific technical characteristics, produces specifically for their. Common purchasing terms used by Bayer are the following:
• Up 40% advance payment • Additional 30% payment after passing the --- testing • 20% payment at the delivery of the machinery • The remainder is paid after approval by the maintenance department which is
responsible for performing operational testing of the equipment. G) Factors that Influence Purchasing Decisions Some elements that come into play during the evaluation for the selection of a supplier or its equipment include the following:
1. Machine capabilities 2. Technology 3. Service 4. Price 5. Spare parts and training
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H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. As a result of the strict guidelines followed by Bayer and the need to have suppliers produce equipment to specifications, the company has a preference for a few suppliers. They indicated that in this group of preferred companies we could find companies like Sibler for folded paper packing, Ulhman for Blisters and Pester for polyurethane wrapping machines. Bayer indicated to have had excellent results with the use of machinery from these suppliers. The equipment from these companies can handle large volumes at very high speeds and they are receiving excellent service in Mexico. The pharmaceutical industry considers these companies as the best packing machinery suppliers for their industry. In any case, Bayer indicated to be open to receive information from other suppliers and that even while they have excellent experience with existing suppliers they are always available to initiating a dialogue as the possibility always exists to find better alternatives, Bayer considers that European countries specially Germany and Italy are the strongest in packing machinery, because of their technology as well as the quality of the equipment construction. They also indicate that suppliers from these countries are more interested in assuring client satisfaction and developing a long term business relationship. The company indicated to have had little contact with US suppliers, to consider their technologies as very advanced but that they do not consider their machinery as robust as the European. The company evaluates equipment by country of origin as follows: Origin Technology Service Price Germany Very Good Very Good Good Italy Very Good Good Good ** Bayer made no comments on equipment flexibility as all the equipment they use is designed and constructed for specific processes. I) Weaknesses and Strengths of the installed machinery. Brand: Ulhman Strengths:
• Robust • State of the art technology • High volume capacity
Weaknesses: N/A
J) New Origin of Suppliers from Asia.
Bayer has not been approached by Asian packing machinery suppliers and has no interest in searching for new potential suppliers which base their competitive strategies on price and not on superior technology, machinery quality or specific experience and products developed for the pharmaceutical industry.
K) Trade Show Attendance / Trade Publication Information The company attends several trade shows including Expo Pack, Expo Farma and the international trade show in Pharma and packing in Germany. The company also reviews trade publications to remain updated on trends and technologies to the pharmaceutical industry. L) Specific Interest The company is only interested in suppliers that consider to have state of the art technologies and that are specialized on the pharmaceutical industry.
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M) Contact Information Company Name: Bayer de Mexico S.A. de C.V. Contact: Mr. Alfredo Velez Position: Maintenance Director Address: Carretera Mexico-Toluca. Km 52.5 Lerma, Estado de Mexico, Mexico Telephone: (52-55) 5728-3000 ext. 4985 Fax: (52-55) 5728-3000 Mail: [email protected] page: www.bayer.com.mx
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Boehringer Ingelheim Promeco, S.A. de C.V.
Industry: Pharmaceutical Sub Industry: Pharmaceutical products,
patent drugs and related products..
Location: Mexico City Size: (sales) US$ 370 million Purchasing potential: TBD Specific Business Opportunities:
Hologram stickers and end of line coders.
A) Company Description: Boehringer Ingelheim is the fourth largest pharmaceutical company in the world. Its operations in Mexico result from the combination of two companies, Boehringer Ingelheim and Promeco. The company operates a plant in Mexico City and a veterinary products plant in Guadalajara. Total sales in Mexico for both divisions reached approximately US$ 370 million during the year 2005, making it the fifth largest pharmaceutical company in the Mexican market. Close to 10% of the local production is exported into the Us and Canadian markets. The plant in Mexico City was inaugurated in 1998, called the Promeco complex and is located in the Xochimilco area. The complex is comprised by a production plant for oral solids, a plant for the production of liquids, a quality control lab and a state-or- the art warehousing facility. The operations of the Promeco facilities have been certified by the Mexican ministry of health, the US FDA and the Canadian TPP. The investments for the Promeco plant were part of Boeringer Ingelheim’s OPINA (Optimization of the Pharmaceutical Industry in North America) project. Some of the products that are manufactured and / or packed at these facilities are sold in the Mexican market under the following names: Bipasmín®, Buscapina®, Gotinal®, Isodine®, Lonol®, Lonol Sport®, Mobicox®, Bisolvon®, Bisolpent®, Bremagan®, Viramune®, Pharmaton®, Prodolina®, Mucosolvan®, Venastat® and Mensifem® . B) Main Products Produced and How Are They Packed:
Product Brand Package Ointment / Gel Lonol Flexile tube Hypodermic injection products
Various brands Glass Ampoules
Cough and other syrups
Bisolvon, Bisolpent, Mucosolvan, among others
Glass bottles
Iodine based products
Isodine douche, foam, solution, gargle
Plastic bottle
After the product is in its container it is packed in cartoon box.
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C) Installed Packaging Machinery: The following list presents the packing machinery installed at the liquids production plant:
Current Machinery Used Brand Units Origin Average Age
Weighers Metler-Toledo 8 Switzerland 8 Printing machine Jaime 1 France 8 Dynamic scale BOSCH 1 Germany 3 Viscous filling machine COMADIS 1 Italy 10 Cartooning IMA-150 1 Italy 8 Scale BOSCH 4 Germany 2 Tape dispensing machine Multipack 1 Italy 9 Coding machine Leatus 6 Germany 6 Cartooning M-80 Marchessini 1 Italy 14 Tape dispenser machine Multipack 1 Italy 14 Shrink and retractile oven AXON 1 USA 7 Orienting flask machine OZAF 1 Italy N/A Unwrapping machine Multipack 1 Italy 6 Bottle blower machine Neri 1 Italy 6 Filling liquid 200 bottles x min Farmomac 1 Italy 6 Cartooning MA-400 Marchessini 1 Italy 9 Box form machine BFB 1 Italy 5 Bottle washer machine Libra 1 Italy 11 Filling machine 100 bottles x min IMA Farmomac 2 Italy 8 Box form machines BFB 1 Italy 2 Multi-packaging (flasks, spray, instructive)
Marchessini 1 Italy 3
Scale BOSCH 1 Italy 3 Tape dispensing machine Miltipack 1 Italy 3 Coding machine Leatus 1 Italy 3 Horizontal filling machine for semi viscous
Farmomac 1 Italy 2
Blister machine IMA C-80 1 Italy 1 The company stopped the production of injectable products in Mexico. The machinery they had in Mexico was sent to Spain where they are concentrating the world-wide production of injectable products. D) Last Packaging Machinery Purchase: The company’s last purchase took place in 2005 when they acquired a blister machine for tablets to replace an old machine. The machine was acquired directly from the manufacturer IMA based in Italy. E) Future Packaging Machinery Ordering Plans. Boehringer Ingelheim Promeco does not develop specific budgets for the purchase of new packing machinery. Equipment purchasing plans are the result of specific manufacturing projects. The company is analyzing changing some product presentations and to do this they would require to purchase a blistering line and a new packaging line for tablets in flasks. The company mentioned that they could also replace some old machinery during the course of 2007 but these projects are undergoing the approval process.
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F) Purchasing Policies and Financial Arrangements. At the IB Promeco plant they make economic cost-benefit analysis for all their lines every year. If they propose any new equipment is must have a payback of three years, this is a prerequisite for the purchase to be approved. If a purchase is approved, the company selects the equipment between at least three options. A final decision is reached jointly between the managerial committee in Mexico and the corporate headquarters is Germany. G) Factors That Influence Purchasing Decisions.
• The new equipment is compatible with their existing machinery, and helps develop a trend for equipment standardization.
• Service • The equipment’s flexibility and reliability • Price
H) Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers: The company mentioned that the best machinery for their industry is made in Germany, but that these machines are very expensive. They also mentioned to like Italian equipment as it is flexible, easy to operate and they have received very good technical support. The company indicated they are inclined to purchasing machinery that is similar to the one they are already using, as their personnel are already familiar with this equipment and suppliers. This is important to them because in the liquids area they manufacture a wide range of products but they cannot justify a dedicated line for each product. As products share the same production line, there is need for cleaning the machinery and related equipment at least twice a week. It is because of this constant configuration and cleaning, that the company has a preference for equipment with which they are familiar, something they expect can reduce down-time. They also mentioned that establishing a business relationship with a particular supplier also generates several advantages. They can negotiate better pricing, get spare part kits at reduced prices to other benefits. As for maintenance, they indicate that this is performed by their own staff. Most of the spare parts are purchased form the local representatives of their equipment suppliers or directly from the manufacturers. The plant also has a shop where they manufacture those spare parts that are most commonly replaced. The company has a series of corporate agreements with several packing machinery suppliers including IMA, Multipack and Marchessini, all from Italy. When the company has a need for new equipment, they first check that such machine is not available at some of their facilities world-wide. If the machine is not available they proceed with the purchase of new equipment. The following step is to contact the suppliers with which they have pre-existing business relationships and corporate agreements. If these suppliers are not adequate for the requirement, the corporate office in Germany suggests alternative suppliers. If the suggestions fail to yield viable options, the operation in Mexico initiates the search for potential suppliers. Boehringer Ingelheim Promeco’s evaluation of packing machinery according to its country of origin: Origin Technology Flexibility Service Price United States Good Low Average Good Germany Very Good Good Good High Italy Very Good Good Good Average France Good Good Good Average
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I) Trade Show Attendance / Trade publication Information: The representatives from this company visit only one trade show in Mexico which is ExpoFarma, which is focused on the pharmaceutical industry. They do not visit other shows as they indicate that their equipment purchases are sporadic. J) Specific Interests The company is interested in receiving information on packing security features which help identify the product as original and not a copycat produced for sale in the black market. The company is interested in learning if laser imprinted holograms might be an option for satisfying this need. The company’s interest is to help the consumer be completely sure that he is receiving an original product. The company at this point has no information on potential suppliers. This procedure to use holograms in product boxes, is something already being done by Astra Zeneca in Mexico. K) Contact Information: Company Name: Boehringer Ingelheim Promeco Contact: Q.F.B. Laura G. Acosta Rodriguez Position: Manager of liquids production Address: Maíz # 49 Xochimilco 16090, Mexico D.F. Telephone: (5255) 56 29 83 00 Ext. 8114 Fax: (5255) 54 20 85 82 e-mail: [email protected] page: www.promeco.com
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Eli Lilly de México, S.A. de C.V.
Industry: Pharmaceutical Sub Industry: Trade mark drugs, prescription, over the
counter products, and other medical specialty products
Location: Mexico City Size: (sales) US $ 300 million Purchasing Potential: US $ 2.5 to 3 million for 2006 Specific Business Opportunities:
Complete blister line.
A) Company Description Eli Lilly in one of the leading multinational pharmaceutical companies and has been active in Mexico for over 60 years. The company is currently producing 40 products in close to 70 different presentations. in 1876 in Indianapolis, Indiana, in the Midwestern section of the United States. Eli Lilly in Mexico is one of the top 5 pharmaceutical groups in Mexico controlling around 12% of the Mexican pharmaceutical market. The manufacturing facility located in Mexico City exports their products to 20 countries and this represent 17% of their production of more that 4 million items per year. B) Main Products Produced and how are they packed Eli Lilly produces a wide variety of drugs, most of which are packed in blister or glass bottles. The most representative products are:
Media Brand Package Capsules Prozac Blister Tablets and Liquid Keflex Bottle and Blister Tablets Evista Blister Tablets Zyprexa Blister Injections Humulin Vial Capsules Strattera Blister Tablets Symbyax Blister Capsules, tablets and liquid Ilosone Bottle and Blister
C) Installed Packing Machinery 95% of Eli Lilly’s packaging machinery is Italian or German. The company considers Italian pharmaceutical machinery to be the most technologically advanced and quite flexible for adapting to various packing applications. Some of its most important packaging machinery includes:
Current Machinery Used Units Origin Average Age
Specification
Carton Filling Machine/ BOSCH 1 Germany 3 90% Ampoule Filling Machine/ Cozzolli 1 Italy 23 99% Capping Machine / BOSCH 1 Germany 1 99% Labeling Machines / Newman 4 USA 13 90% Cartooning / CAM 2 Italy 11 95% Laser labeling machine (Holograms)/ Neri 7 Italy 5 50% Blister Machines/ Uhlman 3 Germany 11 80% PVC Wrapping Machines/ Package 1 USA 23 99%
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Wrapping Machine/ CAM 6 Italy 11 99% Tablet Filling Machine/ Cremer 1 Germany 5 98% Container Orienting Machine/ Palace 3 USA 5 98% Printing, Imprinting Machines/ Hapamatic 3 Italy 11 80% Cartooning machines/ Uhlman 3 Germany 11 80% Tablet and Capsule Machinery 11 Italy 13 80% Tray machines 20 Mexico 13 70% D) Last Packaging Machinery Purchase Lilly’s last packaging machinery purchase took place in 2005 when the company acquired capping machines, an inserter machine and de-blistering machine.
Machinery Brand Country Cost (Approximately) Capping Machine BOSCH Germany US$ 500,000 Instructive inserter machine
GUK Germany €$ 100,000
De-blistering machine SEPHA Germany €$ 50,000 E) Future Packing Machinery Ordering Plans. Lilly is planning the purchase of a complete blister packaging line. It will be made up of 5 machines that include: palletizer, grapping, hologram label, cartooning, and blister. This machine could also include a separate tablet counting and dispensing unit. The primary suppier being considered is the German-based manufacturer IMA but the final selection will be made in late 2006.
Machinery Units Origin Motive of Purchase Estimate BudgetComplete blister Line 1 Europe or
USA Tablet line expansion US$ 2.5 million
UV flexographic print / Romaco
1 Switzerland Improve quality TBD
On line weight verifier 1 Metler Toledo
USA TBD
Color vision inspection machine
1 Systech USA TBD
F) Purchasing Policies and Financial Arrangements Eli Lilly Mexico defines its own packaging machinery needs and usually buys directly from the equipment manufacturer. The purchasing decision process includes the evaluation of at least three equipment alternatives. Serious consideration is placed on the vendors’ capacity to provide good service, and they require that the supplier has other machinery functioning in Mexico. They consider this eases the process to receive service and spare parts. Eli Lilly notifies its purchasing plans to the Headquarters located in the US but usually the selection process and the purchase is made with local resources. For machinery purchases of over US$ 50,000, the company has to receive an authorization from their corporate office in the US. G) Factors that Influence Purchasing Decisions 1.- Regulation compliance 2.- Performance 3.- Service and spare parts available in Mexico 4.- Price (which can be negotiable)
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H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. Lilly’s main concern with its European suppliers is that distance is a factor that makes service and speed of service a problem. This also has a negative impact on general equipment maintenance in Mexico as the delivery times for spare parts are quite long. They usually like manufacturers to have some kind of representative in Mexico that will stock the most common spare parts and be competent in providing training to their technical staff. The company also complained about the high cost of service of representatives of European machinery in Mexico. The company does not have a specific preference for any brand and did not give an individual brand example at the meeting. Nevertheless, they consider that the strengths of all their machinery are that they all share similar technologies thus can be switched around the process lines so as to save money on purchasing more machinery. The flexibility of their group of machines is held highly in the company. The main weakness of all their machines is that most of the service has to be done through the representative in Mexico, which in some cases don’t have spare parts inventories and have very slow response. Origin Technology Flexibility Service Price United States Good Good Very Good Good Germany Very Good Good Good Bad Italy Average Very Good Good Average Switzerland Good Good Good Average U.K. Good Good Good Average The company considers that US machinery is not a good choice for the pharmaceutical industry, as their equipment is viewed as fragile and in constant need to replace spare parts. On the other side, they estimate that European equipment is more robust and longer lasting but the operational and maintenance costs are very high and spare parts are not readily available in Mexico. They indicated that sometimes they have to use US or Mexican spare parts while they receive the original from the European equipment manufacturer. I) Trade Show Attendance / Trade Publication Information Eli Lilly has an internal global network database in which they can get information on new technologies, as well as access reviews from around the world for different manufacturers. This is a reliable way to be sure of the quality of machinery and service that each provide. For this reason, the attendance to international trade shows is very limited. The attendance to ExpoPack and Expofarma in Mexico, on the other hand, is a must for them. J) Specific Interest The company is interested in learning about complete blister lines that members of PMMI could offer. K) Contact Information Company Name: Eli Lilly de México, S.A. de C.V. Contact: Ing. Marcela Carreras Position: Conditioning Manager Address: Calz. De Tlalpan 2024 04200, Mexico City Telephone: (5255) 5484 3813 Fax: (5255) 5484 3866 e-mail: [email protected] Web page: www.lilly.com.mx
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Laboratorios Sanfer, S.A. de C.V.
Industry: Pharmaceutical Sub Industry: Trade mark Oncology drugs,
OTC consuming, Pharmaceutical, natural, vet and other medical specialty products.
Location: Mexico City Size: (sales) $150 million USD Purchasing Potential: $1 million USD Specific Business Opportunities:
All kinds of pharmaceutical packaging machinery.
A) Company Description Laboratorios Sanfer is a pharmaceutical company with approximately 300 products sold into the human and veterinarian markets in Mexico. The company manufactures its own products and also produces private label formulations for multinational pharmaceutical companies such Smith Kline Beecham, Astra Medica, Servier, Sanofi, Cooper Biomedical, Blistex, Daiichi Pharmaceuticals and Kiowa Hakko. About 80% percent of the company’s production is sold in Mexico and the rest is exported to diverse markets including Dominican Republic, Guatemala, Honduras, Peru and Panama. The company has three manufacturing plants in Mexico, two in the Lerma area in the state of Mexico and one in the Vallejo area of Mexico City. The facilities produce patent drugs, ointments, creams, health supplements, injectable formulations and vitamins among many other products. B) Main Products Produced and How Are They Packed
Product Package Treda Blister Laflon Blister Pedagox Blister Pramusine Blister Analton Tube Sinalgia Tube
The company uses blister packs for all their tablets, capsules and coated pills; they use tubes for the cream products and box packages for their glass ampoules for liquids and powder products. C) Installed Packaging Machinery The company has a large variety of machinery installed in their plants in Mexico. Usually the company prefers to buy European products than American equipments due to quality reasons. Sanfer´s installed packaging machinery is as follows:
Machinery Type Units Origin Average Age
Specification
Form, fill and seal machines/ IMA 3 Italy 12 85% Cartoning and Blister machine/ IMA 6 Italy 10 75% Vertical cartooning machine/ IDK 2 Germany 25 85% Labeling machine/ NERI 6 Italy 5 65% Hooding machines/ Rotobrap 1 Mexico 29 25%
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Weighing systems/ Mettler House 30 USA 9 - Cap closing machines/ Ulhman and Mar
2 Germany and Italy 19 70%
Coding and marking machines/Happa
5 Switzerland 29 80%
Labeling Machines/ Jowe 4 Germany 27 85% Sterilization machines/Amsco 4 US 24 40% Volumetric filling machines/Mar 2 Italy 22 60% Sachet form and fill machine/Volpack
2 Spain 10 85%
Viscous filling machine/ N.A. 1 N/A 10 80% Tablet Counting Machine/ King 1 U.K. 9 75% Tube filling Machine/ Unipack 1 Italy 10 80% Cartoning Machine/ MARQUESINI 1 Italy 5 90% Capsule Filling machine/BOSCH 1 Germany 5 70% Filling machine/ PERRI 1 USA 4 85%
D) Last Packaging Machinery Purchase Sanfer’s last packaging machinery purchase took place in 2005 where they bought one blister machine from IMA for $250,000 USD. This equipment was bought with the purpose of having a more advanced blister machine. The company also invested in 2004 around 1 million USD in order to expand its existing machinery. The company is constantly investing and researching on best quality pharmaceutical packaging equipments.
Machinery Brand Country Cost (Approximately) Blister machine IMA Italy $250,000 USD
E) Future Packaging Machinery Ordering Plans. Sanfer follows specific procedures for a selection process of equipment and suppliers. The company will invest over US$ 1 million during 2006 for the purchase of new packing machinery. Some of the purchases will include the following:
Machinery Units Origin Motive of purchase
Labeling machine 1 Germany Replacement Blister machine 1 Germany Replacement
F) Purchasing Policies and Financial Arrangements The department of operations management is responsible for defining equipment needs and the selection of potential suppliers. The selection process follows a series of steps which initiate with the definition of the reason for the purpose, be it either the replacement of an obsolete machine or the need to expand capacity of improve the productivity of a particular process or line. The people from Sanfer like to visit facilities where the proposed machine is in operation. Once the operations management office makes a decision regarding a supplier and a specific machine, they request final authorization from the top management of the company which needs to be presented with a financial cost-benefit analysis of the purchase. Sanfer has an internal maintenance department which is trained by the equipment suppliers to be able to service the machinery.
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Payment policies include an initial payment once the company signs a purchase order for the supplier, the payments continue upon delivery, installation and the final payment once the equipment is in operation. G) Factors that Influence Purchasing Decisions
1. Technology 2. Operational characteristics 3. Flexibility to adapt to existing lines 4. Secure machines 5. Service 6. Price
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. Sanfer indicated to have a clear preference for European packing machinery suppliers. The company considers that its existing Italian and German suppliers are the packing machinery leaders for the pharmaceutical industry. undoable prefers to buy their packaging machinery from European suppliers. They mentioned that in general European machines are efficient, durable, and flexible for adapting to their existing lines, that they are easily operated and maintained. As for US equipment, they indicated that most machinery is technologically obsolete and originally conceived for the food industry, making it not a good option for their specific needs. Although they do not have a preferred brand, they told us that their first purchasing evaluations are done with Italian and German suppliers such as IMA, Bosch and IDK. Sanfer indicated that their most important need besides equipment efficiency and reliability is flexibility, as the broad product lines require the constant adaptation of the equipment to various types of products and presentations. Sanfer’s evaluation of packaging machinery by country of origin: Origin Technology Flexibility Service Price United States Good Average Average Good Germany Very Good Good Average Average Italy Very Good Very Good Good Good Spain Average Average Bad Good France Very Good Average Average Average
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I) Weaknesses and Strengths of the installed machinery. Brand: IMA Strengths:
• Excellent technology • Robust • Trust worthy
Weaknesses: • Price of both the equipment and spare part has increased to much
Brand: Marchessini Strengths:
• Excellent technology • State-of-the-art innovations. • Service • Good Price • Trust worthy
Weaknesses: • Poor spare part availability.
J) New Origin of Suppliers from Asia. The company has been contacted by several Asian manufacturers over the past few years. Sanfer considers that these suppliers compete on price and not technology, which is the key purchasing decision for the company. The company indicated to have been offered very attractive pricing but that the proposed equipment had obsolete technology. At the moment they indicated no interest in trying to locate potential equipment suppliers in Asia. They indicated that none of their existing suppliers has shifted production into China as a price reducing strategy. K) Trade Show Attendance / Trade Publication Information The company visits trade shows to be updated on packing machinery trends in their industry as well as review the information they receive from their existing and interested suppliers. The company visits ExpoFarma and Expo -Pack in Mexico, InterHex in the US and Achema in Germany. This last takes place every two years and is regarded as the most important Pharmaceutical show in Europe. L) Specific Interest Sanfer would like to receive information from packaging machinery manufacturers that have capabilities to compete against European suppliers. They are interested in receiving g general information packaging machinery specialized on the pharmaceutical industry. M) Contact Information Company Name: Laboratorios Sanfer, S.A. de C.V. Contact: Ing. Agustín L. F. Madrigal Position: Operations Director Address: Calz. De Tlalpan #550 Col. Moderna 03510, México D.F. Telephone: (52) 5590-0266 Fax: (52) 5579-9784 E-mail: [email protected]: www.sanfer.com
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Merck, Sharp and Dohme de México, S.A. de C.V. (MSD)
Industry: Pharmaceutical Sub Industry: General pharmaceutical
products and vaccines Location: Mexico City Size: (sales) US$ 662.00 Purchasing Potential: TDB Specific Business Opportunities:
Potential interest for RFID.
A) Company Description Merck Sharp and Dohme initiated a presence in Mexico in 1932. At present the company operates a single manufacturing facility located in Mexico City. The company is one of the leading pharmaceutical companies in Mexico, offering a wide variety of drug products and vaccines. B) Installed Packaging Machinery The company indicated to follow very strict guidelines in terms of the release of information related to their production technologies. Because of this situation, the company was not willing to provide sample information on their packing machinery inventory. However, the company indicated that the majority of its packing machinery suppliers were European companies. The company follows production and packing trends for its industry and selexcts potential suppliers based on the companies that are developing a leading role in specific equipment for the pharmaceutical industry. C) Last Packaging Machinery Purchase Even while the company was not willing to provide information on their stock of packing machinery, they indicated that their last purchase was for blister equipment, which they purchase from an Italian supplier.
Machinery Brand Country Cost (Approximately) Blisters N/A Italy N/A
D) Future Packaging Machinery Ordering Plans. Since their Mexican facilities are practically new, the company told us that they do not have yet established a budget for additional packaging machinery. However, they have been analyzing the possibility to implement the use of RFID coding for its products. As most of the products are packed in blister, any introduction of new products or production lines will require additional investments in blister equipment.
Machinery Units Origin Motive of purchase
For RFID N/A N/A Replace bar codes
Blisters N/A N/A Expansion
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E) Purchasing Policies and Financial Arrangements The selection processes for packaging machinery in MSD is done by first detecting a necessity in their facilities. Once they know what they need, the company creates a market research in order to learn on new technologies and manufacturers. The production department analyses the possible suppliers and makes a report which is then sent to the corporate offices in the U.S., where they make the final decision. It is more common that the corporate offices decide which suppliers MSD Mexico must look for, than the results from the market research. The company has a policy where they purchase all of their equipments directly from the manufacturer’s facilities. This is done with the purpose of receiving better services. As a result of this policy, MSD has indeed received a more personal post-sale service. Additionally, they receive personal training from the manufacturers for their maintenance staff. All the financing decisions and payments are done directly at the corporate offices in the U.S. F) Factors that Influence Purchasing Decisions
1. Cost-Benefit advantages 2. Price 3. Technical Support 4. Spare part availability 5. Brand
G) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. The company didn’t comment on a preferred brand or an existing business arrangement because of confidential policy reasons. However, they told us their impression on U.S. equipments vs. European packaging equipments. These are as follows: MSD thinks that American packaging equipments have decreased on their technology and quality. They told us that the US equipments have had several operation failures as well as a poor post-sale service. In the last year they also had problems on receiving the spare parts on time. MSD told us that US equipments have also increased in price. On the other hand, European manufacturers have improved importantly on their technological advances for packaging machinery. MSD has received a high-quality technical and service support from their European suppliers. They told us the post-sale service is twice as better from Europeans than Americans.
H) New Origin of Suppliers from Asia. MSD has manufacturing plants Singapore where they indicated to use packing machinery from Asian suppliers. The company considers that in a few years, Asian suppliers will represent very significant competition in the packing machinery industry. I) Trade Show Attendance / Trade Publication Information The company visits trade shows as the best way to learn about technology trends in its industry and to learn about potential equipment suppliers. Since the company likes to research first what is in the market, they usually attend to all the important expos of packaging machinery. J) Specific Interest MSD would like to receive information from packaging machinery manufacturers that have state-of-the-art pharmaceutical packaging machinery.
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K) Contact Information Company Name: Merck Sharp and Dohme de México S.A. de C.V. Contact: Mr. Alejandro Romero Position: Production Chief Manager Address: Av. Division del Norte 3377 Col. Xotopingo 04610 Mexico D.F., Mexico Telephone: (52-55) 5722-1600 Fax: (52-55) 5722-1600 Mail: [email protected] page: www.merck.com
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Novartis Farmacéutica, S.A. de C.V.
Industry: Pharmaceutical Sub Industry: Patent drug and veterinary products, and other
specialty pharmaceutical products Location: Mexico City Size: (sales) US $340 million Purchasing Potential:
TBD
Specific Business Opportunities:
Identity control equipment and auxiliary equipments for their machinery. Labeling Machines Codifiers (Laser Jet) Cartoning machines
A) Company Description Novartis initiated operations in Mexico over 50 years ago. In 1996 the company adopted the Novartis name after the merger of the Ciba and Sandoz operations. Currently they have two manufacturing plants in Mexico, one in Mexico City where the company manufactures human-health products and the other is located in Guadalajara, Jalisco, where they manufacture veterinary products and Gerber products. The pharmaceutical facility in Mexico works with a variety of patent drugs, health care and optical products. In these facilities all the packaging processes are done with the most strict standards. Additionally to the manufacturing of certain pharmaceutical products, the company also imports some finished products from its subsidiaries in Europe, some of the imported products are re-packaged in Mexico for its sale. B) Main Products Produced and how are they packed The company currently has three operating divisions in Mexico that produce drugs for the treatment of cancer, rheumatism, arthritis, central nervous and respiratory systems, skin and bones among other products. In 2005 the company expanded their generic drugs products in a global level, acquiring new product lines. Novartis today is considered to be a major conglomerated producer of health products
Product Brand Package Rheumatism control products
Butasolidina Oral products in blister and carton box, glass ampoule for intravenous application in blister and carton box, aluminum container for viscous and carton box.
Arthritis control products Butasolidina Oral products in blister and carton box, glass ampoule for intravenous application in blister and carton box, aluminum container for viscous and carton box.
Anti inflammatory Voltaren Oral products in blister and carton box, glass ampoule for intravenous application, aluminum container for viscous and carton box.
Generic products and antibiotics
Sandoz Bulk
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C) Installed Packing Machinery
Current Machinery Used Units Origin Average Age
Specification
Sterilize Machine/ ari 1 Italy 12 50% FedegAmpoule Filling Machine / Bosch* 1 Germany 14 80% Bottling Lines for liquids / IMA 1 Italy 4 50% Bottling Line for Solids / Kalish 1 Canada 6 80% Filling machine / Sarong 1 Italy 18 60% Mixer / Soneco 1 France 19 70% Cartoning / IWK 1 Germany 19 75% Weight Verification Machines / Icore 8 USA 5 80% Print and Apply Labeling Machines / Libra
2 Italy 6 90%
Labeling machine / Avery 1 USA 17 80% Inspecting for Ampoule (filling and particle free) / EASI
1 Japan 18 90%
Inspection systems / Laetus 1 Germany 3 100% Inspection systems / Pólux 1 Brazil 3 95% Blister Machinery / IMA 2 Italy 12 80% Blister Machinery / Bosch 1 Germany >4* 70% Blister Machine / Ulhman 1 Germany 19 70% Dispensing Machines / Solipack 2 Italy 14 80% Tablet Machinery / FETE 4 Germany 17 75% Tablet Machinery / KILIEN 2 Germany 32 75% Tablet Machinery / Stokes 1 USA 29 75% Cartoning machine / Marchesini 1 Italy 5 100% Fluid Dryer /GLAT 3 Germany 18 70% Fluid Dryer / Aeromatic 1 USA 21 50% Reactor / Moltomat 1 Germany 17 80% Reactor / OLSA 1 Germany 12 90% Leaflet & Coupon (Integrated) / Romaco 4 Italy 8 85% Vibrators 4 Germany 34 50% Tape dispensers 9 Various 10 90% Inspection System/ Laetus 1 Germany 2 90% Inspection System/ Polux 1 Brazil 2 90% Inspection System for ampoules/ TBD 1 N/A 2 90% Print and Apply Labeling Machines 3 N/A 2 90% *This machine was installed in Mexico during 2001, but came from a Novartis plant in Germany where it was in operation for 10 years. D) Last Packaging Machinery Purchase The last major packaging machinery purchase had an investment of approximately US$250,000 dollars. These took place in 2005.
Machinery Brand Country Cost (Approximately) Thermo forming Machines Farmores Italy N/A Cartoning Machines Marchesini Italy N/A
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E) Future Packing Machinery Ordering Plans. For 2006 Novartis has no specific purchasing plans to expand their packaging machinery base. Their investment plans are directed at purchasing control systems and complement equipment for their existing infrastructure.
Machinery Units Origin Motive of Purchase Estimate Budget Counter machines 1 N/A US$40,000 Control systems 3 Laetus To abide with the
norm and regulations requirements
US$ 60,000
Novartis’ packaging machinery budget is based on the short-term needs of the company. For 2006 the company hasn’t established a budget since they have all the machinery needed for the moment. Novartis has an internal policy which consists of constantly reviewing the productivity of their production lines. In order to consider new budgets the company goes through several equipment analyses and audits to identify where improvements are needed. The production areas with the lowest relative efficiency become priorities for the purchase of new equipment. Novartis gives maintenance to their equipment on a regular basis and schedules a yearly visit from their suppliers’ technicians, who review overall equipment functionality and also train Novartis’ maintenance crews. F) Purchasing Policies and Financial Arrangements The objective of Novartis is to standardize their machinery in order to facilitate maintenance and reduce operational complexity and problems, reduce costs and be able to send machinery from one plant to another. Novartis indicated that they can purchase packaging equipment from representatives of their suppliers in Mexico. The company indicated to receive better service if the purchase is made directly from the equipment manufacturer. As for spare parts, Novartis’ buys them directly from the manufacturers, since they consider this to be a faster alternative than placing an order with the local representative. The purchasing process decision making of packaging machinery is done in several ways; it all depends on the following:
• A thorough evaluation of new potential suppliers, where post-sales services, spare part availability, technical support costs, among others are analyzed.
• Recommendations done by other pharmaceutical companies or affiliates about packaging machinery suppliers.
• Bid contests between companies in order to see who offers the best economical deals.
Once the purchasing decision is reached, the Mexican offices are responsible for placing the order and negotiating a contract. Usually the financing scheme varies depending on the negotiation done with the supplier. In the majority of the cases Novartis pays 50% of the machinery and when it is delivered and installed the other 50%. G) Factors that Influence Purchasing Decisions 1. Performance and functionality 2. Previous experiences with supplier and recommendations from other Novartis affiliates worldwide. 3. State of the art technologies 4. On site service and local technical support 5. Price
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H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. Novartis has implemented strategic agreements with manufacturers to obtain preferential pricing, technical service and training when required. The company has developed agreements with Glatt, Fedegari and Bosch among others. This has helped the company to improve their machinery efficiency and to receive adequate service from these companies. Novartis considers the Europeans to be the leaders in packaging machinery for the pharmaceutical industry. Most of Novartis Mexico packing machinery is primarily from Germany and Italy. This is because the results obtained from these countries machinery have been excellent. Novartis indicated almost minimal experience with US suppliers of packing machinery. Novartis’ evaluation of packing machinery by country of origin: Origin Technology Flexibility Service Price Canada Very Good Very Good Bad Regular Germany Very Good Very Good Bad Bad Italy Very Good Very Good Bad Bad Japan Very Good Bad Bad Good I) Weaknesses and Strengths of the installed machinery. Brand: IMA Strengths:
• Easy use in its operation • Easy maintenance • Fast change of format
Weaknesses: • Low durability
J) New Origin of Suppliers from Asia. Novartis told us that they’ve only worked with Japanese packaging suppliers. The results have been satisfactory but not the best. As mentioned before, Europeans have more advanced technologies on pharmaceutical packaging machinery. They are not interested in exploring other Asian countries, especially China or Thailand, since they think that their technologies are old d quality. K) Trade Show Attendance / Trade Publication Information When the company wants to know more about the packaging machinery market and the new releases of machinery, they attend several expos and shows. They visit Expopack regularly and a pharmaceutical sector trade show called ExpoFarma taking place every year in Mexico. They are subscribed to specialized magazines like Manufactura, Magazines of the Pharmaceutical Association, El Asesor weekly newsletter and Latin American Pharmaceutical Technology. L) Specific Interest At present Novartis’ interest on packing machinery is concentrated on: Identity control equipment and auxiliary equipments for their machinery. Labeling Machines Codifiers (Laser Jet) Cartoning machines
and of ba
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M) Contact Information Company Name: Novartis Farmaceutica Contact: UFB Jorge García Position: Packing Manager Address: Calzada de Tlalpan N° 1779 Col. San Diego Churubusco 04120, México D.F. Telephone: (5255) 5420-8689 Fax: (5255) 5544-4344 e-mail: [email protected] Web page: www.novartis.com
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9. The Personal Care Industry:
9.1. Industry Overview. The market value for personal care products is estimated at $8.2 billion for 2005. A large number of multinational corporations are active selling and manufacturing these products in Mexico. In additional there are over 150 local companies also manufacturing, selling and exporting these products. Yearly investments in the sector are estimated at more than $1 billion and are used to expand production capacity or to introduce new manufacturing technologies and processes. Parallel to local production growth, imports of these products have also grown at a very solid rate since 1995 averaging 12% per year. During 2005 imports of personal care products reached $ 1.23 billion. The most important business organization in Mexico representing the interests of the personal care products industry is the National Chamber for the Perfume, Cosmetics, Personal Care and Hygiene
Products (Cámara Nacional de la Industria de Perfumería, Cosmética y Artículos de Tocador e Higiene). This organization estimates that 60% of total sales are carried out through traditional channels, which include supermarkets, drugstores, and personal care products stores. An important segment reaching 40% is comprised by direct or “door to door” sales, performed by a “spare time” sales force estimated at 1.8 million people using their free time to generating additional income.
9.2. Company Ranking by Size.
Multinational companies operating in Mexico dominate the Mexican market for personal care products. These companies manufacture a portion of their lines in Mexico and complement their offerings though inter-company imports. Some local companies have also achieved a leading position in the market especially those manufacturing soaps and cosmetics as well as others importing diverse personal care products.
9.3. Key Players. The largest companies in this market include:
Mexico's Largest Personal Care Products Manufacturers Company Sales 2004 Million US$
Procter & Gamble México 1,538 Avon Cosmetics 690 Bristol Myers de México 425 BDF Mexico 222
Mexican Grisi Hermanos 65.5
9.4.
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New Packaging Trends. The sector depends on fashion and marketing trends and needs to respond as fast as possible to trends if not be the leader and trend setter. The most important trend in the industry is that the companies are purchasing packing machinery to make their packing processes more efficient, especially for materials which have a complex to handle including powders, viscous etc. The sector is also being affected by copy-cat products. The companies are interested in beginning to use a hologram in the products to assure the consumer that the product is original. There is also a new rend to pack shampoos and gels in polyethylene bags in presentations from 50 to 1000 ml. The purpose is to eliminate the lost of the container and be able to offer the product as inexpensive as possible for the low segments of the market. There is also a trend to use more rigid packing materials to offer more protection to the products.
9.5. Company Profiles.
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BDF México, S.A. de C.V.
Industry: Personal Care Sub Industry: Creams, liquid lotions, ointmentsLocation: Mexico City Size: (sales) US$ 220 million Purchasing potential: N/A Specific Business Opportunities:
Labeling, capping and coding machines. End-of-line equipments and control systems.
Company Description: BDF develops innovative, high-quality products fro skin and beauty care. The company was established in Germany 120 years ago. Today it has grown worldwide, with a strong international presence with nearly 150 affiliates. The company’s philosophy is based on heavy research and development to deliver the best personal care products. In Mexico the company manufactures a wide range of personal care products. Some of the most important products produced locally are; face creams in glass jars and tin recipients, liquid lotions in plastic bottles, ointments is press tubes and lipsticks in rigid plastic tubes. The Mexican facility has modernize and implementing the best and state-of-the-art equipments in order to be competitive. The company in Mexico is constantly increasing its market share and expanding is performance with new and better products. Main Products Produced and How Are They Packed: BDF has grown importantly in Mexico. Today the company has been able to penetrate and even become leader in personal care products. Some of their most important brands are Nivea which has several face creams and tanning products, Atrix for hand creams and Labello a lip-care lipstick. Installed Packaging Machinery: The company sold their Kugler and Leeder machines since they were considered as obsolete. BDF told us that they have established a new policy that requires all their production facilities to have the same equipments and automated production processes. This standardization and modernization goals are considered for BDF vital for the company’s growth and expansion.
Current Machinery Used Brand Units Origin Average Age
Specification
Filling Machines for semi-viscous products.
Fill Pack
Norden Weckerle
Strunck
3
1 1 1
Germany
Sweden Germany Germany
One has 6 months and the other 3 years
6 5 8
85%
70% 70% 75%
Case Forming and Closing Machines
Little David 8 USA 4 60%
Palletizing Machines DMP 1 Germany 3 80%
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Since BDF is a German company, they have preferred to work with German products. The corporate offices in Germany required all facilities to work with the equipments suggested by the headquarters. Even though they consider that German equipments to be the leaders in this field and very flexible for their packing applications, they are open to learn on new equipments.
Last Purchases of Packaging Machinery. The company’s last purchase of packaging machinery took place in 2005, when they bought one filling machine for semi-viscous products from the brand Fill Pack. The reason for this purchase was to replace the Kugler and Leeder equipments.
Machinery Brand Country Filling Machine for semi-viscous products
Fill Pack Germany
Future Packaging Machinery Ordering Plans. BDF has developed an expansion plan from 2007 to 2010. This plan consists on investing on new equipment and modernizing their facilities worldwide. In Mexico the company has started to analyze their existing operations to define the equipment that will be required.
BDF Mexico hasn’t established a short-term plan for purchasing packaging machinery; however they told us that they might buy labeling, capping and coding machines in 2006. For the expansion plan project 2007-2010 they have initiated a project for the optimization and automation of end-of-line processes as well as control process systems. They told us that research for equipment acquisitions is mainly done in Germany.
Machinery Units Origin Motive of
purchase Estimate Budget
Capping Machines 1 N/A Automation N/A Labeling Machines 1 N/A Automation N/A Coding Machines 1 N/A Automation N/A
Purchasing Policies and Financial Arrangements. BDF Mexico package machinery purchases are done by an evaluation between 2 or 3 suppliers. The company analyses the technical efficiency of the equipments in order to determine the supplier’s capacity and potential. After that they develop a cost-benefit analysis which is delivered to the technical department. This department is in charge of informing BDF’s headquarters in Germany, where the final decision is made.
The main issues the company considers when selecting new equipment include; adequate training and service, flexibility and ease to operate and adapt the equipment to their constantly changing packing needs.
The company has an internal technical team that provides regular maintenance and repair work for the equipments. In addition, the company requires that their suppliers visit once a year the facilities to review the equipment and provide preventive maintenance.
BDF Mexico new payment scheme is done bye a 30% advance payment for the equipment; an additional 40% upon delivery and 30% after one month of having the equipment operating at their facility.
Factors That Influence Purchasing Decisions. 1. Quality 2. Service 3. Equipments that are similar from other BDF manufacturing plants. 4. Price 5. Flexibility 6. Easy maintenance
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Comments on Preferred Brands and Existing Business Arrangements With Packing Equipment Suppliers:
BDF thinks that German products are efficient, durable, and easy to maintain and to operate. BDF facilities are now working with 95% of packaging machinery from Germany.
BDF Mexico indicated several differences between US packaging manufacturers and European manufacturers. These are as follows: They think that American companies have developed easy to use equipments with better services. They think that they have also improved their prices; today they have become cheaper than the Europeans. On the other hand, they think that European companies have developed more packaging technologies and have grown in quality. The only problem for BDF Mexico is that they do not receive a proper service and spare parts because of the long distances.
Origin Technology Flexibility Service Price
United States Very Good Good Good Good
Germany Very Good Good Good Regular
Italy Regular Good Good Regular
I) New Origin of Suppliers from Asia. BDF has not been contacted by any Asian packaging manufacturer, they told us that they have only been invited to an expo in China. Since they have a standardization policy, the company is not interested in Asian manufacturers. J) Trade Show Attendance / Trade publication Information: BDF Mexico visits pharmaceutical and packing trade shows regularly like ExpoFarma and Expo-pack in Mexico, Interpack and Achema in Germany. The company also receives information from their suppliers covering new technologies and equipment changes. They prefer to attend to trade shows since they consider that it is the best place to learn on new suppliers and technologies.
K) Specific Interests BDF Mexico is currently interested in labeling, capping and coding machines, since they might purchase this kind of machinery in the short-term. The company is also interested in improving product presentations, which will create the need to purchase or adapt its packing machinery.
L) Contact Information: Company Name: BDF Mexico, S.A. de C.V. Contact: Ing. Omar Navarro Position: Production Manager Address: Poniente 116 # 509 Col. Industrial Vallejo 02300, México D.F. Telephone: (52) 5729-0372, 5729-0300 Fax: (52) 5587-7278E-mail: [email protected]
Web: www.beiersdorf.com
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Grupo PIMABE S.A. de C.V.
Industry: Personal Care Sub Industry: Dippers Location: Mexico City Size: (employees) 1300 Purchasing Potential: N/A Specific Business Opportunities:
Jet-Printers. Corrugated Bag Sealing Machines, conveyors.
A) Company Description: PIMABE is a Mexican company dedicated to the manufacturing of disposable hygienic products, principally diapers. The company has experienced significant demand growth and in addition to sales into the local market, the company is exporting to 35 countries. Currently they have 2 manufacturing plants in Mexico one in Puebla and the other one in Tijuana. The company is manufacturing around 2.4 billion diapers per year. Their top brands which have increased their market share in the last two years are: Chicolastic and Kiddes. Their main products are diapers, disposable tissues, and disposable diapers and women towels. B) Main Products Produced and how are they packed:
Product Brand Package Disposable dippers Chicolastic Plastic bags of 14, 16, 28, 36
and 40 dippers Disposable dippers Kiddes Plastic bags of 14, 16, 28, 36
and 40 dippers These plastic bags once they are filled, they are packed in corrugated cardboards. C) Installed Packing Machinery:
Current Machinery Used
Brand Units Origin Average Age
Specification
Wrapping Machine Wolftek 6 USA One of them 1 year. Three others 3 years and the last two 15 years.
90%
Tape dispenser machine 3m 25 USA 2 years 85% Semi-automatic bagging machine.
Amotek 1 Italy 4 years 80%
Bagging machine Used to be TCBM (Today is Vikoma)
1 Germany 17 years 85%
Automatic Bagging machine.
AST 4 USA 8 years 85%
Corrugated machine Best Pack
4 Taiwan 10 years 85%
Sealing and tape dispenser Best 20 Taiwan 10 years 85%
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machine Pack Bagging and Sealing machina.
Enplex 4 Mexico 2 years 90%
Pouching sealing machina. In-house 10 Mexico 1 year 90% Jet Printers VideoJet 21 USA 3 years and 4
wher bought in 2005
85%
Jet Printers Zansi 4 Italy 5 years 80% Jet Printers Marken 8 Spain 10 years 80% Jet Printers Marsh 2 USA 8 to 10 years 85%
D) Last Packaging Machinery Purchase: In the last three years PIMABE invested US$ 250,000 in packaging machinery equipment. PIMABE had several packing machinery purchases during 2005. Their investments were around US$ 100,000 dollars. The following table shows these recent purchases:
Machinery Brand Country Cost (Approximately)
4 Jet Printers. VideoJet USA N/A 10 Pouching sealing machine. Inhouse Mexico N/A 3 Sealing machines Enplex Mexico N/A
E) Future Packing Machinery Ordering Plans. The company is developing a program for future equipment and packing machinery investment. They told us that they might purchase some Jet-printers in 2006.
Machinery Units Origin Motive of purchase
Estimate Budget
Jet Printers N/A Mexico Expansion N/A PIMABE generally buys small equipment from Mexican manufacturers since they are able to receive faster and better services. They also think that Mexico has advanced both on production and on technology for small packaging machineries. They also mentioned that they would like to receive information from PMMI members in order to learn about new manufacturers. They would specially like to know of corrugated bag sealing machines and conveyors. F) Purchasing Policies and Financial Arrangements: The company prefers to buy the machinery from an established distributor in Mexico, however sometimes they prefer to go directly to the manufacturing plants, it all depends on the brand, the distance of the manufacturing plant and the costs involved. The purchasing decisions are made by a standardized process, established by the company. First, they implement a bid contest, were they invite several packaging machinery manufacturers, and then several tests are done to see the functionality and quality of the product. After these tests are done, the company makes different investment and maintenance costs analysis, and then chooses a manufacturer that qualifies their needs. PIMABE prefers to work with a company that gives post-sale services to their machinery. PIMABE receives personal training from their suppliers, in this way their employees have some knowledge on the machinery that is bought. The company has a special contract agreement with 3M, Zanazi and Videojet where they buy the original parts from these companies and in doing so, they receive a 25% discount on these products.
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Their financial policies are quite flexible; however, the company prefers to make the payment after 30 days that it was delivered. On the majority of their previous purchases they have negotiated with the suppliers in order to have financial agreements on a win-win basis. G) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has no preferred brand but thinks that the American machinery products are better than those from Europe for several reasons:
• The American product are easier to use and more robust. • Spare part availability is faster and easier to acquire if the company is established in the
United States because of the proximity with Mexico. • The machinery are usually more expensive in Europe • The life expectancy of an American machinery is longer than the European. • The only advantage of the European is that their technology is finer.
Origin Technology Flexibility Service Price United States Good Very Good Very Good Good Italian Very Good Good Very Good Regular Spanish Very Good Good Very Good Regular Asian Poor Poor Poor Good Mexican Good Good Good Good. H) Factors that Influence Purchasing Decisions In order of importance, the key purchasing decision factors considered by PIMABE at the time of purchasing new machinery include:
1. Functionality and quality. 2. Machinery that meets specific requirements for PIMABE needs. 3. Acquirement costs: such as maintenance costs 4. Technical support and post-sale services 5. Brand Price.
I) Weaknesses and Strengths of the installed machinery. Brand: Wolftek Strengths:
• Robust • Price • Technical Assistance • Spare parts
Weaknesses: • Difficult Maintenance • Poor electrical technology
Brand: Video-jet Strengths:
• Service • Spare parts availability
Weaknesses: • Operation cost is high • They are very delicate machines, usually they break very easily.
J) New Origin of Suppliers from Asia. The company currently works with Best Pack, which is an American company that manufactures their products in Taiwan. PIMABE’s personal experience with this machinery has been very bad. The machines are considered as very low quality; they have had several problems and
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have had constant machinery failures. They haven’t had any kind of offer by their current suppliers with machinery from Asia and PIMABE is not interested to evaluate other Asian products. K) Trade Show Attendance / Trade Publication Information The company attends regularly to the following International shows: Expo Pack, Feria Textil and Expo Control. The company also uses different kinds of magazines to learn more about the new trends and technology in packaging machinery. L) Specific Interest The company is interested in learning about packaging machinery suppliers manufacturing corrugated bag sealing machines and conveyors. M) Contact Information Company Name: PIMABE, S.A. de C.V. Contact: José Antonio Cañete Position: Engineer Plant Manager Address: Av. San Pablo Xochimehuacan 7213 Col. Las Lomas 72230 Puebla, Puebla, Mexico. Telephone: (52) (222) 223-6100 Fax: (222) 223-6162 e-mail: N/A
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Revlon de México, S.A. de C.V.
Industry: Personal care Sub Industry: Cosmetics, fragrances, personal
care products Location: Mexico City Size: (sales) US$ 45 million (Mexico) Purchasing potential: US$ 350,000 Specific Business Opportunities:
Labeling machine, Filling and capping machine for peroxide products, Labeling machine for corrugated carton, Capping machine, Bottle filler machine (carton).
A) Company Description: Revlon is one of the leading cosmetic and personal care brands in the world. The company has presence in 175 countries. The company sells its products under several brands including; Revlon, ColorStay, Age Defying, Almay, Ultima II, and Flex. Revlon has been present in the Mexican market for over 50 years, first as an important and later as a product manufacturer. The company’s current operation in Mexico consists of a facility where that pack imported products and others produced on a private label basis by local suppliers. The company went through a rough period during 2003-2005 with a very sharp decline in sales. The company is currently going through a reorganization of the Mexican operations, which will likely include the development of a purchasing program for packing machinery. The company is in the process of initiating the export of a few products into the US and Venezuelan markets. B) Main Products Produced and How Are They Packed: Revlon packs Shampoo in plastic bottles wrapped in polyethylene, body lotions and creams packed in PET and PVC, hair color in plastic HDPE cased in 12 and 24 piece boxes among others. Cosmetics are mostly packed in crystal and plastic containers, and some are packed in three piece chips. All cosmetics are also packed in cardboard boxes. In 2002 Revlon also began packaging cosmetics in blister-pack. C) Installed Packaging Machinery:
Current Machinery Used Units Origin Average Age
Bar Coding Machines / Sato 5 USA 3 Coders / Videojet, Domino, Willet and Markem
9 USA 3
Coding, Dating, Marking, Stamping 3 USA 7 Capping Machines, Kalish and Resina 4 Canada
USA 4
Single Piston Filling Machines 3 Mexico 15 Tape Dispensing Machines / Devek 6 USA 7 Conveyance System 8 Mexico 8
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Filling machine / Devek 6 USA 5 Filling machine (rotation) / MRM 2 USA 15 Filling machine (volumetric) / MRM 1 USA 7 Filling machine (lineal) / Equitek 1 Mexico 1.5 Filling machine (volumetric) 2 Mexico 1 Labeler / Logotech 1 Israel 5 Labeler / Taxa 1 Spain 3 Labeler (lineal) / Equitek 2 Mexico 1.5 Capping machine / Equitek 1 Mexico 1.5 Label Dispenser 1 USA 6 Pumps/ Hirsman, Wakesha 2 USA 6 Blister packaging line 2 Canada 3
All packaging machinery in Revlon’s plant in Mexico is originally from the U.S., Canada and Mexico with only some components such as labeling machines manufactured in Spain. As the company has faced a significant decline in product demand, the facility is operating at 35 to 40% of capacity.
D) Last Purchases of Packaging Machinery. The last major purchase of packaging machinery took place in 2005, when they acquired a Filling machine (volumetric) line from Equitek. Total investment for this equipment was about US$ 300,000.
Machinery Brand Country Filling machine (volumetric) Equitek Mexico
E) Future Packaging Machinery Ordering Plans. 2000-2002. Revlon in Mexico has a purchasing program for parking machinery consisting on budgets of US$ 300,000 for 4Q 2006 US$ 700,000 for 2007. The company is considering the purchase of the following equipment:
Machinery Units Origin Motive of Purchase Estimate Budget
Labeling machine 1 TBD Expansion and replacement
TBD
Filling and capping machine for peroxide products.
1 TBD Expansion and replacement
TBD
Labeling machine for corrugated carton
1 TBD Expansion and replacement
TBD
Capping machine 1 TBD Expansion and replacement
TBD
Bottle filler machine (carton) 1 TBD Expansion and replacement
TBD
F) Purchasing Policies and Financial Arrangements. Revlon defines packaging machinery requirements by taking into account demand trends and changes in product marketing affecting packing for the product. Once a requirement is defined, they look for potential suppliers in specialized trade publications and consult about additional potential suppliers with PMMI and the Mexican Association of Packing (AMEE). In addition to requesting product information from potential suppliers, Revlon requests a demonstration of the proposed equipment. The supplier can organize this by arranging for a visit to other facility operating the machinery in Mexico or other country. Once that Revlon has seen the proposed equipment in operation, they request quotes from at least three suppliers. The final
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decision process takes into account the proposed technology and the commitment to service the machinery. The price is important, but secondary to these last factors. All equipment purchases in Mexico in excess of US$ 100,000 require corporate approval from Revlon US, Even while Revlon operated 10 manufacturing facilities around the world, the plants have very limited communication with each other and do not share recommendations on potential suppliers or equipment. G) Factors That Influence Purchasing Decisions. 1. Technology. 2. Quality 3. Local servicing capabilities 4. Price 5. Delivery schedule and available financing. H) Comments on Preferred Brands and Existing Business Arrangements With Packing
Equipment Suppliers: Revlon indicated not to have any pre-existing commitment to any equipment supplier. But mentioned to only purchase equipment from well regarded suppliers who have earned their reputation through many years in the market. Revlon considers that European packaging machinery’s technology has surpassed that of US equipment, especially in regard to labelers, blister packaging machinery and other equipment. They indicated that this last factor is displacing US suppliers at least from these applications. Revlon provides – in house - regular maintenance to their equipment and for major repairs they utilize the suppliers’ technicians. This company buys spare parts form the local representatives of their suppliers. Revlon has begun to purchasing parking machinery from Mexican suppliers and is very satisfied with the results they are obtaining from filling, camping, labeling and orienting machines. The company indicated to have had very good results with European packing machinery, especially a labeling machine they purchased from a Spanish supplier. They mentioned to be aware about some US packing machinery suppliers that are producing the machines in Europe under contract with European machinery suppliers. Revlon evaluation of packaging machinery according by country of origin is the following:
Origin Technology Flexibility Service Price United States Very Good Regular Regular Average Canada Very Good Good Good Good Mexico Good Good Very Good Very Good Spain Very Good Very Good Very Good Average
I) New Origin of Suppliers from Asia. The company indicated to have received proposals from Asian parking machinery suppliers. They indicated that these companies are establishing local distribution in Mexico. Revlon indicated that these suppliers are making progress but that for the time being they World still not be considered as potential suppliers. The company also mentioned that Mexican suppliers have resulted in an excellent option for them as their technology and pricing are equivalent to Asian suppliers with the benefit that they can receive better service.
J) Trade Show Attendance / Trade publication Information: Revlons’ engineers attend trade-shows regularly, visiting Expopack in Mexico and also subscribe to specialized trade magazines like Reportero Industrial, and Computación Planta Industrial. Revlon also requests information on potential suppliers from PMMI.
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K) Specific Interests
Revlon is interested in receiving information on blister packaging machinery for cosmetics and fillers.
L) Contact Information: Company Name: Revlon de México, S.A. de C.V. Contact: Ing. Daniel Romero Position: Chief of Engineering Address: Av. División del Norte #3395 Col. Xotepingo 04610, México D.F. Telephone: (52) 5618-9125 Fax: (52) 5618-1985 E-mail: [email protected]
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10. Other Consumer Products:
10.1. Industry Overview. This division includes almost any product that can be purchased by a consumer and that requires packaging. In the sample of companies for this sector we have included very large companies like Comex, which is the leader in the paint industry in Latin America. Because of the almost boundary less composition of this category it is not possible to provide a description of the segment as “consumer products”.
10.2. Company Profiles.
10.3. New Packaging Trends. Some important packing trends in the segment include the following:
• Very dynamic sector with constant product presentation changes. The interest is for very flexible machines and for cost reduction in packing processes.
• In the paint industry a significant trend is the introduction of very small paint presentations.
• In the house cleaning sector there is a trend to reduce the cost of the packing with the use of LDP bags.
• Some companies are interested in security caps for child protection.
.
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Grupo Comex S.A. de C.V.
Industry: Industrial Sub Industry: Paints, coatings, roofing, etc. Location: Mexico City. Size: (sales) N/A Purchasing Potential:
Not yet established
Specific Business Opportunities:
Tinting implant machinery, can dispensing and closing machine, coding machine and other accessories. Shrink wrap machines
A) Company Description
Grupo Comex is a privately held, highly efficient and successful company controlling at least 50% of the paints and coatings market in Mexico. The company is vertically integrated from manufacturing to product distribution. The company has direct control over 3000 points of sale in Mexico. The company is divided in various areas, which include the following:
• Production • Distribution • Services • Research, product development and training
Comex operates four manufacturing plants in Mexico and two in the US and Canada. The company is also exporting into 45 international markets with significant market chare in central and south America. B) Main Products Produced and how are they packed Comex manufactures the following products:
• Vinylic and enamel paints • Adhesives • Products for wood • Aerosols • Solvents • Car Paint - Color Car • Acrylic paint Top 2000. • Texturized paints - Texturi, • Solvents. • Sealers.
Most of Comex paints and chemical products are packaged in cans and buckets ranging from 1/8 lt to 200 lt. drums.
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The following is a list of the most representative products:
Product Brand Package Painting Kits Comex Shrink pack ½ carton box Pinturas Aiva/solvente Meridien Liter and gallon container. Plastic and aluminum
cans. Pinturas solventes Comex Container Paints for wood Poliform Container Top 2000 Pimex Aluminum container Special paints Amercot Plastic container
C) Installed Packing Machinery The following list shows some of the packaging machinery of Comex. Since the packaging machinery installed base is wide and located in six different manufacturing plants, the company wasn’t able to give us all their installed machinery.
Current Machinery Used Brand Units Origin Average Age Specification Water based painting filling machines
Serac 6 USA 17-20 85%
Solvent filling machine Epsi 5 Germany 15 85% 1,500 meter conveyor system
In-house 15 Mexico 20 80%
Tapping machines In-house 11 Mexico 1 95% Labeling machines In-house 8 Mexico 2 85% Coding machines In-house 8 Mexico 6 months 90% Paletizers Heisler 7 Germany 8 85% Tray machines Heisler 6 Germany 8 85% Rin packs TEMI 2 Italy 2 85% Cartoning machines Colombia 8 Brazil 4 85% Paletizers Colombia 6 Brazil 4 75% Aerosol filling machines In-house 1 Mexico 3 85%
Comex has been successful in building some of their production and packing machinery in-house. The company indicated that if they had to purchase machinery their preference would be for European suppliers. D) Last Packaging Machinery Purchase Comex is continuously investing in upgrading and expanding its production lines. Comex last packaging purchase was in November 2005, where they bought two more shrink packs from the brand Tecmi due to the successful performance they had with this brand. The purchase was done with the purpose of expanding production capacity and improving quality in the process. Since Comex builds several of its machinery, they also purchased spare parts for servicing their machinery.
Machinery Brand Country Cost (Approximately) 2 Srhink pack Tecmi Italy N/A Spare parts N/A N/A N/A
Comex has a large maintenance team that is responsible for all maintenance and repairs. When the company purchases packaging equipment they require the supplier to provide Comex’s employees with adequate training for the operation and maintenance of the equipment.
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When machinery purchases are done, Comex prefers to contact a certified distributor of the manufacturing company. Comex is currently working with an American broker that imports all the machinery from Europe. This has been very helpful for the company because they receive faster services rather than contacting directly the European supplier which would take longer. E) Future Packing Machinery Ordering Plans and Purchasing Policies Selecting suppliers is determined by the quality, flexibility, and price of the machines. The procurement process is based solely on the specific needs that arise in the company.
Machinery Units Origin Motive of Purchase Estimate BudgetShrink Packs, Tecmi 2 Italy Satisfy clients needs
by expanding installed machinery.
N/A
Spare parts Undefined N/A They are going to use them to have
automated machinery.
N/A
Comex future packaging machinery purchases are defined by strict planning which takes into account a careful analysis of current manufacturing operations and product demand. The company can immediately respond to proceed with the purchase of any machine it might need to replace, expand or make more efficient any of its processes, When they require new equipments the department of engineering is in charge of researching and studying the technical and economical advantages that will bring that particular equipment to the company. Comex has certain purchasing policies which suppliers must meet. First, a previous evaluation of the suppliers is done in order to have the least machinery failures in their plants. Then, the company detects the volume of product needed for production and what kind of machinery will be needed in order to fulfill the company’s objectives. Secondly, the company evaluates the equipment’s durability and functionality (Comex expects the machine to work for at least 10 years). Thirdly, they initiate a bid process between four of the potential suppliers. The maintenance and the purchasing departments make a final recommendation which required the approval of top management. The company selects suppliers by the particular contribution their technology or equipment has achieved at other operations. Comex prefers smaller packaging machinery suppliers because they are easier to work with and are more flexible. Since small packaging manufacturers help Comex to build their machines, they look for suppliers that will provide quality products, functionality and confidentiality.
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F) Financial Policies and Arrangements Comex doesn’t have any particular financial policy or arrangement with their suppliers. Negotiations are done between Comex and the suppliers in order to have a fair deal for both parties. In their last purchases they have worked with the suppliers in three ways:
• The total payment of the machinery when it is delivered. • Monthly credit payments or, • 30% advanced payment and 70% when delivered.
Acquisitions depend on the requests of the engineering department, who needs budget approval from the finance department at the corporate level, once the budget is approved the purchasing department is responsible for the negotiation with the supplier. G) Factors that Influence Purchasing Decisions 1. Knowledge of Comex products 2. Flexibility 3. Safety procedures for the operation of the machines. 4. Price 5. Brand H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has no preference for any particular brand. However, they prefer to work with small companies rather than with large global manufacturers. Comex commented that European equipments have several advantages from the American equipments. The European machines are considered to have more technical quality, are easier to use and the prices are more attractive. The American equipment on the other hand, are considered to have better deliveries and functions. Origin Technology Flexibility Service Price United States Regular Very Good Regular Regular Germany Good Regular Very Good Good Italy Very Good Good Very Good Regular Spain Bad Bad Very Bad Bad Brazil Very Good Very Good Very Good Good I) Weaknesses and Strengths of Installed Machinery. Brand: Tecmi Strengths:
• Fast • Robust • Technology • Compact • Easy to use
Weaknesses: • Bad security •
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J) New Origin of Suppliers from Asia. The company has not looked into potential Asian equipment or packing machinery suppliers. K) Trade Show Attendance / Trade Publication Information Comex does not visit any trade show or expo. They prefer to make their own research, which is mainly done through the Internet. L) Specific Interest Comex would like to receive information on tinting implant machinery, can dispensing and closing machine, coding machine and other accessories. A very important factor that the company seeks is highly flexible and easy to use machines. The company will also be introducing very small content product applications to be sold for restoration and retouching. The company is interested in a shrink wrap machine for carton trays where they will place the small paint cans of 50,100 and 250 ml. M) Contact Information Company Name: Comex S.A. de C.V. Contact: Sigfredo Rico Aragón Position: Maintenance, Security and Project Director Address: Roberto Fulton #4 Col. Fraccionamiento Industrial San Nicolás Mexico City Telephone: (52-55) 1669-1400 e-mail: [email protected] page www.comex.com.mx
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Grupo Helvex, S.A. de C.V.
Industry: Construction. Sub Industry: Kitchen and Bathroom fixture
manufacturer Location: Mexico City Size: (employees) 2,000 Purchasing Potential:
$45,000 USD
Specific Business Opportunities:
Blister machines Thermoforming machines Labeling machines Bagging machines Polyethylene foam machines
A) Company Description Helvex is a leading manufacturer of bathroom and kitchen fixtures. The company started operations in 1950 and has grown significantly over the last ten years. The company operates four manufacturing facilities in Mexico . The company is committed to total quality programs which include manufacturing, product quality and packing presentation. B) Main Products Produced and how are they packed: The company produces a wide variety of fixtures and accessories. Sales have increased on their new state-of-the-art products like the brand Miura and Kubica, both focusing on the minimalist trends. Other products are designs of square and round knobs, strainers, sprinklers, water cans, and other bathroom and kitchen accessories.
Product Package Fixtures and accessories Plastic bags and
polyethylene foam C) Installed Packing Machinery With their new technological and modernization program the company has bought several packing machinery in order to replace the old machines The following list shows the current packaging machinery at Helvex. The following information concerns only the Vallejo plant (Mexico City) but they told us that the other plants have the same machinery and brand because of standardization goals and policies.
Current Machinery Used Brand Units Origin Average Age Specification Polyethylene Foam Packing Machine
Speed Packer
5 USA 2 85%
Thermoforming Machines Afisamatik 2 Mexico 20 85% Labeling machines Zebra 2 N/A 5 85% D) Last Packaging Machinery Purchase The last packaging machinery purchase was in 2005 where they acquired 5 polyethylene foam machines from Speed Packers.
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Machinery Brand Country Cost (Approximately)
Polyethylene Foam Machines
Speed Packers USA N/A
E) Future Packing Machinery Ordering Plans. The company will purchase a thermoforming machine to replace existing equipment which has become obsolete. The company is also interested in proceeding with several investments to increase the degree of production automation throughout the facility. The company has not selected a supplier but has received proposals from suppliers from Denmark, Mexico and Canada. The company has a budget of US$ 45, 000 and might consider a European supplier which they consider to have the best technology in this area.
Machinery Units Origin Motive of Purchase Estimate Budget Thermoforming Machines 1-2 TBD Replacement and to
increase production through automation
US $45,000
F) Purchasing Policies and Financial Arrangements Helvex prefers to purchase machinery directly from the manufacturers. They consider that going directly and negotiating with the company’s headquarters will yield in better service. Helvex has an in-house technical staff that is responsible for providing maintenance to all equipment and machinery. The company compares between the options offered by three suppliers before deciding on a purchase. The technical staff presents a recommendation to top management which is responsible for the approval of the purchase. G) Factors that Influence Purchasing Decisions
1. Price 2. Post-sale Services 3. Availability and Cost of spare parts 4. Equipment’s Country Origin 5. Brand
H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers. The company has almost no experience on European packing machinery suppliers. They indicate to have recently analyzed potential suppliers of specific packing machinery and consider that European technology is more advanced that the US in the specific thermoforming application for which they have interest.
Origin Technology Flexibility Service Price United States Good Good Regular Regular Germany Very Good Good Good Regular Denmark Very Good Good Good Very Good I) New Origin of Suppliers from Asia. The company indicated they purchase a packing machinery from China and that the results were very negative as while the price was very convenient the machine needed constant repairs. Their
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comments is that the savings you make when purchasing a machine from China are much less that the money you will spend on repairs and maintenance. J) Trade Show Attendance / Trade Publication Information The company attends to ExpoPack in Mexico. They do not go to other packing machinery expos since they think they are able to find all their needs in Expopack. In order to be informed of new technologies and trends, the company receives information from their suppliers and manufacturing magazines. K) Specific Interest Helvex is interested in receiving information on PMMI’s members, especially from those that manufacture high speed bagging machines and labeling machines. They are also interested on thermoforming machines as well as blister machines and polyethylene foam machines. L) Contact Information Company Name: Grupo Helvex, S.A. de C.V. Contact: Ing. Luis Enrique Altamirano Position: Engineering Manufacturing Manager Address: Calzada Coltongo 293 Col. Industrial Vallejo 02300 Mexico D.F., Mexico Telephone: (52-55) 5333-9400 Fax: (52-55) 5333-9400 e-mail: [email protected] page: www.helvex.com.mx
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Industrias Alen, S.A. de C.V.
Industry: Industrial Sub Industry: House hold and Cleaning products Location: Monterrey, Nuevo León, Size: (sales) US $ 350 Million Purchasing Potential:
US $1.3 Million
Specific Business Opportunities:
Injection molding machines, blow molding machines, filling machines, and automated packing machines.
A) Company Description Industrias Alen was established in 1951; today it has reached significantly market share in the household hygiene, cleaning and home care industry. The company is considered as one of the largest manufacturers of these products in Mexico. They have 5 production plants in Mexico and 2 in the United States. The company also owns their own distribution centers. In February 2005 the company inaugurated their 5th plant in Mexicali, Baja California. Thanks to this new production plant the company was able to have a 5% growth last year. Industrias Alen has established an important presence also in Central America, the Caribbean and the United States. B) Main Products Produced and How Are They Packed The main products distributed by the company are the following: Cloralex, Blancatel, Cloraluz, Pinol, Flash, Eco Pine, Eco Fresh, Eco Soft, Mr. Orange, Ensueño, Eficaz, Sultana, Vape.
Product Brand Package Liquid Cleaners Flash, Fulgor, Pinol, Pinol
Limón, Eco Pine Plastic bottle
Toilet odor control liquid Flash Plastic bottle Acids Sultana Plastic bottle Liquid detergent X pres Plastic bottle Kitchen cleaner Eficaz Plastic bottle Multipurpose fabrics Flash, Mr. Orange Plastic bags Bleach and Cloth disinfectant
Blancatel, Cloraluz, Cloralex
Plastic bottle
Cloth Softener Ensueño Plastic bottle Cloth hangers Colorines Pack Plastic jar and bags
Insectizide Vape Espirales Cardboard box and plastic bag
Toilet pills Pinol, Flash Cardboard box and plastic bag
Clorin for bathroom Cloralex Bathroom polyethylene In 2005 they introduced a new product for bathroom cleaning. This new product has enjoyed growing demand since its introduction to the market.
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C) Installed Packaging Machinery
Current Machinery Used Units Origin Average Age
Specification
Bottle blow molding / Bekum 50 USA 13 100% Bottle blow molding / AOKI 31 Japan 8 100% Bottle blow molding / Katex 11 Germany 6 100% Bottle blow molding / Uniloy 20 USA 8 100% Filling Machines / Equiteck 4 USA 8 60% Filling machines / MRM Elgin 10 USA 4 100% Filling machine / Mengibar 1 Spain .2 100% Tapping machines / Surekap 30 USA 9 70% Labeling machines / Krones 14 Germany 12 100% Labeling machines / Logotech 29 USA 12 80% Printing machines/ MP 25 USA 13 70% Coding machines / Marsch 65 USA 8 60% Coding machines / Markem 17 USA 8 100% Box forming machines/ COMBI 18 USA 6 80% Box forming machines/ FWF 4 USA 3 100% Box sealing machines/ 3M 50 USA 7 100% Palletizing machines/ Lantech 15 USA 5 100% Bottle orienting machines 5 USA 4 100% Labeling Machines / BIH 4 USA 2 100%
The company will replace all their coding machinery.. D) Last Packaging Machinery Purchase The company begun in 2005 a program to increase production capacity at all their facilities. Since this expansion program, Industrias purchasing packing machinery and will continue doing so over the following months, In 2005 they purchased a filling machine from MRM Elign and a blow molding machine from Uniloy.
Machinery Brand Country Filling Machine MRM
Elgin USA
Blow molding Machine Uniloy USA The company was very satisfied with these brands, so they decided to continue to purchase form these suppliers. E) Future Packaging Machinery Ordering Plans. The company has between US$ 1 and 1.3 million that will be used for the purchase of packing machinery over the following months. Industrias Alen has a 10 year manufacturing plan that consists on analyzing the sales trends of their products and calculating the amount of capacity needed in their manufacturing plants to carry out with the expected product demand growth and introduction of new products. The product presentation is one of the most important factors for the company so they are constantly
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reconfiguring the existent packaging machinery as they create new bottles with different packaging and product presentations. Industrias Alen is interested in purchasing new lines for packaging. Their specific needs are the following: injection molding machines, blow molding machines, filling machines and automated packing machines. Industrias Alen didn’t specify how many lines were to be purchased. Their current supplier might be selected for this purchase. F) Purchasing Policies and Financial Arrangements Their purchasing policies include comparing proposals from three potential suppliers. Industrias Alen indicated that sound technologies and solid service commitment are key factors for supplier selection. They told us that they have noticed an increase in the post-sale services of all their suppliers. The company will consider switching suppliers if they have a better offer with better pricing of post-sale services. The company might consider vender financing when available. G) Factors that Influence Purchasing Decisions
1. Price 2. Cost of the post-sale service 3. Technology 4. Time delivery 5. Brand recommendations
H) Comments on Preferred Brands and Existing Business Arrangements with Packaging Equipment Suppliers. Industrias Alen doesn’t have a preferred brand or any business arrangement with their packaging equipment suppliers. The company is open to learning about additional supplier options of packing machinery. The company indicated to be satisfied with the use of machinery from the following brands: Katex, Bekum, Uniloy, Nisei and Aoki. The company considers that service costs have increased significantly over the past two years. Industrias Alen considers that European suppliers have more advanced technologies than US suppliers. Origin Technology Flexibility Service Price United States Good Good Good Good Spain Good Good Regular Regular Germany Good Good Good Good Japan Good Regular Good Good I) New Origin of Suppliers from Asia. The company currently works with packaging manufacturers from Japan. They told us that they are not accepting proposals from Korean or Chinese manufacturers since they consider them as low quality manufacturers. Industrias Alen has heard in the market that companies from these countries have supplied useless machines.
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J) Trade Show Attendance / Trade Publication Information Commonly Industrias Alen attends all the packaging machinery trade shows and events. They consider that the best way to learn of new trends and technologies is by attending these shows. K) Specific Interest Industrias Alen would like to receive information on injection molding machines, blow molding machines, filling machines, and automated packing machines. L) Contact Information Company Name: IndustriasAlen, S.A. de C.V. Contact: Ing. Roberto Sifuentes Position: Engineering and Project Manager Address: Boulevard Díaz Ordáz # 1000, Col. Los Treviño,
66350, Santa Catarina, Nuevo León, México. Telephone: (52-81) 8122-1000 ext. 1308 Fax: (52-81) 8122-1594 Mail: [email protected]: www.alen.com.mx
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APPENDIX 1.Packaging Machinery Import Statistics 2003-2005:
UDG: 8422.20 to 8422.40, Just Machinery Year To Date: January – December
Thousands United States Dollars % Share % ChangePartner Country 2003 2004 2005* 2003 2004 2005* 2005/2004
World
362,751 376,867 378,549 100.00 100.00 100.00 .45
Italy
106,175 101,617 105,771 29.27 27.01 27.97 4.09
United States
100,555 91,560 74,588 27.72 24.34 19.72 -18.54Germany 54,272 70,065 82,810 14.96 18.62 21.90 18.19France 21,134 15,711 24,305 5.83 4.18 6.43 54.70Spain 11,827 15,407 21,507 3.26 4.09 5.69 39.59Sweden 11,051 13,342 9,629 3.05 3.55 2.55 -27.83Brazil 9,058 4,606 9,958 2.50 1.22 2.63 116.20Switzerland 7,147 4,267 3,360 1.97 1.13 .89 -21.26European Econ. Comm. 6,739 2,500 1,833 1.86 .66 .48 -26.68Japan 5,364 14,924 6,525 1.48 3.97 1.73 -56.28Canada 4,569 4,087 7,569 1.26 1.09 2 85.20United Kingdom 4,462 5,648 4,683 1.23 1.50 1.24 -17.09Argentina 4,228 2,818 3,027 1.17 .75 .80 7.42Netherlands 3,752 8,920 6,612 1.03 2.37 1.75 -25.87Taiwan 2,966 2,540 3,142 0.82 .68 .83 23.70Australia 2,254 3,498 3,338 0.62 .93 .88 -4.57Denmark 1,794 800 3,496 0.49 .21 .92 337Korea South 1,587 2,048 1,308 0.44 .54 .35 -36.13Slovakia 739 - - 0.20 - - -South Africa 674 - - 0.19 - - -Chile 542 1,607 48 0.15 .43 .01 -97.01China 416 2,381 1,814 0.11 .63 .48 -23.81Colombia 322 1,074 550 0.09 .29 .15 -48.79Israel 220 227 11 0.06 .06 .001 -95.15Ecuador 214 - 653 0.06 - .17 -Czech Republic 113 346 245 0.03 .09 .06 -29.19Austria 100 1,004 204 0.03 .27 .05 -79.68Guatemala 77 - - 0.02 - - -Venezuela 68 26 - 0.02 .01 - -New Zealand 49 2 2 0.01 .001 .0001 0Thailand 47 24 33 0.01 .01 .01 37.50India 39 61 137 0.01 .02 .04 124.59Bahamas 38 - - 0.01 - - -San Marino 26 52 14 0.01 .01 .001 -73.08Singapore 21 - 11 0.01 - .001 -Poland 21 140 45 0.01 .04 .01 -67.86
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164
Puerto Rico (U.S.) 19 1 - 0.01 - - -Finland 15 15 681 - - .18 4440Swaziland 11 1,035 9 - .28 .001 -99.13Slovenia 8 - 12 - - .001 -Nepal 8 - - - - - -Malaysia 6 1,315 66 - .35 .02 -94.98Costa Rica 6 - 6 - - .0001 -Ireland 6 94 - - .02 - -Hong Kong 4 31 33 - .01 .01 6.45Uruguay 3 233 4 - .06 .0001 -98.28Unidentified Country 2 2 - - - - -Belgium 2 1,125 123 - .30 .03 -89.07Portugal 1 11 - - - - -Hungary 1 - 366 - - .10 -Iran 1 - - - - - -Russia - 9 - - - - -Korea North - 32 9 - .01 .001 -71.88Norway - 439 - - .12 - -El Salvador - 104 - - .03 - -Saudi Arabia - 10 - - - - -Senegal - 2 - - - - -Peru - 18 - - - - -Ucrane - 8 - - - - -Luxemburgo - 461 - - .12 - -Chipre - - 15 - - .001 -
*Estimated by HDC
Mexico Import Statistics From World Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005 2003 2004 2005* 2005/20048422.20 to 8422.40 Just Machinery
362,751 376,867 378,549 100 100 100 .45
842240 Packing Or Wrapping Machinery, Nesoi
188,581 132,672 159,840 51.99 35.20 42.22 20.48
842230 Machinery For Filling, Closing Bottles, Etc
145,162 221,375 197,936 40.02 58.74 52.29 -10.59
842220 Mach For Clean Or Dry Bottles Or Other Containers 29,008 22,820 20,744 8 6.06 5.48 -9.10
*Estimated
Mexico Import Statistics From Italy Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005* 2005/20048422.20 to 8422.40 Just Machinery
106,175 101,617 105,771 100 100 100 4.09
842240 Packing Or Wrapping Machinery, Nesoi
34,376 28,441 45,483 32.38 27.99 43 59.92842230 Machinery For Filling, Closing Bottles, Etc 51,160 56,522 45,281 48.18 55.62 42.81 -19.89
842220 Mach For Clean Or Dry Bottles Or Other Containers 20,640 16,654 15,008 19.44 16.39 14.19 -9.88
*Estimated
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Mexico Import Statistics From United States Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005 2003 2004 2005 2005/20048422.20 to 8422.40 Just Machinery
100,555 91,560 74,588 100 100 100 -18.54
842240 Packing Or Wrapping Machinery, Nesoi 55,720 51,478 37,756 55.41 56.22 50.62 -56.66842230 Machinery For Filling, Closing Bottles, Etc 40,676 37,388 35,682 40.45 40.83 47.84 -4.56
842220 Mach For Clean Or Dry Bottles Or Other Containers 4,159 2,694 1,150 4.14 2.94 1.54 -57.31
Mexico Import Statistics From Germany Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005* 2005/20048422.20 to 8422.40 Just Machinery 54,272 70,065 82,810 100 100 100 18.19842240 Packing Or Wrapping Machinery, Nesoi 17,679 19,117 30,366 32.57 27.28 36.67 58.84
842230 Machinery For Filling, Closing Bottles, Etc
35,827 49,052 52,161 66.01 70.01 62.99 6.34
842220 Mach For Clean Or Dry Bottles Or Other Containers 766 1,896 284 1.41 2.71 .34 -85.02
*Estimated
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Mexico Import Statistics From France Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January – December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005* 2005/20048422.20 to 8422.40 Just Machinery 21,134 15,711 24,305 100 100 100 54.70842240 Packing Or Wrapping Machinery, Nesoi 5,989 4,937 5,006 28.34 31.42 20.60 1.40842230 Machinery For Filling, Closing Bottles, Etc 15,115 10,539 16,038 71.5 67.08 65.99 52.18
842220 Mach For Clean Or Dry Bottles Or Other Containers 30 235 3,261 0.14 1.50 13.42 1287.66
*Estimated
Mexico Import Statistics From Spain Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005* 2005/20048422.20 to 8422.40 Just Machinery 11,827 15,407 21,507 100 100 100 39.59842240 Packing Or Wrapping Machinery, Nesoi 4,137 3,983 8,614 35 25.85 40.05 116.27842230 Machinery For Filling, Closing Bottles, Etc 7,533 11,285 12,469 63.7 73.25 57.98 10.49
842220 Mach For Clean Or Dry Bottles Or Other Containers 157 139 424 1.33 .90 1.97 205.04
*Estimated
167
Mexico Import Statistics From Sweden Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January - December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005 2005/20048422.20 to 8422.40 Just Machinery 11,051 13,342 9,629 100 100 100 -27.83842240 Packing Or Wrapping Machinery, Nesoi 2,359 1,939 2,230 21.4 14.53 23.16 15.01842230 Machinery For Filling, Closing Bottles, Etc 8,677 11,397 7,398 78.5 85.42 76.83 -35.09
842220 Mach For Clean Or Dry Bottles Or Other Containers 15 6 0 0.14 .04 0 -100
*Estimated
Mexico Import Statistics From Brazil Commodity: 8422.20 to 8422.40, Just Machinery
Year To Date: January – December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005 2005/20048422.20 to 8422.40 Just Machinery 9,058 4,606 9,958 100 100 100 116.20842240 Packing Or Wrapping Machinery, Nesoi 3,491 1,828 6,193 38.54 39.69 62.19 238.8842230 Machinery For Filling, Closing Bottles, Etc 2,796 2,428 3,417 30.87 52.71 34.31 40.73
842220 Mach For Clean Or Dry Bottles Or Other Containers 2,770 350 347 30.58 7.60 3.48 -.86
*Estimated
168
Mexico Import Statistics From China
Commodity: 8422.20 to 8422.40, Just Machinery Year To Date: January – December
Thousands United States Dollars % Share % Change Commodity Description
2003 2004 2005* 2003 2004 2005 2005/20048422.20 to 8422.40 Just Machinery 416 2,381 1,814 100 100 100 -23.81842240 Packing Or Wrapping Machinery, Nesoi 185 944 896 44.47 39.65 49.39 -5.08842230 Machinery For Filling, Closing Bottles, Etc 231 1,148 905 55.53 48.22 49.89 -21.17
842220 Mach For Clean Or Dry Bottles Or Other Containers 0 19 14 0 .8 .77 -26.32
*Estimated
169