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Sales of plastics machinery and molds in Mexico hit an estimated $636.3 million in 1996, with 90 percent of that amount coming from imports, according to a report issued by the U.S. Department of Commerce.

U.S.-made machines hold a commanding 40 percent market share overall, according to the report, which was issued in March by the U.S. Embassy in Mexico City. The report covers all types of machinery, including injection molding presses, extruders, blow molding machines, thermoformers, various forms of auxiliary machines, parts and molds.

Germany holds 21.7 percent of the market, followed by Italy with 8.1 percent and Japan with 7.2 percent. An ``others'' category accounted for the remaining 22.7 percent. Germany's market share has been slowly increasing, the report said.

Of the 1996 total, imports accounted for $576 million, or 90 percent. The overall market is expected to grow by 5 percent in 1997, to $666.2 million. Imports should grow by 6 percent, to hit 92 percent of the market in 1997, the report said.

U.S. producers dominate in three of the four major machinery categories, grabbing a 68 percent share of injection molding machines sold in Mexico, 62 percent of extruders and 75 percent of blow molding machines. In thermoformers, France leads with a 41 percent share of the market, over the United States at 29 percent.

Mexico has 3,201 plastics processors. Nearly 60 percent of those companies have fewer than 15 employees, and most use commodity resins. Only a few use engineering resins to make demanding parts for markets such as automotive and electronics.

Mexico's processors use machines averaging 18 years old.

The Mexican machinery sector remains very small, accounting for only 10 percent of domestic sales, the report said. Estimates show only 10 companies make production machines for plastics. Another 110 make molds and dies, but the report said most of those also do plastics processing.

The U.S. government report also said Mexico is rebounding from its crippling peso crisis, caused by a massive currency devaluation in December 1994. Over the following 12 months, the peso lost 55 percent of its value against the U.S. dollar — meaning U.S.-made products cost 55 percent more than before in Mexico.

Machinery company executives said the peso crisis dashed what had been a promising market, not long after the signing of the North American Free Trade Agreement. In 1994, the first year of NAFTA, U.S.-Mexico trade increased by 23 percent, balanced between imports and exports. After the peso crisis, U.S. exports to Mexico declined 9 percent in 1995, as goods shipped from Mexico to the United States increased 25 percent.

``The period from January 1995 through the first half of 1996 was a time of painful adjustment for Mexico,'' the report said.

On the positive side, the currency crisis hammered down Mexico's big trade deficit, from $29 billion in 1994 to less than $700 million in 1995. During the first half of 1996, the peso appreciated slightly, interest rates fell sharply, and the stock market posted big gains, the report said. Industrial output also enjoyed a big gain. Domestic interest rates are still relatively high, at 35-40 percent.