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April 17, 1995 02:00 AM

PLASTIC PALLETS TAKE OFF IN LATIN AMERICA

Richard Higgs
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    MEXICO CITY - Increasing foreign demand for a clean, efficient alternative to the wooden freight pallet is spawning a new market for plastics molders in Latin America. The trend in favor of plastics pallets, particularly for shipping hygiene-sensitive goods like fresh produce, medical and pharmaceuticals, also is opening up new opportunities for North American makers of large injection molds.

    One molder capitalizing on the trend is Plastructuras SA de CV of Naucalpan, Mexico.

    The company plans a US$6 million joint venture with a Colombian customer to set up a pallet manufacturing plant there, which is due to start up in mid-1996.

    Plastructuras is negotiating a similar plan with its distributor in Chile, according to General Director Fernando Sep£lveda.

    Plastructuras makes polyethylene pallets using structural foam injection molding.

    The company operates a plant in Querutaro, Mexico. The facility is capable of making 300,000 pallets per year.

    The company is investing US$1 million on nine new pallet molds this year.

    This will enable it to offer a complete size range in Mexico and open up new market sector opportunities.

    ``We have 14 different models and can now supply about 40 percent of the market, but the other 60 percent [served by wood pallets] are of dimensions that we cannot supply,'' Sep£lveda said.

    Plastructuras currently has two molds producing basic 40-inch by 48-inch pallets. Other sizes, up to 48 inches by 80 inches, are made by welding units together.

    He said the plastics pallet market in Mexico, unlike the specialized one in the United States, is more general.

    ``Our special market is not that big so we have to attack the whole market - areas like cement, soda groups, soaps, etc.,'' he said.

    The company has suffered two lean years.

    Pallet sales have been halved in the face of Mexico's current economic crisis. So, says Sep£lveda, it is launching a new joint venture pallet rental service in May with a financial group.

    Sep£lveda said reactions from customers, many of them big multinational groups such as Kellogg Co. and Ciba-Geigy, have been favorable because endusers avoid big investment and enjoy an attractive price to rent pallets. Soft drink and beer makers also are being targeted.

    The joint-venture company, Serfico SA, will charge the same price per plastic pallet as clients pay to buy less durable wooden pallets, which sometimes last only three months.

    An initial investment of US$2 million will go into the new business with a plan to double that for the following three years, Sep£lveda said.

    Plastructuras plans to build up inventory of 63,000 pallets in the first year - 40 percent of its existing output - for rental.

    Sep£lveda said his company will buy the first new mold from Springfield Mold Works Inc., of Springfield, Mass. He plans to add another new mold each month until the end of the year, but said he has not decided on suppliers for these.

    Springfield Mold is a 22-person mold shop specializing in low-pressure and blow molding processes with annual sales of about US$2 million.

    President Ciro L. Petrucelli said there has been significant growth in mold demand for materials handling, such as structural foam pallets and two-way, knockdown containers, in the past five years.

    Another mold maker talking to the Plastructuras is Snider Mold Co. Inc. of Mequon, Wis. International marketing director James Meinert said there is growing demand for substitution of wood pallets in Europe for goods such as fresh produce shipped from Latin America.

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