Housewares are discretionary purchases at the best of times and they will be hit hard this year, according to most suppliers to the Mexican market. Markets look so poor the Chicago-based National Housewares Manufacturers Association canceled a U.S. exhibit and trade mission set for June 13-15 at the U.S. Trade Center in Mexico City.
``The current Mexican economy is having an effect on our members' willingness to explore that market,'' NHMA Executive Director Thomas Conley said in an April 10 news release.
The peso's devaluation essentially doubled the Mexican price for U.S.-made housewares, said Ken Norskog, international sales manager for small appliance maker West Bend Co. of West Bend, Wis.
``We are shipping much less [in 1995] than last year,'' Norskog said. ``We might ship one quarter of last year's volume unless things change.''
West Bend planned to participate in the NHMA exhibit but expected poor buyer reaction to U.S.-made goods. It has an electronic subassembly plant in Mexico, but does most manufacturing, including plastic component molding, in Wisconsin.
A Newell International official said he is disappointed NHMA canceled the exhibit but he expects houseware sales to fall 20 percent or more this year.
The peso devaluation ``has had a severe effect on the 1995 market,'' said Keith Ryan, spokesman for the Rockford, Ill., producer of bakeware, glassware and plastic housewares.
Ryan said Newell ``will still go after the market as aggressively as we ever did because the market will come back.''
``Currency fluctuation is a reality. You can't duck in and out of international markets.''
Housewares giant Rubbermaid Inc. also sees the long view for Mexico and is investing to boost productivity at its Tultitl n, Mexico, plant acquired from Cipsa in 1992. Tultitl n does all of its own injection and blow molding.
Rubbermaid de Mexico SA de CV did about $80 million worth of business in Mexico last year and uses the Tultitl n plant as a springboard for sales in Latin America. The operation's director general, Ricardo Tochijara, said earlier this year his firm plans to increase production in 1995 by 30 percent because the weak peso has cut costs. He expected higher exports.
Rubbermaid's income in Mexico has been hurt by changing consumer buying patterns caused by the weak peso, said William Pfund, spokesman for Rubbermaid in Wooster, Ohio. He declined to be more specific.
Pro-Mart Industries Inc. is confident 1995 will shape up well for its Mexican sales, said Azad Sabounjin, marketing manager for the Rancho Cucamonga, Calif., producer of laundry hampers, drying racks, storage products and other housewares.
``Some customers stopped buying for a few months and then started again,'' he said. New customers such as Woolworth Mexico have offset buyers who put purchases on hold.
``We had to make sacrifices on terms'' to clinch deals, Sabounjin said. ``If you're rigid, you won't get there.''
Pro-Mart is relatively new to Mexico's market, and new products have helped it grow there, he added. As well, the firm's high-end products are aimed at consumers who are not badly hurt by the peso devaluation.
``Our Mexican consumers are still buying,'' Sabounjin said.
Pro-Mart contracts out its injection molding in Mexico to save costs. It does its own tubing and profile extrusion and assembly in Rancho Cucamonga.
Ryan expects the peso devaluation will chase ``short-term players'' from Mexico's market. Newell will continue marketing Wearever and Anchor Hocking brand products and ``hope the buyers remember us.''
Mexican buyers' next chance to sample U.S. housewares at a show will be June 1996, when NHMA and Asociacion Nacional de Tiendas de Autoservicio y Departamentales plan to feature companies from the United States, Canada and Mexico. The show will be a revival of one postponed a year ago by the Mexican retailers association.