MEXICO CITY - Mexican manufacturers of plastics processing machinery, confronted by intense import competition and increasingly sophisticated global technology, appear today to be a dying breed. But one stubborn survivor among the small, Mexican builders of complete molding systems, Beutelspacher SA de CV, has carved a solid niche with a mix of versatility, simple and inventive technology, export drive and economic pricing.
The family-run producer of extrusion and blow molding machines was founded by German-descended Sergio Beutelspacher on the 5,382-square-foot patio of his father's home in the Portales district of Mexico City in 1970.
The firm admits that it, like all suppliers, has suffered with bare order books as a result of Mexico's economic crisis. In the first three months of 1995 it had just three machine orders, compared with 12 last year. But Beutelspacher, 61, eagerly is grasping the challenge to export his homespun brand of technology.
He is optimistic that within a few months, as Mexican processors begin to invest again, they will turn to his equipment instead of more expensive, imported machinery.
In 1970, start-up capital for the budding entrepreneur was $1,200. Armed with several years' experience with different plastics processors around Mexico, Beutelspacher sold his first simple, 30-millimeter extruder to polyethylene bag maker Plastherm de Yucatan of Merida, Mexico, for $1,500.
Much of his work was producing parts for used machines and repair jobs. But by 1975, with sales growing and the work area shrinking, Beutelspacher moved to a 10,764-square-foot plant in Portales. Annual sales totaled $20,000 that year.
After three years, Beutelspacher left for the newly designated industrial area of Tl huac. There, he bought the 21/2 acres of land his firm occupies today.
Beutelspacher said a great time for processors was the end of the 1970s and early 1980s. Demand for plastics grew almost daily. Foreign machinery was selling well, but the entrepreneur said he sold his pipe and profile extrusion machinery ``on [lower] price, service and [simple] technology.''
``We sold our machinery at prices up to 40 percent below the cost of imported equipment,'' Beutelspacher said.
Firms selling imported machines raised prices to reflect expensive and sophisticated technology, but his simple brand of technology kept the price down.
Ironically, the firm benefited from almost five years of unfettered sales growth from the start of Mexico's last currency devaluation in 1982. During 1982 alone Beutelspacher sold nearly 40 complete extrusion lines worth about $4 million as the crumbling peso value increased the cost of imports.
``Devaluation was very strongly felt in Mexico then. This is always a good time for me,'' he said.
Taiwanese machines sold strongly in Mexico before the last devaluation, but after 1983, processors opted for Mexican equipment based on its favorable cost, he said.
Today, the firm makes single-screw extrusion machines as large as 150mm with complete extrusion lines for pipe, film, bottle, profiles, etc., along with a range of auxiliary equipment.
Three years ago, Beutelspacher introduced his first simple, single-cavity PET bottle preform blow molding machine, the SBP-2000, for bottles as large as 2 liters. His principal target was Mexico's quickly expanding refrescos, or soft drinks, sector.
``It's a problem to transport empty PET bottles to local bottling plants. So the idea is to use this machine in-line [with filling] at the plants,'' he explained.
But, with refrescos sales threatened by high inflation this year, he has adjusted his aim to the staple cooking oil and purified water markets.
In 1994, Beutelspacher sold eight of his blow molding machines. This year, with similar technology but a substantially lower price than imported counterparts to his models, he predicts the sale of 30 machines.
The price advantage will prove irresistible in Mexico, he said, because he plans to sell his model for $54,000, while its foreign counterpart costs about $300,000.
He said he believes in trade fairs as a means of promoting his product. When exhibiting at his first NPE show in Chicago, in 1991, he won his first export business - the sale of three extrusion machines of 30mm, 50mm and 90mm, to a Guatemalan pipe extruder for $200,000.
More recently, the firm received a steady flow of inquiries from as far away as Kenya in East Africa, Singapore, Taiwan and the United Arab Emirates, largely for the new blow molding machine. But Central and South America have provided more solid business.
For 1995, he plans to export as much as 60 percent of his blow molding machine production and expects to turn current U.S. inquiries into solid sales.
``For us, the future is to export. Using our own technology, we will attack small market [niches], for example in Central and South America, not suited to the big U.S. or European [supplier] companies,'' he said.
Last year, sales topped $1 million, with 70 percent of thefirm's total business representing complete machine sales and 30 percent parts and repairs, the company president said.
Beutelspacher's three sons work in the business and a daughter will soon join them.
Beutelspacher said several firms sought equity interest, but he rejected them because they wanted to take control of his company.
``We're open to possible agreement with a foreign firm. We are seeking a partnership under favorable conditions,'' he said.
``We want to maintain control, but with up to say 49 percent outside equity share,'' he said.