MONTERREY, MEXICO - Ask Felipe Muzquiz about the Mexican economic crisis and how processors have been affected, and the answer you get is: depends. ``The more you were hit by imports before the devaluation, the better off you are now,'' said Muzquiz, president of Cuprum Pl sticos SA de CV. ``And if you can export, you're in good shape, too.''
And if, like Cuprum, you have a strong U.S. joint venture partner and make proprietary products in strong demand, you're not doing too badly, either.
Two years ago, Cuprum and Nicholas Plastics Inc., an automotive and office furniture supplier in Grand Rapids, Mich., entered a joint venture to produce extrusions and molded products at Cuprum's 45,000-square-foot plant in Monterrey.
Nicholas was looking for a manufacturing base in Mexico to meet customers' demands for more locally made auto parts. It also wanted to position itself for expected growth in the Mexican auto industry.
Cuprum, for its part, was assessing its future in an economy that was shedding its protectionist ways and preparing for global competition under the North American Free Trade Agreement.
``We knew, or at least suspected, that something big was happening. But if we wanted to be a force of any magnitude, we had to do it faster than by going through the development of our own products,'' Muzquiz said.
According to both Cuprum and Nicholas, the partnership has worked extremely well so far, both as a business and as a cultural fit between two firms.
``We believe we couldn't have found a better partner. It's not only their proprietary technology, it's also their class as businessmen and gentlemen,'' Muz-quiz said.
Cuprum, with its financial stability and 25 years of experience in the plastics industry, will grow in importance in the Mexican auto industry because it is a ``strong player'' in the market, said Terry Nicholas, vice president of sales for Nicholas.
And the current economic situation has not changed the company's direction on Mexico.
``We're committed,'' Nicholas said. ``We didn't get into it with a short-term mentality.''
Nicholas expects that in the first three years of the venture the company will have invested something less than $10 million. Cuprum and Nicholas are studying a plan to establish a Monterrey compounding operation.
Not least among Cuprum's contributions has been its ability to open doors in Mexico's business community. It was also, as an established automotive supplier, well-acquainted with the level of quality and technology demanded by the industry.
``The automobile companies are becoming, by need, more selective in what they buy, but everyone is looking for local supply,'' Muzquiz said.
In Monterrey, Pl sticos Cu-prum operates eight extrusion or coextrusion lines and does vacuum forming, flocking and hydroforming. Its injection molding unit has seven presses with clamping forces of 20-250 tons. The company reported sales of $7 million last year.
Cuprum is part of Grupo Imsa, a Monterrey automotive and construction conglomerate with 1994 sales of $928 million. Imsa supplies steel, aluminum and plastic products, industrial and auto batteries, and prefabricated construction systems. The firm employs 9,800 and also is a dealer of cars and trucks.
Muzquiz does not downplay the severity of the current economic crisis in Mexico.
``It is hurting a lot of people,'' he said. ``Unemployment is very high and growing every day.''
But he is bullish on the long-term growth prospects for the joint venture: ``We're looking for more business, making more plastic parts, and maintaining our business in place.''
