Because they sell direct to domestic Mexican manufacturers, used machine suppliers feel the pulse of the smaller and mid-sized Mexican processors. Right now there is no pulse. For decades, Mexico has been an important market for U.S.-based used machinery dealers.
``For most of the companies that we've dealt with in the past, it's worse, not better. In fact, I have companies in Mexico that want us to sell their machines,'' said Keith Nelson, founder of Tropics Machinery and Equipment Sales Inc. in Hialeah, Fla.
The Mexican economy has claimed one victim: used machinery dealer West Suburban Services Inc. of Aurora, Ill., which closed its Mexico City sales office after eight years. Business had been slow for the past several years, but things were looking up last November with $300,000 worth of orders for a blow molding machine and a 500-ton injection press, said Javier Perez of West Suburban.
Then the peso devaluation hit. West Suburban gave credit to several solid small companies but found they were unable to pay, Perez said. But West Suburban remains an exporter; 95 percent of its business is exports.
``We're going to try harder in Central and South America,'' said Perez.
Mexico had problems even before the peso crash, Nelson said.
``There was more to it than just that,'' he said. ``It also was the fact that Mexico, for the past year, had already slowed down on used equipment and that was because of extremely high interest rates at the bank.''
As of mid-April, Tropics Machinery had made just one 1995 sale to Mexico, Nelson said.
Don Poston, a 15-year veteran of used machine sales in Latin America, thinks this down period could last two years. Recovery from Mexico's last major currency crisis, in 1982, took about 12-16 months.
``I don't see it picking up in the short term. Most people in Mexico cannot afford to borrow money with interest rates that are being charged right now,'' he said.
International Plastics Machinery Inc. in Miami sells extruders, mostly twin-screw extruders. President Walter Sula said the company has recorded no major sales to Mexico since the peso's fall.
``Everybody's holding his wallet,'' Sula said.
Still, Sula said, some larger companies may opt for new machines, rather than used. And he said business is strong in several South American countries, including Peru, Chile and Ecuador.