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October 09, 1995 02:00 AM

MEXICAN PACKAGING CONVERTERS TAKING AIM AT EXPORT MARKETS

Richard Higgs
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    Flexible plastics packaging converters in northeastern Mexico are successfully entering the export business thanks to attention to quality and the favorable dollar/peso exchange rate. But, in most cases, the Mexican companies are forced to sell their products abroad because of a growing need to find U.S. dollars to pay imported raw material and equipment costs.

    Nevertheless, some companies in the Monterrey area are now equipped to coextrude, laminate and print to suit the demands of foreign customers.

    One Monterrey firm with big export ideas is Empaques Flexibles SA de CV. Its laminated, printed polypropylene film won approval last month from several potential food packaging clients in South Texas, according to owner Ra£l Maldonado.

    Now he expects by November to start shipping film in roll form - initially printed, two-layer biaxially oriented PP laminate - to U.S. firms packaging food such as cookies and snacks.

    While the Mexican firm only expects to sell around 5 percent of its product abroad this year, Empaques Flexibles is aiming to export as much as 30 percent of its annual sales during 1996.

    Despite Mexico's lingering economic crisis and lost national sales, the company expects to reach total sales this year of US$10 million against just US$4 million in 1994.

    ``We spent some time trying to sell in the U.S., visiting different companies and now we're ready to export,'' said Maldonado, whose firm is part of the family-run Grupo MG SA de CV.

    ``We're now competitive. Our prices are good, our quality is the same or better than what the companies get from U.S. suppliers,'' he added.

    To meet foreign demands Maldonado invested US$750,000 last year in a new ``solventless'' laminator, bought through equip-ment representative Interplast of Mexico City.

    ``It was to improve quality. Now we have won approval for some of the largest food companies in the U.S. They want inks and laminates used without solvents,'' Maldonado said.

    Another flexible packaging producer already making its mark in exporting is Recubrimentos y Laminaciones de Papel SA de CV (Relapasa) of San Nicolas de los Garza.

    The integrated film extruder, laminator and printer specializes in laminated and printed film for the disposable diaper and sanitary towel industry. It has already achieved a high degree of international acceptance since it has been supplying Kimberly-Clark de Mexico SA, said export manager Antonio Zarate.

    The hunt for U.S. dollars to pay for imports was the drivingforce in Relapasa's switch in March to attracting export business. It is now serving several diaper makers in the United States and plans to ship polyethylene film to clients in Central and South America before the year is out. Relapasa expects to sell its products to firms in El Salvador, Costa Rica and Colombia. Clients there include companies making personal hygiene products for the multinationals Kimberly-Clark and Scott Paper.

    Zarate acknowledged that competition, often from foreign converters, is growing rapidly in Mexico's depressed domestic market and local producers are being forced to look abroad for new business. This year Relapasa expects to record sales worth US$20 million.

    He said the national converted flexible packaging market has shrunk by as much as 35 percent due to Mexico's economic crisis. And new competition has taken its toll, hitting Relapasa's profits as margins have tightened.

    Relapasa operates three extrusion lines and is capable of coextruding three- to five-layer film. It also has laminating facilities and four flexoprinting lines. It uses film combinations of PE, ethylene vinyl acetate, ethylene vinyl alcohol, PP and nylon, according to the firm's technical manager, Jorge Perez.

    The company is currently coextruding three-layer grease-resistant low density PE film for packaging lard.

    This year Zarate forecasts exports to the United States will reach around 154,322 pounds per month while just 88,184 pounds will go to Central American countries and about 110,230 pounds to Colombia.

    To meet the needs of a growing international market, Relapasa is now seriously considering purchasing a new blown film extruder, Zarate said. It has been looking at acquiring Egan equipment or machinery from Italy. Zarate expects that half the new capacity will be devoted to supplying film for the growing export market and the balance may be for stretch film production.

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