MEXICO CITY - Mexico's economic crisis has driven a debt-saddled film extruder and bag converter to seek foreign capital investment to expand and meet recovering market demand. Plastinor de Torre¢n SA de CV, based in Torre¢n, Mexico, is keen to find a company interested in an equity share in the company or, failing that, to acquire complete control, according to Chief Executive Officer Rafael del Castillo de la Rosa.
Although this year has seen some improvement in market demand, both in Mexico and across the border, the firm is unable to expand bag output due to its severe lack of cash flow.
Plastinor has a capacity to extrude 265,000 pounds per month, and produces a range of plain and printed polyethylene, polypropylene and laminated bags.
The firm operates seven extrusion machines, and has nine bag-making lines and three printing presses. Plastinor also has a Jandi pelletizer and can recycle as much as 90 percent of its waste material.
Most of the firm's output is aimed at the Mexican market. But Plastinor also exports 20 percent of its production of film to the United States via El Paso, Texas, converter Dino Poly Bags, a Plastinor joint venture with NGR Enterprises Inc.
Plastinor, which was formed in 1980 under a different name but took its present name six years ago, has offices and a warehouse in nearby Chihuahua, Mexico.
Plastinor has a computer-aided design section and is equipped with computer control and information systems covering such areas as accounting, payroll, ordering, invoicing and production, del Castillo said.
In the first half of 1995, Plastinor's business suffered badly from the Mexican economic crisis and sales were poor.
Sales for the year reached US$1.8 million, according to del Castillo, while 1996 projections show a likely figure of around US$2 million.
The firm remains profitable. Gross profit in 1996's first six months was about US$330,000. But, del Castillo said, this could improve substantially given the necessary extra investment.
Plastinor employs about 80.
A major part of the firm's financial problem has resulted from the need to pay cash for raw materials, while its customers pay on credit, del Castillo said.
Plastinor has built up debts amounting to US$800,000, much of it owed to banks in U.S. dollars, del Castillo said. Sky-high Mexican bank interest rates have left it unable to find cash to invest in meeting growing demand.
``We have decided that the most convenient way towards restructuring the company is an association with investors,'' he said. ``That will allow us to eliminate the bank debt, count on sufficient working capital and invest relatively little in key machinery and other equipment needed.''
The immediate aim, he said, is to raise output to about 330,000 pounds per month.