SÃO PAULO, BRAZIL — Brazilian plastics factories run machines that average 10 years old, making the market ripe for new equipment, according to a top trade association official.
``On the short-term view, there is a big potential for replacement machines,'' said Daniel Ebel, president of DNMAIP, the national department of machines and accessories for the plastics industry in Brazil. DNMAIP believes about 45,000 pieces of primary and auxiliary equipment are operating in the country.
Although imports are growing, Brazilian-made machines still account for about 70 percent of the new-machine market, he said.
But the definition of ``Brazilian machine'' is changing quickly. Brazil's machine makers are taking advantage of lower import tariffs — part of the economic reforms begun in 1990 — to buy quality, low-cost components from around the world. They have more choices than ever.
Parts sourcing may not be as dazzling as joint ventures, such as SÃo Paulo's IrmÃos Semeraro Ltda., which builds blow molding machines for Johnson Controls Inc. and injection presses for Sandretto Industrie. But the impact is more sweeping, Ebel said.
``I think that's been the biggest single change in the last four years. Just an example: We use a lot of pneumatics, and in the last three years, pneumatics [now] cost 50 percent less, due to international competition. So we can sell our equipment about 25 percent less than three years ago.''
Interviewed at Brasilplast '97, Ebel said: ``In the past, I think we were the only country that you could find 100 percent Brazilian, a 100 percent local machine. That meant that everything in the machine — every screw, everything — was made in Brazil, because it was totally closed. Now, if you buy a German or a U.S. machine, you might have a Japanese motor or controller.''
But to be more competitive, machine makers have begun using imported parts, he said.
According to DNMAIP, there are about 1,300-1,400 injection presses, 300 blow molding machines and 400 extruders sold each year in Brazil. Roughly 11 Brazilian injection press makers, 10-12 blow molding machine builders and 15 extruder suppliers serve that market.
Ebel is president of Plast-Equip Ind£stria de M quinas e Acess¢rios Ltda. in Diadema, which makes auxiliary machines, both its own line and equipment for Germany's Motan GmbH. It also represents auxiliary suppliers, including Sterling Inc.
South America is heavily influenced by European machinery, especially from Germany and, more recently, Italy. U.S. companies are coming to the table relatively late — but Ebel thinks South American manufacturing is more similar to the United States and Canada than to Europe.
``I really feel at home at U.S. plants. In Europe, it's a different way to produce. So my opinion is, we need to be closer and closer to the states than to Europe, for us to be a better fit in the future,'' he said.
``Now if you buy a German or U.S. machine, you might have a Japanese motor or controller. What we are doing here is exactly the same. To be more and more competitive, you need to have the chance to import parts.''
Ebel added that he believes Brazil eventually will turn around its trade deficit with the United States. He also expects the country to benefit from Mercosur, the Latin American free trade pact, selling about 20 percent of its industrial output to Argentina by 2000.
``The future for us is to be open for everybody, but to attack the other markets too. That's a question of time. We are not prepared to do it now.''