SAO PAULO, BRAZIL — Four years ago, Irmalos Semeraro Ltda. was a key part of several international machinery manufacturers' plans for Brazil.
Its 300 employees were assembling injection molding presses for Sandretto do Brasil Ltda. and putting together blow molding machines for Uniloy Milacron Inc.
Now, Semeraro is down to 90 employees, and much of that business is gone. Sandretto took much of its manufacturing in-house, leaving Semeraro with supplying components and preassembly work. Semeraro canceled its contract with Uniloy, citing financial problems.
But the Semeraro family is not retreating from the business. The family is an investor in a new Brazilian company, Tecnoinjet Industria e Comercio Ltda., that started making its own blow molding machines last year.
The family name has long been associated with plastics machines. Francisco Semeraro, one of the owners of Semeraro Ltda., is a former president of the Brazilian machinery industry trade group CSMAIP. He said he is a consultant to Tecnoinjet, but has no ownership stake in it.
Semeraro said the original business simply ran into financial trouble.
Sandretto took its work in-house when it built an assembly plant in Brazil, and the country's high interest rates led to a capital crunch, Semeraro said in an interview at Brasilplast in Sao Paulo. "There was not enough working capital to do this business."
So in 1999, Semeraro stopped building machines for Uniloy, four years after the partnership began, he said.
Uniloy Milacron officials said they were happy with Semeraro's work and disappointed to lose the partnership. Losing the cheaper local manufacturing is a negative, said Richard Morgan, new-business development manager for Milacron's blow molding machinery business in Batavia, Ohio.
But Uniloy Milacron has no plans to make machines in Brazil, said Michael Ferlic, managing director of Milacron Equipamentos Plasticos Ltda., the company's Sao Bernardo do Campo, Brazil, subsidiary. Brazil's tariffs and import costs are dropping, although they remain at 30 percent, and the company mainly competes against other foreign manufacturers, he said.
Semeraro said the new venture, Sao Paulo-based Tecnoinjet, employs 80 and started building machines. The company makes a total of about 45 die-casting and blow molding machines annually, but Semeraro said he is not sure how many of those are for blow molding.
The company, which also is owned by Carlos and Antonio Lopes, started as a machinery spare-parts business in 1989.
The Tecnoinjet blow molding machines were developed entirely by Tecnoinjet engineers, Semeraro said. Milacron officials said the design is different from their machines.