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December 08, 2008 01:00 AM

Foreign groups push export agenda

Dan Hockensmith
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    In addition to the U.S., Canadian, German, Italian and Japanese mainstays at Pack Expo 2008, there were a smattering of firms from distant locales.

    During the trade show and conference in Chicago, companies and trade groups from China, Vietnam, India, Austria, France, Mexico, Argentina and Colombia offered visitors alternatives to the more well-known providers in the packaging industry. The Department of Commerce set up a special U.S. exports pavilion and through its trade promotion arm, the U.S. Commercial Service, brought buyers and government officials from 20 countries to Pack Expo.

    Next to the 54 Chinese exhibitors, the largest single coordinated group was from Brazil. The South American country's Export Plastic Program, a joint venture of the Brazilian government and the nonprofit Brazilian Plastic Institute that has support from Brazil's petrochemical industry, put 14 companies in one exhibition area in the east hall of Chicago's McCormick Place convention center.

    According to program officials, Brazilian exports of plastic products have tripled from $402 million in 2002 to about $1.2 billion in 2007.

    ``We have in Brazil more than 11,000 converting companies. Eighty are members of Export Plastic. Those companies [have benefited from] a strong market in Brazil. They've been preparing themselves to go abroad. One of the goals is to help them go international with intelligence,'' said Gilberto Agrello, market development specialist with the program.

    Brazil's new Atlantic petroleum fields and its emerging sugar cane-based plastics industry, as well as low labor costs, make the country attractive to North American companies seeking to serve the local market and to outsource their domestic production, he said. Brazil's status as South America's biggest country and the fact that its time zones place it only two to six hours ahead of North America aids business partnerships, Agrello said.

    ``If you think about the lead time from Brazil and the United States, it's about 20 days, in comparison with China, which is about 45 days,'' Agrello said. He said Brazilian plastics firms are interested in commodity manufacturing in Brazil; acquiring subsidiary businesses in the U.S. Canada and Mexico may come later.

    Among the exhibitors in Brazil's booth was flexibles manufacturer Union Pack Indústria de Embalagens Ltda. of Bento Gonçalves, Brazil. Bourbon Bellon, the firm's U.S. sales representative, would not give sales figures in dollars. But he said in the four years his Indianapolis-based agency has represented Union Pack, the Brazilian company has reached about halfway toward its goal of shipping 20 million pounds per year of extruded polyethylene pouches and bags and laminate films to North America through distributors in Michigan and New Jersey. Union Pack's clients are in the pet-food and lawn-care industries.

    ``In flexible packaging, today everybody is interested in cost. In the case of Union Pack, I can beat the cost of a comparable producer from Canada or the United States by 20 percent,'' Bellon said. ``The Chinese are still 20 percent below me, but I can deliver in eight weeks and the Chinese deliver in three to four months.''

    Brazil's economy has stumbled recently under the weight of the global economic crisis, which has derailed some plans for expanded plastics production. According to a Nov. 5 Reuters report, petrochemical giant Braskem SA of São Paulo posted its first quarterly loss in two years —- 849 million reais ($354 million) — and will delay investment projects as a result. In a news release, Braskem said an expansion at its Camaçari plant in northeast Brazil now will be completed in 2013, a year later than originally planned.

    Petroleum-based PE, polypropylene and PVC remain Braskem's staple products, but Latin America's largest plastics producer plans to open the world's first sugar-based polyethylene plant in 2010 in Triunfo, Brazil, with a capacity of 440 million pounds per year.

    Agrello said that while Brazil's plastic exports have declined about 1 percent this year, membership in the export program has grown by 6, for a total of 77 companies.

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