Mauser AG's recession-turnaround plan for 2010 includes giving its customers new alternatives for price adjustments.
The Bruhl, Germany-based maker of plastic and steel industrial drums and intermediate bulk containers recently hired international market consultancy Simon-Kucher & Partners, of Bonn, Germany, to help the firm and its customers react better to raw materials price fluctuations.
The result is a two-pronged strategy that includes computer software for allowing Mauser's customers to account automatically for high density polyethylene pricing changes rather than manually adjusting them on a monthly basis; as well as a debit/credit system that pegs prices to the current index for six months, with monthly resin cost changes settled quarterly through an invoice or credit note.
Due to modified production capacities of manufacturers and the present economic situation, raw material prices are still highly volatile. The two alternative models can therefore result in immediate improvement, Mauser Corp. CEO Ron Litchkowski said in a Jan. 15 news release. Mauser Corp. is the German firm's Bridgewater, N.J.-based North American subsidiary.
Since being acquired in 2007 by investment firm Dubai International Capital LLC of Dubai, United Arab Emirates, Mauser has consolidated its North American manufacturing footprint while aggressively expanding its global operations, which employ about 4,000, said Christopher Lind, technology and regulatory affairs director in Bridgewater.
The new pricing mechanisms are a high-tech approach to coping with a still-recovering global economy, he said.
A lot of our competitors do what we do now when the price goes up, you run out to your customers and you raise their prices. The price goes down, you lower their prices. It's very inefficient to have all these plastic packaging salesman running around all over the place, Lind said Jan. 18 by phone.
In addition, many Mauser customers have downsized their engineering departments, leaving packaging decisions in the hands of procurement people, he said.
[Computer-aided pricing] frees up the less-experienced procurement person. The time and effort they don't spend on drum and IBC price fluctuation, they can spend really getting down to the nuts and bolts of other parts of their operation, he said.
Mauser Corp. operates drum and IBC plants in Addison, Ill.; Mount Vernon, Ohio; Charlotte, N.C.; Anniston, Ala.; East Brunswick, N.J.; Rancho Cucamonga, Calif.; and Houston and Conroe, Texas.
According to Lind, Mauser AG's 2009 sales were 1 billion euros ($1.4 billion), and Mauser Corp.'s business racked up about $330 million in sales. That compares with 2008 sales of 1 billion euros globally and $508 million in North America, according to the corporate Web site.
Lind said Mauser does not expect to see 2008 numbers again any time soon and neither should its competitors.
Everybody's down substantially, because the users of packaging, especially plastic packaging, are down. Those of us who have a good strong foot in the food industry, that's actually trickled up a little bit. People may not be going to the five-star restaurants, but they're going to the fast-foot restaurants those are the ones that buy the 55-gallon drums of tomato paste, he said.
Food service, pharmaceuticals, and agricultural chemicals will be strong industrial packaging markets in 2010, Lind said, and Mauser is poised to take advantage: The company has expanded the number of Mauser do Brasil Embalagens Industriais SA-operated plastics plants in Brazil to three, and has joint ventures and licensing agreements with IBC and drum manufacturers in China (Fanshun Mauser Shanghai Packaging Co. Ltd. of Shanghai), India (Time Mauser Industries Private Ltd. of Mumbai) and Thailand (Pack Delta Public Co. Ltd. of Bangkok).
We're still the largest plastic drum manufacturer in the U.S., as well as the world. We're No. 2 globally in IBCs, Lind said.
He said another area of pride for Mauser is its National Container Group LLC subsidiary in Willowbrook, Ill., which since 1988 has collected and reconditioned industrial containers.
We remanufacture, recondition, recycle, watch whatever level of activity we need, Lind said.
IBCs and drums that don't make it back into the marketplace from NCG are reground into post-consumer pellets that are used to mold new drums and non-contract parts for IBCs such as feet, label plates and corner protectors he said.
As it is for many firms looking to recover from 2009's marketplace sluggishness in 2010, Mauser's byword is innovation, Lind said: We're looking to develop things like IBCs and drums that are plastic, but conductive and with barrier layers for solvents.
Mauser also is eyeing the future, as new U.S. regulations on food safety, specialty agricultural chemicals and diesel fuel come into play in the coming decade.
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