MEXICO CITY — Avance Industrial SA de CV, a major sales rep firm for Sumitomo (SHI) Demag Plastics Machinery GmbH, plans to open a $1 million-plus technical center in the industrialized Bajío region of west-central Mexico in 2014.
Competitors KraussMaffei Technologies GmbH, Engel Holding GmbH and Arburg GmbH + Co KG have all launched similar operations in the same area in the past three years.
Avance managing director Peter Kramer said the new facility will be used for demonstration purposes and for “training our own technical staff members and those of our customers.” The center will include a mold-testing service.
There are no plans, however, for the company to vacate its headquarters in the south of the Mexican capital. “We think it is unwise not to be in the Mexico City metropolitan area,” Kramer said.
The company also represents auxiliary equipment makers Frigel Firenze SpA, Motan-Colortronic (part of Germany's Motan Group) and Swiss company Regloplas AG, among others.
Kramer, who arrived in Mexico as a 20-year-old Hamburg, Germany-educated foreign trade graduate in 1960, established Avance Industrial with two Mexican partners in 1963. He claims the company is the oldest Demag representative agency anywhere and the most successful.
In Mexico it has sold 1,400 Demag injection molding presses, the largest of which has a clamping force of 1,500 metric tons, in addition to a total of 570 machines made by German manufacturers Stübbe (of which it sold 300) and Ankerwerk (270) prior to the purchase of their injection molding businesses by Schwaig-based Demag.
The Kramer family is now Avance Industrial's sole owner. It employs a full-time staff of 27, including Kramer's son, Alexander, a plastics engineer who has a degree from Darmstadt's University of Technology and is the company's technical director.
With a current annual turnover of between $18 million and $20 million, its sales commissions have grown at an average of between 7-10 percent a year since Mexico's recovery from an economic crisis in 1995, according to Kramer.
“We are extremely optimistic [about the future],” he told Plastics News. “I feel the same today as in those exciting early years as there are more and more new applications for plastics. Quite simply we see a fantastic future for plastics for many, many more years.”
For example, he said, Japanese auto industry suppliers such as Denso Corp., Nifco Inc and Kasai Kogyo Co Ltd. are becoming heavily involved in Mexico's already sizable yet expanding light vehicle assembly industry, attracted by new multimillion dollar investments by Japanese car makers Mazda Motor Corp., Honda Motor Co. Ltd. and Nissan Motor Co. Ltd., plus German luxury auto maker Audi AG.
Mazda, Honda, Nissan and Audi are building light vehicle assembly plants in the country, which already has 12. In the case of Mazda and Audi the facilities will be their first in Mexico. Mexico produced 1,986.579 cars and light trucks in the first eight months, 4.4 percent more than in the same period in 2012, according to auto industry association Amia (Asociación Mexicana de la Industria Automotriz AC).
High speed applications in the packaging industry offer further opportunities, said Kramer, as do the electronics and domestic appliances sectors.
“We have a technical coordinator and seven field technicians,” he added, “and we're definitely planning to increase the number of field technicians.”
The company operates a service operation in Querétaro, which is among the Bajio's largest cities. But Avance Industrial is considering a number of locations for the new center and will not necessarily choose Querétaro.
“Our biggest customer in injection molding is Procter & Gamble Gillette and they are in Irapuato,” Kramer said.
Avance Industrial has 70 machines either installed or in the process of being installed in P&G's Milenio plant in Irapuato, he added. “Most are very sophisticated and some are two-component machines. The biggest ones have a clamping force of 420 tons.”
More than 400 guests recently attended a Mexico City banquet to celebrate Avance Industrial's 50th anniversary.