SÃO PAULO — Brazilian injection molding machinery group Indústrias Romi S.A. is focused on export growth amid an economic slowdown in Brazil this year that's suffocating demand in the plastics sector, according to the company's director for plastics processing machinery.
Based in Santa Bárbara d'Oeste, about 80 miles from São Paulo, the 85-year-old company wants its international sales to account for about 30 percent of its total sales by the end of this year, in comparison to roughly 20 percent now, director William dos Reis said at Feiplastic 2015, held May 4-8 in São Paulo.
“The Brazilian market is going through a crisis of confidence,” he said. “Everybody is waiting to see what is going to happen and the new projects are stopped.”
Romi's net sales for its plastics processing machinery unit fell 13.2 percent in the first quarter of 2015 from the same period a year ago, to 24.1 million Brazilian reals ($7.4 million), due to lower industrial demand in Brazil.
New order volume for the unit was down 22.8 percent from the first quarter of 2014.
Romi's plastics machinery unit accounted for about 20 percent of the company's net sales in the first quarter, compared to its machine tools business with 57 percent.
In its earnings statement for the quarter, the company noted one potential bright spot: that Brazil's falling currency — down 30 percent against the U.S. dollar in the last year — could make Brazilian manufacturers more competitive in exports and against imported machinery.
It also noted that Brazilian automobile production fell 16 percent in the first quarter, and that one measure of business sentiment, the Industrial Entrepreneur Confidence Index, in March was at its lowest level since the 2008 economic crisis.
The manufacturer has 11 factories, with nine in Brazil and two in Germany, and subsidiaries in Mexico, the United States, the United Kingdom, France and Spain.
Representation in Mexico was established just last year, and Romi wants to expand its presence there because Mexico's plastics injection market is as big as Brazil's, Reis said.
The company's next global expansion step may be establishing a commercial presence for plastics machinery in the United States, where Romi already has subsidiary Romi Machine Tools Ltd., in Erlanger, Ky., managing sales for its machinery and tools unit.
“In three or four years we could have representation there, but first we have to consolidate our presence in other markets [where the company is already active],” Reis said.