Mexico City — Taiwanese extrusion equipment specialist Fong Kee International Machinery Co. Ltd. is returning to the Mexican market after more than a decade away, exhibiting at both Plastimagen and another local show this year to try to carve out a niche.
The Tainan, Taiwan-based company said the United States has been one of its top export destinations for the last two years and it sees potential opportunities next door in Mexico.
It's also beefed up its Spanish-language technical service staff for the exploratory push, said Executive Director Susan Wei.
"Generally, Mexico is showing good potential," she said, admitting that it's not a short-term foray for Fong Kee, "Always we are working long term.
"Frankly speaking, this is something we need to do step by step," she said. "We come to these two shows, one in Guadalajara [Expo Plastico in April] and this Plastimagen.
"We want to see what is the response from the market because our machine is not cheap," she said. "Today, there is high competition from India, from China and from local suppliers."
The company, which launched an all-electric blow molding machine last year and has developed new technology in extrusion lamination in flexible packaging, sees a niche providing higher-quality machinery that's cheaper than equipment from Europe or other well-developed manufacturing centers, she said.
"For those customers who used to take European machines, it will be much easier to take our machines instead," she said.
Still, the focus on going up market is meeting with more resistance on pricing this year, she said.
The company is expecting sales to drop about 15 percent this year, after two strong years, because of softness in some of its export markets, particularly Brazil and Argentina, and continued weak demand from manufacturers in the Middle East, Wei said.
The company, which has about 180 employees, had about US$32 million in sales last year, she said.
Customers have become more price sensitive this year, and Fong Kee has left some orders on the table when customers wanted too much of a price reduction, she said.
Wei said the company also plans to introduce new, larger-tonnage versions of its all-electric blow molding machines next year and make other technology upgrades.
She said the push into Mexico has also been helped by hiring a native Spanish-speaking sales engineer in its Taiwan office, who is also fluent in Chinese and English, to overcome some language barriers in providing good service for customers in Latin and Central America.
That was a barrier in a previous sales push into the region 15 years ago, she said.
While it's too early to say, she said her time at the show has convinced her the company needs to move ahead.
"I was here 15 years back; at that time I did not get the right local agent and local contacts, so we didn't continue," she said, speaking in the company's Plastimagen booth. "But I can see we can do something for this market."