Mexico City — KraussMaffei de México S de RL de CV wants to grow its packaging business, as the machinery maker prepares for billowing "dark clouds" in the forecast for automotive.
"We see some dark clouds in the automotive industry this year," Klaus Jell, general director of the Mexican subsidiary in Querétaro, said in an interview at Plastimagen, April 2-5 in Mexico City.
"We expect that also due to the political circumstances that the market, especially in automotive, will have a correction," he said. "So we need to penetrate more in other industries."
Automotive still remains the company's strongest market in Mexico, but it's a mature market. Packaging — and food packaging, specifically — has more growth potential.
"Packaging has big, big potential," Jell said.
At Plastimagen, KraussMaffei de México had two injection molding machines running packaging applications: a 500-metric-ton GX series press molding avocado crates, and a 420-tonne Netstal Elion press demonstrating the brand's technology for thin-wall packaging and fast cycle times.
Those dark clouds, however, are full of uncertainties ranging from North American trade issues to recent threats from U.S. President Donald Trump to shut down the U.S.-Mexico border. While talks and tweets of a border shutdown may have simmered for now, Jell considered the vast impact it could have on automotive for both neighboring countries.
"All of the automotive industry would have to shut down in a short [amount] of time" he said, citing an absence of crucial auto parts that are made in Mexico.
"And vice versa: Mexico, of course, is very dependent on trade with the United States," Jell added.
A global automotive slowdown as well as the current political environment in Mexico under President Andrés Manuel López Obrador are also hovering high.
Early decisions by López Obrador, including the one to scrap the $13 billion project for a new airport, "are not supporting certainty," Jell said.
"He's doing everything to undermine certainty," he said. "And if you don't have certainty, nobody is really in a likelihood to invest."
Mexico is the fourth biggest market for parent company KraussMaffei Group GmbH. The Munich-based company is listed on the Shanghai Stock Exchange and owned by China National Chemical Corp.