Mexico City — German extrusion blow molding equipment maker Kautex Maschinenbau GmbH is stepping up its activities in Latin America.
That is despite trade restrictions in the region in recent years that have made business more difficult, according to Erick Yllescas, the Bonn, Germany-based company's sales director for Mexico and Latin America.
"Indeed, it became more difficult to import machines into Mexico. However, from project to project we have learned how to handle the situation properly," Yllescas said in response to questions from Plastics News.
"In [the rest of Latin America], the environment is even more challenging, especially in countries like Argentina and Brazil. We are working closely together with our customers and partners to comply with local regulations and finding solutions to speed up the import process."
Mexico's government of Andrés Manuel López Obrador is a declared foe of what he refers to as economic neoliberalism and in his first three years in office has gone out of his way to try to reverse the country's free-market policies of the past 40 years.
Since 2020, Mexico's plastics industry has contracted 6.4 percent, due to the pandemic and "regulatory issues," Aldimir Torres Arenas, president of the industry association Anipac, said in March, while production volumes had diminished considerably.
Nevertheless, Yllescas is optimistic about the future.
"We have good growth expectations in the region," he wrote in an email. Kautex, he added, is "investing heavily in our setup in Mexico to further improve our customers' experience when working with us.
"Within the next five years, we want to take a leading role in the region, but more importantly [we want to help] local companies take the next step when it comes to an efficient and sustainable production of plastic containers."
Yllescas sees "increased interest in [buying] highly efficient machinery in Central America, Colombia, Chile and Argentina. We feel confident that, with our new structure and approach to the market, we will increase Kautex's footprint in [Latin America]."
Kautex machinery has been sold in Mexico for more than 45 years. The company established a subsidiary, Kautex Machines Mexico SA de CV, in Mexico City in 2017. The Mexico operation is part of Kautex Americas, which, on April 1, moved from its headquarters in Branchburg, N.J., to brand-new offices and warehouse in Flemington, N.J.
With an area of around 4,000 square feet, the warehouse offers Kautex the opportunity to "optimize warehouse processes and drive forward digitalization," Kautex said in a news release. "In this way, the company will have more spare parts available directly on-site … to be able to respond to customer's inquiries even faster."
Simultaneously, Kautex Machines Mexico assumed responsibility for Latin America "and will vigorously drive the expansion of the service and sales network," Kautex said.
"Kautex will focus even more on the industrial packaging sector. Customers and partners in Latin America will now find English- and Spanish-speaking contact persons at Kautex Machines Mexico in their time zone. This facilitates access and communication, quicker response to inquiries and customers can easily visit production sites on-site," the company added.
In March, Thomas Hartkämper, CEO of Kautex Maschinenbau Group, and Chief Financial Officer Julia Keller visited the Kautex office in the German Center in Mexico City together with Admir Dobraca, CEO of Kautex Machines Inc.
Kautex Machines Mexico employs 11 people and plans to add more little by little, according to Yllescas.
"For now, Kautex Mexico operates as a hub for all sales and service activities in Latam," he said. "We are looking at expanding our staffing level further south in the near future, but we are not there yet."
He declined to reveal the value of Kautex sales in Latin America in 2021, saying only: "We delivered multiple machines into the region in 2021. Additional machines are currently in the manufacturing process with agreed shipment in 2022."
He said Mexico accounts for roughly two-thirds of Kautex's business in Latin America.
COVID-19 slowed Kautex sales across the world, including in Latin America, he said. But the home care and cleaning product segment experienced "a huge increase" in demand, as did the outdoor and sporting goods sector. "Due to a healthy balance between our target segments, our overall business is growing profitably," Yllescas said.