Packaging Equipment

An Expert's View about Special-Purpose Machinery in Mexico

Posted on: 30 Jun 2012

In terms of equipment purchased for the packaging industry, Mexico fell two spots, from 6th to 8th, in 2010 among the world’s top markets for packaging equipment.

Packaging Equipment A Top Export Prospect for Mexico June 2012 Packaging Goods Statistics (metal, plastics, glass, wood, cardboard) 2011 2012 (Production) 2009 2010 (Estimated 4% growth) (Forecasted 3.5% growth) Estimated Total Market Size $10,135.1 $10,795.5 $11,227.3 $11,620.3 Estimated Total Local $9,022.0 $9,706.4 $10,094.7 $10,448.0 Production Total Exports $1,156.5 $1,319.5 $1,372.3 $1,420.3 Total Imports $2,269.6 $2,408.6 $2,504.9 $2,592.6 Imports from the U.S. $103.0 $99.9 $103.9 $107.5 **(According to Mexico) Imports from the U.S. $119.7 $126.4 $131.5 $136.1 **(According to the U.S.) **It is estimated the discrepancy could be caused by undervaluation of goods for customs purposes when entering the Mexican market. Figures are expressed in millions of U.S. dollars considering an exchange Rate of: $ 12.636 pesos per US$ 1. Sources: Asociacion Mexicana de envase y embalaje (AMEE), PMMI “Top Ten Markets 2010” In 2010, the packaging production industry represented 1.5% of Mexico’s national gross domestic product (GDP), 5.2% of the industrial sector GDP and 8.5% of manufacturing GDP. The latest statistics show that total Mexican packaging production reached 9.1 million tons of containers and materials for a value of US$10.1 billion, of which US$2.5 billion was imported. According to reports from the Packaging Machinery Manufacturers Institute (PMMI), referring to HS Codes 842220 and 842290, Mexico is the second largest buyer of U.S. packaging equipment, only preceded by Canada. th In terms of equipment purchased for the packaging industry, Mexico fell two spots, from 6 to th 8 , in 2010 among the world’s top markets for packaging equipment. Imports of packaging equipment dropped 3% to equal US$478 million in 2010. The United States remained the second largest supplier (US$ 100 million) behind Italy (US$ 144 million) and closely followed by Germany (US$ 95 million), which increased sales by 5% from the previous year. In 2011, Mexico’s market turned around and the country increased its imports of packaging equipment by at least 4%. The Mexican packaging products market is very dynamic. According to AMEE, the breakdown in sub-sectors in 2010 is as follows: Top US port 2 Ex Prospects in Mexico 2012: Packaging Equipment The cardboard and paper packaging sector represented 37.03 % of total sales in the industry. Sales value increased 17% compared to 2009. The plastic packaging sector (bags, films, boxes, bottles, containers) represented 25.14% of all sales in the industry. It increased sales by 2.7%. The metal packaging sector holds 20.62% of the industry grew 7.1%. The glass-packaging sector represented 16.77% of all sales in the industry and is expected to become a fast-growing sub-sector in Mexico. Sales value grew by 0.8%. This was one of the most prosperous sub sectors, especially considering that Mexico is the world’s third largest beer producer and second largest soda consumer. The beer sector alone reported an increase by 5.3%, producing 3,704 million of bottles in 2010. Wood packaging sector represents 0.45% of all sales in the industry, and is the only sub- sector in which local production is decreasing because of a shortage of wood. Nonetheless, imports of wooden products, mostly pallets, increased by 72.89% Mexico’s National Packaging Products Production by Sector 2001-2010 T o n Wood Metal Cardboard and Paper Plastic Glass Source: AMEE with data collected from its members, CANAFEM, CNICIP and SHyCP Food processing accounts for 19% of Mexico’s manufacturing GDP and also for 40% of sales in the packaging industry, making the food processing sector the biggest buyer of the packaging industry. The food processing sector demonstrated an average growth rate of 3.2% in 2010, th compared to 2009. Mexico is currently the 6 largest soft beverage market in the world with estimated annual sales of US$11,501.7 billion in 2011 and a forecast of US$15,972.1 going forward to 2015. The pharmaceutical market is also one of the major correlated industries, considered as the th 9 largest one in the world and leader for Latin America; it represents almost 10% of the total packaging materials demand. And one of the largest buyer industries for packaging equipment, with an annual average growth rate of 7% in the last three years. Some of the Top US xport ent 3 E Prospects in Mexico 2012: Packaging Equipm international companies that have operations in Mexico are: Roche, Pfizer, Glaxo Smith Kline, Novartis, Schering Plough, Eli Lilly y Johnson and Johnson. Cosmetics and Personal Care Products is the third most relevant sector /client for the packaging industry, with 10% of the overall demand for packaging equipment. Back to top Opportunities Mexico is striving to provide higher and higher quality in the packaging sector. The glass packaging industry has become the main focus for many companies because of its competitive prices as compared to plastic containers and its environmentally friendly manufacturing process. Companies involved in food processing or even agribusiness (Tyson, BACHOCO, Driscolls, Sunny Ridge, etc) are demanding more and better packaging products, in most cases to help extend the shelf life of their products or to fulfill the marketing trends or requirements from major retailers such as Wal Mart. With this trend in the packaging sector, machinery is more in demand. However, the United States has lost some of its market share to Mexico’s first-ranked supplier Italy and now its closest competitor Germany. When asked why a Mexican company would prefer a European supplier (farther than the United States and pricier in Euros), some executives told FCS that it was because of flexibility in terms of adapting equipment to local needs, better after-sales service from centers located in Mexico, and availability of financing options. U.S. firms should keep these critical points in mind while continuing to take advantage of the American reputation for having the newest technologies, being located at a convenient distance, extensive trade relationship and NAFTA preferences. Despite Mexico’s depreciation of the peso (hit a two year low in November 2011 against US dollar and Euro), over 85% of all new packaging equipment is imported, which represents an enormous opportunity for U.S. firms. Top US pects kaging Equ 4 Export Pros in Mexico 2012: Pac ipment The top 10 largest users of packaging in the world have a strong presence in Mexico: Annual Revenues Company Country Sector 2010 (US$ Billions) 1 Nestlé 105,267 Switzerland Food 2 Procter & Gamble 79,689 United States Personal & Household Products 3 Pfizer 57,809 United States Pharmaceutical 4 Johnson & Johnson 61,587 United States Pharmaceutical 5 Unilever 58,623 UK/Netherlands Pharmaceutical 6 PepsiCo 57,838 United States Beverages 7 Novartis 51,561 Switzerland Pharmaceutical 8 Kraft Foods 49,542 United States Food 9 Roche Group 47,171 Switzerland Pharmaceutical 10 Bayer 46,473 Germany Pharmaceutical th st The 48 and 71 largest users are fully headquartered and owned by Mexicans. 48 FEMSA 13,705 Mexico Beverages 71 Grupo Bimbo 9,600 Mexico Food Resources • Packaging Machinery Manufacturers Institute: • Mexican Packaging Association: • Institute of Packaging Professionals: • Mexican Institute of Packaging Professionals: • CIAJ: • Business Monitor International: Specialized Media • Empaque Performance E-Magazine: • Enfasis Packaging Online: • El Empaque: • EnvaPack: • Conversion: • Industria Alimenticia: • Revista Bebidas: Events • Expo Pack Mexico, June 26-29, 2012: • Pack Expo, October 28-31, 2012: Top US ects ging Equ 5 Export Prosp in Mexico 2012: Packa ipment For More Information Please contact Juan Herrera, Commercial Specialist for packaging equipment at the U.S. Commercial Service in Mexico at or (011-52-33) 3615-1140 ext. 103. You can also visit our website at The U.S. Commercial Service — Your Global Business Partner With its network of offices across the United States and in more than 70 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting Disclaimer: The information provided in this report is intended to be of assistance to U.S. exporters. While we make every effort to ensure its accuracy, neither the United States government nor any of its employees make any representation as to the accuracy or completeness of information in this or any other United States government document. Readers are advised to independently verify any information prior to reliance thereon. The information provided in this report does not constitute legal advice. The Commercial Service reference to or inclusion of material by a non-U.S. Government entity in this document is for informational purposes only and does not constitute an endorsement by the Commercial Service of the entity, its materials, or its products or services International copyright, U.S. Department of Commerce, 2012. All rights reserved outside of the United States.
Posted: 30 June 2012

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