Packaging opportunities in Mexico

An Expert's View about Machinery and Robotics in Mexico

Posted on: 21 Nov 2011

An improved economic performance in the region, compounded by an increasingly sophisticated consumer and a higher purchasing power, has shaped the direction of the packaging market in Mexico, resulting in the emergence of higher quality packaging, offering convenience and visual appeal. Mexico is currently the 11th most populated country in the world and general demand is growing accordingly. Also, 75% of all finished products in Mexico require packaging; of these, 90% are in the food and drinks category

Packaging opportunities in Mexico The rapid increase in certain consumption trends in Mexico is boosting the need for dynamic and sustainable packaging. Market overview Consumer trends in Mexico are moving rapidly in terms of new products that match new worldwide life styles. The Mexican packaging market is very dynamic. The leading sectors are food processing and beverages. With its high volume population and increasing purchasing power the food sector keeps on growing steadily and its packaging needs along with it. The pharmaceutical industry and the toiletries/consumer goods industry are just behind and pushing strong for their packaging needs. An improved economic performance in the region, compounded by an increasingly sophisticated consumer and a higher purchasing power, has shaped the direction of the packaging market in Mexico, resulting in the emergence of higher quality packaging, offering convenience and visual appeal. Mexico is currently the 11th most populated country in the world and general demand is growing accordingly. Also, 75% of all finished products in Mexico require packaging; of these, 90% are in the food and drinks category In addition to a growing middle class, improving conditions among poorer consumers have fuelled strong expansion in packaging volumes, creating a major opportunity for packaging firms. According to reports from the Packaging Machinery Manufacturers Institute (PMMI), Mexico is the second largest buyer of equipment in the packaging industry, mainly from the United States. Key opportunities Packaging in Mexico offers strong opportunities for foreign companies for a number of reasons. Several multinational packaging companies have successfully entered the packaging industry in Mexico and increased segmentation among consumer goods and retailing has enabled packaging manufacturers to innovate and to expand their customer base. Due to this growth, Mexican companies have a tendency for investment in machinery and packaging equipment to meet the demands of consumers. Mexico is one of the largest buyers of packaging equipment, with an annual average growth rate of 7% over the last 3 years. The packaging machinery market is projected to have grown 6% in 2008 to a record $600 million USD. The packaging industry represents 1.8% of the GNP and 9.2% of the industrial GNP. Opportunities for the UK Manufacturers In 2007, Italy, Germany and the United States supplied 69% of total imported packaging machinery. Historically, the United States had dominated the packaging machinery market in Mexico but ?in recent years- European-made equipments are rapidly changing this paradigm. This is due mainly to the fact that European suppliers offer competitive sales conditions, and high grade equipment. There is huge opportunity for British suppliers in three main sectors: ? Machinery and high grade equipment supply or manufacture; ? Innovation in new materials; ? Recycling technologies and processes; Opportunities for British Packaging Machines British companies could benefit from their competitive advantages in equipment and machines while selling to Mexican packagers and bottlers. Their technological base coupled with a good sales plan could give them the upper hand. British manufacturers offering a high tech base and integrated lines of production have a great opportunity for expansion and revenue in this market. A hardy construction with flexible formats and competitive sales policies and/or service packages would cover the increasing demand in the market. Service packages included in the price of the machine or sold separately are also sought after benefits. It is also expected that European manufacturers expanding local assembly of packaging machinery in Mexico will be able to offer a better selling price to the local companies reducing their logistics and production costs while offering the same technological and quality standards. Establishing assembly facilities in Mexico will also provide these companies with a privileged entry point to the American and Canadian (North American Free Trade Agreement) markets. Green Processes, Materials & Environment New materials and processes which are energy and cost efficient, as well as friendlier to the environment are rapidly gaining importance; and rightly so. The savings related to an efficient recycling system are now being taken in account. Moreover products obtained from the recycling process have a high commercial value. Flexible plastics, glass, metals, cardboard and other recyclable materials are more and more valued. The recycling market was valued in 2006 around $44 million USD, but the potential value is around $700 million USD per year. One of the biggest issues in the recycling industry in Mexico is the lack of know-how in different fields such as process and design; as every plastic process requires qualified personnel. Opportunities for British companies exist wherever technical knowledge of new processes and chain-of-production systems are required, either for quality grade or for the proper application of new and innovative materials, designs and packages. Recycling and biodegradable materials also represent a great opportunity, due to the recent high interest in greener technologies in Mexico. This represents lower production cost since raw materials are no longer needed and energy costs are greatly diminished. To give an example, Mexico is recycling only 10% of total plastics production. It is estimated that in 2006 around 65 thousand tons of PET were recycled. But 675 thousand tons were left out of the process. With new recycling processes, more factories engaging in this business genre will be opened. An energy efficient and environmentally friendly production line in the process and packaging industry would ultimately reduce production costs while gaining reputation for environmental responsibility and, possibly, some taxing benefits. Mexico strives to provide excellent quality in the packaging sector. The glass packaging industry has become the main focus for companies, because of its competitive prices as compared to plastic containers, and its environmentally friendly manufacturing process. With this boom in the packaging sector, machinery is more in demand, and European products due to their high quality and technology/innovative options, can be definitely a good option for Mexican companies when acquiring new technologies. There is also a strong tendency to purchase new, but also used equipment in the sector, and 85% of the equipment is imported, which represents an enormous opportunity for UK firms. Latest export opportunities ? Mechanical, Electrical & Process Engineering Latest export opportunities ? Metals, Minerals & Materials Latest export opportunities - Mexico Getting into the market There are 4 major market players in the packaging industry in Mexico: Vitro Group; FEMSA Empaques, Tetra Pak and Copamex. These companies will be seeking to improve their production processes. More about doing business in Mexico Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ? Jonathan Clare, Trade and Investment Consul, British Consulate, Monterrey, Tel. +52 (81) 8356 5359 or email: jclare@ukconsulate.org ? Luis Dario Ochoa , Trade and Investment Officer, British Consulate, Monterrey, Tel. +52 (81) 8356 5359 or email: dochoa@ukconsulate.org ? Carlos Botello , Trade and Investment Officer, British Consulate, Monterrey, Tel. +52 (81) 8356 5359 or email: cbotello@ukconsulate.org Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events ? Mechanical, Electrical & Process Engineering Latest events ? Metals, Minerals & Materials Major Events PLAST IMAGEN 2013 http://www.plastimagen.com.mx Date: 12-15 March 2013 PACK Expo Las Vegas 2012 http://www.packexpo.com Date: 28-31 October 2012 Useful links More about OMIS and other UKTI services for exporters
Posted: 21 November 2011

See more from Machinery and Robotics in Mexico

Expert Views    
Air Conditioning and Refrigeration Overview   By U.S. Commercial Service
Oil and Gas Drilling Equipment Market   By U.S. Commercial Service
INDUSTRIAL REFRIGERATION OVERVIEW   By U.S. Commercial Service Mexico
Shale Gas Equipment   By U.S. Commercial Service Mexico
Packaging opportunities in Mexico   By UK Trade & Investment