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Packaging Equipment

Overview

PACKAGING GOODS STATISTICS (metal, plastics, glass, wood, cardboard)

(Production)

2009

2010

2011

(Estimated 4% growth)

2012

(Forecasted 3.5 % growth)

Estimated Total Market Size

$10,135.1

$10,795.5

$11,227.3

$ 11,620.3

Estimated Total Local Production

$9,022.0

$9,706.4

$10,094.7

$ 10,448.0

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. **(According to Mexico)

$103.0

$99.9

$103.9

$ 107.5

Imports from the U.S. **(According to the U.S.)

$119.7

$126.4

$131.5

$ 136.1

**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) http://www.amee.org.mx/envios/Anuario_2011.pdf, 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.

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. 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:

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%


Best Products/Services

The grocery retail market has the most demanding and fastest growing packaging product needs. Mexico represents the 10th most important market globally in this sub-sector at US$70.3 billion in 2011 and is forecasted to be US$96.5 billion in 2015.

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, compared to 2009. Mexico is currently the 6th 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 9th 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 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.

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.

The top 10 largest users of packaging in the world have a strong presence in Mexico:

 

The 48th and 71st largest users are fully headquartered and owned by Mexicans.

Resources

Packaging Machinery Manufacturers Institute www.pmmi.org/

Mexican Packaging Association: www.amee.org.mx

Institute of Packaging Professionals: http://iopp.org

Mexican Institute of Packaging Professionals: www.envaseyembalaje.com.mx

CIAJ www.ciaj.org.mx

Business Monitor International www.businessmonitor.com

Specialized Media

Empaque Performance E-Magazine http://empaqueperformance.com.mx

Enfasis Packaging Online www.packaging.enfasis.com

El Empaque www.elempaque.com

EnvaPack www.envapack.com

Conversion www.conversion.com

Industria Alimenticia www.industriaalimenticia.com

Revista Bebidas www.bebidaspub.com

Events

Expo Pack Mexico June 26-29, 2012 www.expopack.com.mx

Pack Expo October 28-31, 2012 www.packexpo.com

For more information on the packaging sector in Mexico, please contact:

Mr. Juan Herrera, Commercial Specialist

U.S. Commercial Service, U.S. Consulate Guadalajara

juan.herrera@trade.gov

Tel: (011-52-33) 3615-1440 ext. 103

Fax: (011-52-33) 3615 7665