Markets to be explored - Messico

The Mexican market for packaging machinery and packaging is highly dynamic, Italian technology is popular with Mexican businesses and large multinationals present in the country with direct foreign investment, aimed at serving the domestic and the north American markets.

The areas of greatest interest for Italian companies operating in the sector are food and beverages, followed by applications for the pharmaceutical sector and hygiene products.
The market is evolving continuously, to meet changing lifestyles of Mexicans, to respond the standards introduced by the national-international regulations to safeguard public health and the environment and due to the protagonism of some Mexican international industrial groups.
 
Trends, consumption and investments
Mexico is a major beer (the third world market) and carbonated beverage (world leader in per capita consumption) consumer.
According to experts, the high consumption of carbonated beverages and modest physical activity of the Mexicans, particularly in large urban centers, has led to the expansion of type 2 diabetes and the country’s international record for childhood obesity.

However, the increased awareness of the need to lead healthier lifestyles is generating a growing demand for new product lines based on fruit, vegetables, liquid yogurts, water, frozen foods.
The strong population growth and rising disposable income also act as a further boost to demand for consumer goods and their relative packaging and wrapping needs.
Since 2000 the Mexican packaging market has registered a solid growth phase and the expectations for the next five years remain positive, particularly in relation to applications of flexible packaging, cardboard containers, rigid plastic containers, plastic multilayer film.
In the absence of a significant domestic production, machinery is imported from leading countries in the sector.

The global economic slowdown of 2007-2008 has had a major impact on the capex investments of Mexican firms; but when the world economy, and particularly the US, showed the first signs of recovery, many projects of the big groups, hitherto frozen, were given the go-ahead.
Distributors and resellers of  packaging and bottling equipment agree that during 2011 and early 2012, a strong recovery in demand was seen on the Mexican market. In some cases distributors doubled sales compared to those recorded during the same period of 2008-2009.

The large Mexican food processing groups (Bimbo, Femsa, Gruma, Herdez, la Moderna, Lala, Alpura, Bachoco, la Costeña, Sigma Alimentos, Grupo Modelo, Cerveceria Cuatuthémoc Monteczuma) as well as those of the pharmaceutical industry (Pfizer, GlaxoSmithKline, Sanofi-Aventis, Bayer) and fast moving goods producers have invested growing resources in the purchase of new machines,
aiming at the continuous improvement of productivity, quality, innovation and environmental sustainability.

The increases in capex investments focused on packaging reflect the positive economic climate, the population growth, the proximity of the large U.S. market, the increasing the purchasing power of families and the middle class and the increasing demand for differentiated FMCGs.
The Mexican packaging industry registers the presence of some national (Grupo Alucaps, Bemis Flexible Packaging, Grupo Vitro, Fabricas de Monterrey) and international champions (Tetra Pak, Corporativo de Envases and Industrial Innopack controlled by Graham Packaging
Plastics Products, Grupo Smurfit Kappa),
most of whom are purchasers of Italian machinery.

Over 90% Mexican firms are SMEs. The small and medium-sized concerns have less access to credit, all the same they can benefit from international market penetration programs with an element of subsidized - deferred credit (through their distributor partners).
The absence of Italian banking group branches in Mexico does not facilitate Italian companies in the packaging and wrapping industry in shouldering mid term local commercial risk.

Mexico: recent investments  

The Mexican giant Grupo Modelo aims to increase the production of beer in the barrel for foreign markets. The program of investment in facilities located in the north of the country, in Nava, includes the purchase of a new production line with annual capacity of 500,000 hectoliters of beer in barrels of from 30-60 liters. The S.A.B. Modelo Group counts among its brands Corona Extra and Corona Light (exported in over 50 Countries), Barrilito, Estrella, León, Modelo Especial, Modelo Light, Montejo, Negra Modelo, Pacífico, Pacífico Light, Tropical Light, Victoria; it holds the important brands Budweiser, Bud light, Carlsberg, O'Doul's, Tsingtao (Source ICE, 23rd April, 2012)

Unilever wager on growth in consumption. The Anglo-Dutch giant is preparing to invest 500 million dollars in Mexico in the period 2011-15, with the creation of 1000 new jobs the plan includes the building of a new production plant and the extension of existing lines. In July 2011 Unilever opened a plant in Mexico for the production of aerosols costing 60 million euros. (Source ICE, 19th April 2012)

Nestle sells Buitoni frozen pizza on the Mexican market.  The world leader in the food industry is therefore wagering on an Italian brand to follow closely a market in strong growth (annual growth rates are at around +6-7%). According to Euromonitor, Mexico is the 13th world market for the consumption of pizza, with a total value of approximately $ 12 billion and Wal-Mart is the largest distributor of Buitoni products of the country. (Source ICE, 14th March, 2012)

Confectionery sector: Ferrero is preparing important investments in production in Mexico.  190 million dollars: This is the figure envisaged for the construction of a new plant in the state of Guanajuato. The San José Iturbide facilities will be operational by 2013 and will directly employ 500 people. The new plant will have an annual production capacity of 35,000 t and will be in a position to serve the NAFTA market and product lines with Kinder Surprise, Kinder Delice, Kinder Chocolate and Nutella.
The Italian group has been present in Mexico for 20 years and its symbolic products can rely on a distribution network present in 27 states of the Mexican confederation. In recent years the major Italian industrial groups have made significant investments in production in Mexico, with an eye to seizing the opportunities of the emerging North American market. (Source ICE, 27th February 2012).

www.ice.gov.it The organisation ICE - Agency for the promotion abroad and the internationalization of Italian companies (under interim management) - has established a close collaboration with the magazine ItaliaImballaggio. ICE‘s network of overseas offices will provide a regular update on the development of packaging in the short/medium term in given countries. Under observation, as a priority, the area of the Mediterranean rim, the Middle East and India: a focus which aims to offer points of interest to Italian companies to develop business opportunities. For further information on the sector contact [email protected].