Brazilian bottle blowmolding market boasts strong growth

São Paulo—Propelled by carbonated soft drinks (CSD), health drinks, and most recently aseptically filled products like milk beverages, Brazil’s polyethylene terephthalate (PET) stretch blowmolding market is heating up, fueled by income gains for large segments of the fifth-most populous nation in the world that are making things like bottled water and soda newly accessible to everyday Brazilians. At the 26^th International Fair of Packaging and Processing for the Food and Beverage Industry (FISPAL; São Paulo, Brazil; June 8-11) held at the Anhembi Convention Center, PET stretch blowmolding machinery suppliers Sidel, Krones, and KHS Corpoplast described Brazil as a strong growth market that looks to be getting stronger.

Sidel, which had the Combi line it launched at Drinktec last year in its booth, became the market share leader in Brazil last year, according to Antonio Bebiano, general director for Sidel in Latin America. Bebiano is based in São Paulo, where the company has operated a machinery production plant since 1989. That plant, which was hosting tours during the show, has 160 employees and a network of about 300 suppliers making parts. It’s totally focused on Brazil, with Sidel’s Guadalajara, Mexico site serving the rest of Latin America. From 2007 to 2010, Bebiano said Sidel’s sales had doubled in Brazil, with particularly strong, if unsustainable, growth thus far in 2010. “After the economic crisis,” Bebiano told PlasticsToday, “people postponed purchases, but now the government has given incentives.” Sidel expects good business in 2011, but not as strong as the current year.

Part of that growth is driven by a growing middle class in the country. In addition to more people enjoying health drinks over the last four years, Bebiano said the country saw more than 4 million families move into the CSD market who couldn’t afford it before. Like many segments within plastics in Brazil, the PET bottle sector is highly fragmented, with no supplier to the market’s colossus, Coca-Cola, holding better than a 10% share.

Sidel competitor Krones has sold into the Brazilian market since 2001, with around 50 machines currently installed, according to Silvio Rotta, commercial director Krones do Brasil Ltda. (Diadema). The company produces conveyors and some labeling equipment at its plant in Sao Paulo state, with around 300 employees. Including new machines and parts, Rotta said Brazil now represents 50% of all of Krones’s sales in Latin America, with growth of around 10%/yr since 2007. Through the first six months of 2010, the company had already matched all of 2009’s revenue, and since 2007, the company has doubled the number of employees it has at its local plant.

In addition to CSD, Krones has seen growth in demand for edible oil containers, with lightweighting as important to the local market as it is elsewhere in the world. In Brazil, Coke’s 2-liter bottle preform is now at around 48g, compared to 52g in the past. Once the company moves to a shorter finish for the cap, the weight will drop to around 46g, with other companies coming in around 44g or even 42g. Going forward, Rotta anticipates strong growth for aseptic filling in the country. Krones sold what it says is the first aseptic filling line last year, with installation last September, followed by three months of validation and full-scale commercial production at the start of 2010. Installed for Nestle, the line is for chocolate milk with the bottles sporting a shrink sleeve.

Speaking to PlasticsToday at the company’s booth, Rotta said, “I think at the moment, the Brazilian people are looking for technology like this here,” Rotta explained, holding aloft the Nestle container, and adding that Brazilian companies are not balking at the premium they must pay for top-of-the-line technology.

KHS, which has had the longest presence in Brazil, going back 60 years, has two manufacturing plants in the country, with sites in São Paulo and Jundiaí. The latter site, which is a former SIG Corpoplast operation acquired in 2007, is about one hour from the city of São Paulo and located within the state of the same name. Angela Souza, assistant to the regional director, said the company manufactures fillers, stretch blowmold, packing, and palletizing equipment in Brazil. Souza said the market is currently very active with large orders being booked. At the show the company emphasized its parts and service unit, highlighting the training of technicians and boasting that for the market, it has the largest engineering department in Brazil.