Brazilian plastics machinery market offers opportunity for domestic firms, imports

Wilson Carnevalli, president of the plastics sector of the Brazilian Assn. of Industrial Machinery and Equipment (ABIMAQ; São Paulo) and founder of the extrusion equipment supplier of the same name, told PlasticsToday that strong domestic demand is helping Brazilian machinery manufacturers overcome limited export opportunities. "The internal market is so good that exports are not the focus right now," Carnevalli said. Overall, Carnevalli said the sector is performing in 2010 like it did in 2008, which was a very good year. Bucking the wider trend in 2009, Carnevalli said that last year was the best in his company's 48 year history.

Carnevalli's firm, which supplies blown-film lines, flexographic printers, and machine direction orientation (MDO) technologies, among others, averages the production of around 140 extrusion lines per year at this point in time, down from a recent high of 180. As recently as two years ago, Carnevalli said his company would export 50% of its production. The onset of the global recession, and a stronger Real, has greatly reduced that figure, however.

Recently ABIMAQ and the Brazilian government negotiated for a reduction in the interest rate from 9% to 4%, reducing company's financing costs, with a 5.5% rate locked in for machine financing. That particular arrangement is set to expire shortly, but the local plastics industry is pushing to extend it.

In 2010, ABIMAQ projects that approximately 3000 injection molding machines will be purchased in Brazil. Of those 3000, around 2000 will be imported, with the four to six major producers in Brazil accounting for around 80% of the remaining 1000 machines that will be bought. The association is forecasting that around 350-400 blown-film lines will be purchased, with roughly 38/month delivered in other extrusion technologies like pipe, wire, and sheet. Altogether, ABMIAQ has about 1400 members in 33 different sectors of the economy, with about 90 of those related to plastics. In May 2010, the plastics-related segment was the strongest in all of ABIMAQ.

According to ABIMAQ figures, imports of plastics machinery through the first four months of 2010 totaled $142.57 million, up 5.2% from the $135.53 million tallied over the same time period in 2009. For all industrial equipment over the same time frame, imports rose by 4.2%. In terms of all capital equipment imports, the U.S. leads the way, followed in order by Germany, China, Japan, and Italy. At this point in time, China only represents 12.15% of the total, compared to 25.36% for the U.S. and 12.66% for Germany, but its share from the first four months of 2009 compared to the first four of 2010 is up 51.2%, while the U.S. (-5.8%) and Germany (-5.1%) saw their share decrease.

At the recently completed International Fair of Packaging and Processing for the Food and Beverage Industry (FISPAL; São Paulo, Brazil; June 8-11), a large delegation of Chinese companies had joined together to form a Chinese pavilion. PlasticsToday spoke with one importer of Chinese machinery, Máquinas (São Paulo) who said his company had been selling small-to-medium size Chinese-built injection molding machines into the Brazilian market for about three years. To date, the company had delivered around 150, and he noted that there are roughly 20 to 30 Chinese suppliers of injection machines attempting to enter the market. New at the booth for this company was a Chinese-made extrusion blowmolding machine, which the company will now attempt to import into Brazil. —Tony Deligio