iv. the food industry 4.1. industry trends

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IV. The Food Industry

4.1. Industry trends Argentina has 40 million inhabitants and produces food for 300 million people. In the past five years, the demand for food products increased significantly, both internally and externally. In the food and beverage sectors, the trend is to consume healthy products that are rich in nutrients and low in calories. The food industry is the largest contributor to the manufacturing industry, in terms of sales volume. In the last decade, the sector activity increased by 25%. During 2007, exports accounted for 40 million tons of goods totaling nearly USD $18 billion, which represents 32% of Argentina’s manufacturing industry exports. Argentina’s food and beverage industry employs almost 300,000 workers, which represents approximately 5% of the total employed workforce. The industry’s increased activity is closely tied to Argentina’s internally increasing consumer demand. During the first quarter of 2008, the Argentine people increased their food consumption by 5.3% 4.2. Key Players Sales by leading firms in Argentina’s food industry are as follows:

Food Products Ranking Company Sales in 2007

(USD Million) 1 Grupo Arcor 1.519 2 Sistema Coca-Cola 758 3 Bagley Latam 419 4 Ledesma 376 5 Kraft Foods 275 6 Química Estrella 176 7 Azucarera Concepción 143 8 Cepas Argentina 95 9 Cafés La Virginia 90 10 Mc Cain 86 11 Flora Dánica 81 12 Alimentos Fargo 79 13 Ferrero 72 14 CALSA 68 15 Corp. Gral. de Alimentos 65 16 Astral 65 17 Estirenos 65 18 Cadbury Stani 64 19 La Campagnola 64 20 Benvenuto 58 21 Tabacal 55 22 Masterfoods 49 23 Niza 48 24 Compass 44 25 Eurest 41 26 Olega 40 27 General Mills 39 28 Frutos de Cuyo 37 29 Agro Aceitunera 36 30 Gate Gourmet 35

Source: Revista Mercado

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4.3. Top Products and Their Packaging Needs Argentina’s top sub-sectors are as follows:

• Meat. • Dairy products and derivates. • Fruits and vegetables. • Flour. • Candy.

Argentina is a major buyer of packaging machinery for candy manufacturing, and a world leader.. The best prospects include chocolate bagging machines and candy wrapping machinery. Argentine flagship enterprise Arcor is the world’s largest candy manufacturer. Argentina also is a world-class producer of apples and pears. Main producers are located in Patagonia, particularly in the province of Rio Negro. The industry’s best prospects include fruit sorting machines (by size and quality). The dairy products industry is a major buyer of sachet and powder filling machinery.

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4.4. Company Profiles GROUP ARCOR, S.A. Industry: Foods Sub-industry: Candy, biscuits, desserts, canned

products, cakes, jam and chocolates. Location: City of Buenos Aires Size (sales): USD $1.6 billion Purchasing potential:

USD $2 - $3 million in 2008/2009

Specific business opportunities:

Biscuits bagging machinery and candy wrapping machinery.

A) Company Description Arcor was founded on July 5, 1951 in Arroyito, province of Córdoba, with the sole purpose of manufacturing quality foods. Arcor rapidly became a market leader and a consolidated industrial group specializing in the manufacturing of candy, biscuits, chocolates and foods. Arcor is the world’s largest candy manufacturer, and the leading exporter of sweets within Argentina, Brazil, Chile and Perú. Arcor’s biscuit manufacturing company, called Bagley Latinoamérica S.A., is South America’s largest biscuit manufacturer. Arcor has developed a reputation of developing leading brands that fulfill the taste of global consumers. Arcor features 32 manufacturing plants located in various countries. The following table illustrates the number of manufacturing plants by product category in each country.

Manufacturing Plants Argentina Chile Brazil Perú México Foods 10 9 1 - - - Chocolates 6 3 2 1 - - Biscuits 7 4 1 2 - - Sweets/Candy 9 4 1 2 1 1

Grupo Arcor also manufactures its own packaging through two packaging firms: Cartocor S.A and Converflex S.A., which are suppliers of corrugated cardboard and flexible containers, respectively. Both of these companies are suppliers to Arcor and third-party clients, as well. Main Products Produced and How They Are Packed All of Arcor’s brands are considered leaders in each of their respective market segments, including: Top Line and Menthoplus (candy), Rumba, Amor and Saladix (biscuits), Aguila and Cofler (chocolates), and Cabsha (sweets).

Product Brand Package Candy Top Line, Menthoplus Sealed polyethylene bag,

cellophane wrapping and carton box

Biscuits Rumba, Amor, Saladix Cellophane wrapping and carton box

Chocolates Aguila, Rocklets, Samba Cellophane wrapping and carton box

Desserts Godet Plastic bag and carton box Sweet Milk Jam (Dulce de Leche)

Arcor Plastic container

Canned tomatoes Arcor Can (380 grs. / 13.4 oz.) Jam Arcor Jar (450 grs. / 16.8 oz.) Powdered cocoa Arcor/Noel Plastic bag and carton box

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C) Installed Packing Machinery All of Arcor’s 32 manufacturing plants feature high-tech machinery. Arcor invests in product packaging-machinery, and also procures flexible-container production machinery, such as laminating, extrusion and printing machinery. Arcor’s packaging and palletizing machinery have an average age of three years. Procurement of new machinery is primarily driven by Arcor’s increasing production. Arcor employs a well-seasoned team of technicians to conduct maintenance at its plants. Information on the most relevant machinery currently in operation at Arcor is as follows: Current Machinery Used Brand Units Origin Average

Age Specification

Wrapping machines Theegarten 2 Netherlands 1 90% Bagging machines Bosch 2 Netherlands 2 90% Bagging machines Fabrima 4 Brazil 7 90% Coding machines Imaje 5 France 3 70% Weighing equipment Yamato 4 Japan 3 80% D) Last Packaging Machinery Purchase Arcor’s last packaging machinery purchase took place in January 2008. The company acquired a bagging machine manufactured by Fabrima of Brazil. In the last three years, Arcor procured candy wrapping machinery and biscuits bagging machinery. These purchases resulted from an increase in local demand.

Machinery Brand Country Cost (Approximately)

Bagging machine Fabrima Brazil N/A E) Future Packing Machinery Ordering Plans, 2008-2009 Arcor spends a yearly average of USD $2-3million in new machinery. The company’s machinery-investment analysis takes place during July and August each year. Purchasing decisions for new machinery usually are made once a year, during the month of November. These decisions are based upon referenced analysis and the board’s approval/disapproval. Due to increasing exports and, most importantly, a sustained growth of local demand, Arcor plans to continue buying additional candy wrapping machinery and biscuits bagging machinery.

Machinery Units Origin Reason for Purchase

Estimated Budget

Bagging machine 1 Brazil Increased production

TBD

Wrapping machines

2 Netherlands Increased production

TBD

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F) Purchasing Policies and Financial Arrangements Arcor, as a market leader, is constantly seeking to buy new machinery that will increase its production capacity. Approval of annual budgets and procurement take place in Buenos Aires. Reportedly, Arcor’s selection criteria for new machinery and equipment are largely based upon suppliers’ track records with the company. Nevertheless, company representatives indicated that they are always open to the possibility of working with new vendors that would add value to Arcor’s supply chain. Prior to bringing a new supplier on board and prior to purchasing new machinery, Arcor requests the vendor to indicate where similar equipment is installed. Subsequently, Arcor deploys a team composed of a purchasing manager and technical staff to visit the facility in which the machine is being used. Basedup on the technical team’s assessment, Arcor determines the strengths and weaknesses of each potential vendor through a comparative table methodology. The, based on the outcome of the analyses, Arcor makes a final decision with regard to the supplier that it will include in its supply chain. Arcor buys directly from Original Equipment Manufacturers (OEMs), and also negotiates financing options directly with the OEMs. G) Factors that Influence Purchasing Decisions 1. In-country technical support. 2. Brand recognition. 3. Technology. 4. Flexibility. 5. Pricing. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Company representatives indicated that Arcor lacks arrangements of any kind with suppliers. They have a preference for European machinery and equipment, basically due to its flexibility and the fact that European suppliers provide technical support in country. Only 5% of the installed machinery at Arcor is of U.S. origin. In order of preference, Dutch and German OEMs are Arcor’s top choices for machinery suppliers The following table illustrates Arcor’s evaluation of machinery based on the country of origin..

Origin Technology Flexibility Service Price United States Good Good Bad Good

Germany Excellent Very Good Very Good High Italy Very Good Very Good Good High

Netherlands Excellent Very Good Very Good High Brazil Good Very Good Good Very Good

I) Trade Show Attendance / Trade Publication Information Arcor sends its personnel out to visit every national and international food-related fair. The company places particular emphasis on local shows and on Germany’s Anuga, Interpack and the International Sweets and Biscuits Fair. Arcor does not subscribe to any specialized machinery sales publications. The company receives electronic newsletters and periodical updates from OEMs on the industry’s state-of-the-art equipment, etc.

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J) Specific Interest

• Candy wrapping machinery. • Biscuits bagging machinery.

K) Contact Information Company Name: Arcor S.A. Contact: Mr. Lucio Peralta Position: Gerente de Compra de Maquinas

(Machinery Purchasing Manager) Address: Bulevar Julio S. Pagani 487

2434 Arroyito, Pcia. de Córdoba Argentina

Voice: 54-11-4310-9028 E-Mail: [email protected] Website: www.arcor.com.ar

http://www.arcor.com.ar/

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ACEITERA GENERAL DEHEZA S.A. (AGD) Industry: Food Sub-industry: Mayonnaise, ketchup, mustard, oil,

peanut butter, soy-based juice. Location: City of Buenos Aires Size (sales): USD $150 (+) million Purchasing potential: USD $1 million (2009) Specific business opportunities:

Semi viscous containerizing machines, filling machines, containerizing machines for aseptic products.

A) Company Description Aceitera General Deheza (AGD) was established in 1948, and is one of Argentina’s major players in the food industry. AGD features five plants for bulk processing and product containerization and packaging. AGD’s products are distributed throughout Argentina and the world with their own brands and private label. AGD holds a 25% share of the local mayonnaise market and a 10% share of the soy-based beverage market. Furthermore, AGD accounts for 30% of Argentina’s total export market of edible oils. AGD began exporting in 1992. Currently, 49% of AGD sales are export-based. The Company’s top export-markets include the United States, Chile, Japan, Brazil, Uruguay, Paraguay and Venezuela, among others. B) Main Products Produced and How They Are Packed AGD is a major producer of dressings, such as mayonnaise, ketchup and mustard. Also, the company is a leading producer and distributor of edible oil and soy-based beverages.

Product Brand Package Mayonnaise Natura and Moyoliva Plastic container and plastic

sachet Mustard Cada Dia Plastic container and plastic

sachet Ketchup Cada Dia Plastic container and plastic

sachet Oil Natura, Trovatore and Mazola Plastic bottle (1Lt. / 33.81 Fl.

oz.) Soy-based beverage So Natura Flexible container and carton

box Juice Runny Flexible container and carton

box C) Installed Packing Machinery AGD’s installed machinery, in average, is seven years old. Maintenance is performed internally by AGD specialized technicians. When procurement of new machinery takes place, AGD requests the OEM to train company technicians.

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At AGD plants, packaging machinery of both Argentine and European origin coexist. Current Machinery Used Brand Units Origin Average

Age Specification

Filling machine Volpak 2 Spain 10 80% Filling machine Bossar 2 Spain 6 70% Sachet filling machine Tecmar 2 Argentina 4 70% Filling machine Volpak 1 Spain 2 80% Filling machine Tetrapack 2 Sweden 5 80% Jar filling and cap closing machine

Breitner 1 Germany 16 70%

D) Last Packaging Machinery Purchase The latest machinery additions feature two Volpak filling machines of Spanish origin. One of the two was acquired in 2005, and the latter is expected to arrive in Argentina by the end of March 2008. AGD representatives expressed a high level of satisfaction with the aforementioned machinery due to its capabilities and versatility/flexibility. AGD disbursed about USD $2 Million to acquire this machinery.

Machinery Brand Country Cost (Approximate) Filling machine Volpak Spain USD $910,000 Filling machine Volpak Spain USD $910,000 E) Future Packaging Machinery Ordering Plans, 2008-2009 AGD has an annual budget of USD $1 million for new machinery purchases. Due to AGD’s increasing export activity, the Company is seeking to optimize resources by replacing inefficient machinery by newer equipment that would lead to increase current production. AGD plans to continue buying containerizing and filling machinery in the next two years. Reportedly, AGD personnel frequently visits PMMI’s website in order to identify new suppliers. Further, the Company is eager to consider new vendors and to receive information from U.S. suppliers.


Estimated Budget

Filling machine 1 Spain Increase production

USD $900,000

Containerizing machine

1 TBD Increase production and

replacement

TBD

F) Purchasing Policies and Financial Arrangements AGD’s purchasing decisions are made at their offices located in the city of Buenos Aires. The company has a supplier database. Nonetheless, they are open to considering additional potential vendors of machinery and equipment. Reportedly, AGD staff frequently visits PMMI’s website in search of U.S. manufacturers of machinery. The company buys directly from OEMs, and negotiates procurement terms directly with the manufacturers. It is customary for AGD directors to travel to major industry shows around the world in search of new machinery. Subsequently, they gather information on machinery and visit the locations in which the equipment is being used. That said, AGD directors also analyze vendors’ post-sale support in Argentina, as well as the availability of spare parts.

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AGD staff is not authorized to disclose company preferences for trade finance. G) Factors that Influence Purchasing Decisions 1. Technical support and availability of spare parts. 2. Technology. 3. Brand recognition. 4. Versatility/Flexibility. 5. Pricing. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers The Spanish brand Volpak is AGD’s preferred brand, basically due to its quality and performance. AGD representatives consider machinery of U.S. origin to be robust, of good quality, and of simple operation. Reportedly, AGD has sent various requests for quotes (RFQs) to several U.S. manufacturers and has never received a response. Frustrated, they wonder if the lack of response has to do with Argentina’s geographical location or simply with the fact that Argentina does not represent a viable market for U.S. suppliers. Furthermore, AGD personnel indicate that there are no local representatives of U.S. manufacturers with technical knowledge of the machinery under portfolio. Additionally, they point out that a representative should not be named as such if it cannot afford to have spare parts in stock. In closing, an AGD technician emphasized that food industry machinery can’t simply be placed out of order until replacement parts arrive several weeks after the breakdown occurrs. The company lacks purchasing agreements of any sort with machinery vendors. Reportedly, pricing is not considered a critical element in the procurement decision process. AGD’s machinery evaluation based on the country of origin is as follows:

Origin Technology Flexibility Service Price United States Very good Very good Bad Good

Spain Excellent Very good Very good Very good Italy Excellent Very good Good Good

Argentina Good Good Good Very good Brand: Volpak Strengths: Excellent technology. Weaknessess: Of extremely delicate use. I) Trade Show Attendance / Trade Publication Information AGD representatives attend, on a regular basis, the Interpack Fair in Germany, the FMI Show in Chicago, the Food and Beverage Expo in Miami, and the SIAL Mercosur Feria del Envase in Argentina. The company subscribes to specialized industry publications, as well as to the Industrial Guide, which is published in Argentina.

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J) Specific Interest AGD is interested in obtaining information on the following machinery:

• Semi-viscous containerizing machines. • Filling machines. • Containerizing machines for aseptic products.

K) Contact Information Company Name: Aceitera General Deheza S.A. Contact: Oscar Moyano Position: Gerente de Planta

(Plant Manager) Address: Ruta 2 B Km 8

5733 Villa Mercedes Pcia. de San Luis, Argentina.

Voice:: 54-2657-440600 E-Mail: [email protected] Website: www.agd.com.ar

mailto:[email protected]

http://www.agd.com.ar/

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COMPAÑIA ARGENTINA DE LEVADURAS S.A.I.C. (CALSA). Industry: Food Sub-industry: Bakery ingredients (yeast, margarine,

edible grease, baking additives, etc.) Location: Province of Buenos Aires, Argentina Size (sales): USD $65 Million Purchasing potential:

USD $1 Million (2008-2009)


Powder filling/packing machines and bakery machinery

A) Company Description

CALSA was founded in 1952, and is currently a market leader for bakery ingredients and additives. In 1991, the Australian group Burns Philp acquired the company. In 1994, CALSA’s new owners bought a yeast production operation called Seagram Argentina. Since then, and as a result of major investments in plant expansion and machinery modernization, CALSA consolidated its market positioning in Argentina. In 2002, the firm inaugurated a yeast production plant at a major industrial park located in the northwestern province of Tucumán. In October 2004, CALSA was acquired by the British firm Associated British Foods, a leading player in the primary food business, and a producer of edible products and food ingredients. Currently, CALSA is part of the so-called AB Mauri Division, a world-class producer and distributor of yeast, and bakery ingredients and additives. AB Mauri encompasses a group of companies, CALSA being one of them, which have a presence in 15 Spanish-speaking countries. CALSA currently operates as a wholesale distributor and a retailer of bakery ingredients and additives. B) Main Products Produced and How They Are Packed

Product Brand Package Yeast CALSA Paper wrapping, high vacuum

bag. Margarines MTK, Súper, Paratapas, Blancatapa,

Premium, Marfina Paper wrapping, polyethylene bag and carton box.

Additives Fórmula 1, Plus 2000, SB Directo, SB Tablas, Mejormiga, Pan Inglés SB, Pan de Viena, Pan Dulce, CALSA Max, Fórmula N

Paper bag and plastic container (CALSA Max and Fórmula N).

Edible grease Oleomargarina, Bizcochina, Pastelgras, Flavia, Hornito

Polyethylene bag and carton box.

Edible oil Delicrock, Mr. Choc, Super Fry Plastic container and carton box.

Premix and cooking flour

Pan de Queso, Croissant, Budín Paper bag.

Malt Extracto Hudson, Harina Maltarina, Extramalt

Plastic container.

Bakery line Crema Pastelera, Crema Chantilly, Merengue Instantáneo, Brillo en Polvo, Cobertura de Chocolate, Polvo para Hornear,

Paper bag, carton box and plastic container.

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C) Installed Packaging Machinery As previously mentioned, CALSA features two production plants located in Buenos Aires and Tucumán. Installed machinery features an average age of five years. CALSA technicians perform maintenance work internally. OEMs provide installation and training services. Information on CALSA’s most relevant machinery is as follows:

Current Machinery Used Brand Units Origin Average Age

Specification

Wrapping machines Bock & Sohn 2 Germany 10 90% Packing machines for plastic containers

Visignano 2 Argentina 3 90%

Powder filling machines Paglierani 2 Italy 10 80% Sachet filling, sealing machine

Carlini 1 Argentina 3 90%

Packing machine for additives Benhill 1 Germany 1 100% D) Last Packaging Machinery Purchase Machinery procurement in the last three years entailed the acquisition of two full lines for additives and margarine. The company purchased an additives packing machine manufactured by Benhill from Germany in 2006, and a plastic-container packing machine by the Argentine manufacturer Visignano in 2007.

Machinery Brand Country Cost (Approximate) Plastic-container packing machine (Margarine)

Visignano Argentina N/A

Additives packing machine Benhill Germany N/A E) Future Packaging Machinery Ordering Plans, 2008-2009 CALSA has an annual budget of USD $1 million for the 2008-2009 timeframe. Machinery replacements are driven by the need to increase production and substitute obsolete equipment. Machinery procurement for the next two years will mainly encompass new additives lines.


Estimated Budget

Additives packing machine 1 TBD Increase production

TBD

F) Purchasing Policies and Financial Arrangements The company’s Plant Department develops procurement proposals that are submitted to the Financial Department for review. Subsequently, the proposal, including an investment plan, is presented to the company’s board, which makes the final decision. A company representative stated that due to several mergers and acquisitions that took place in recent years, CALSA constantly monitors market suppliers‘ performance prior to making a purchase. Machinery purchases are channeled directly through OEMs with the intervention of the local representative, when appropriate. Purchasing transactions are commonly done in cash; 50% advanced payment and the outstanding paid upon delivery of the machinery. On occasion, the supplier provides financing.

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G. Factors that Influence Purchasing Decisions 1. In-country technical support. 2. Brand recognition. 3. Reliability. 4. Versatility/Flexibility. 5. Pricing. H. Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers CALSA representatives indicate their preference for European machinery. Nonetheless, in recent years, the firm also has purchased locally manufactured equipment. In order of preference, Italian and German manufacturers are preferred over manufacturers from other countries. CALSA particularly appreciates Italian design. CALSA lacks purchasing agreements with suppliers. However, as it is part of AB Mauri Hispanoamérica, on occasion, machinery procurement is materialized using suppliers that are currently servicing other firms under the holding’s management. CALSA’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price United States Good Good Good Good

Germany Excellent Very good Very good High (expensive)Italy Very good Very good Very good High (expensive)

Argentina Good Good Good Very good Spain Good Good Good High (expensive)

I) Trade Show Attendance / Trade Publication Information CALSA staff attends most international trade shows for packaging machinery, particularly Germany’s Anuga and Interpack. Further, the firm attends local food industry fairs. The company receives newsletters and supplier-furnished information on new machinery. J) Specific Interest CALSA is interested in receiving information on the following machinery:

• Powder filling/packing machines. • Baking industry machinery in general.

K) Contact Information Company Name: Compañía Argentina de Levaduras

SAICI. Contact: Eng. Carlos Ernesto Vio Position: Jefe de Mantenimiento y Obras

(Maintenance Manager) Address: Bulevard Gob. Rodríguez 3145,

(B1824JDK) Lanús Este Pcia. de Buenos Aires, Argentina

Voice: 54-11-4365-2000 E-Mail: [email protected] Website: www.calsa.com.ar


http://www.calsa.com.ar/

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CONSERVAS ALCO S.A. Industry: Foods Sub-industry: Canned fruits, tomatoes, vegetables,

sauces and jams. Location: City of Buenos Aires Size (sales): USD $130 million Purchasing potential:

USD $3 million


Labeling machine and containerizing/packing line for pulp concentrates.

A) Company Description The firm was established in 1958 in Tupungato, province of Mendoza. ALCO inaugurated its first production plant for canned foods in 1976, also in Tupungato. In 1987, the company established a second plant in the province of Catamarca. In the year 2000, ALCO opened a new plant located in Chilecito, province of La Rioja. Subsequently, it added a new line of products, namely CICA, which was acquired from Unilever. The company’s expansion continued, and in 2001, the firm bought three jam production plants owned by Kraft Foods under their traditional brand name, Canale. ALCO also has its own tin can production facility in Buenos Aires. The largest plants, from a production standpoint, are in Tupungato and Tunuyán, in Mendoza. These plants have a combined daily production capacity of 1.3 tons of canned products. B) Main Products Produced and How They Are Packed Information on ALCO’s product portfolio is as follows:

Product Brand Package Canned fruit ALCO Tin container Canned tomatoes ALCO Tin container, tetrabrik, plastic bottle Canned vegetables ALCO Tin container Canned sauces ALCO Tin container Canned jams Canale Glass jar and plastic container C) Installed Packing Machinery ALCO features several types of containerizing and packing lines. Most of its products are canned, and the production is performed with machinery of European origin. The machinery’s average age is 12 years. Installed machinery includes equipment from Italy, Spain and the United States. Information on ALCO’s relevant installed machinery is as follows:


Specification

Filling machine (canned products)

Manzini 1 Italy 15 80%

Filling machine Comaco 2 Italy 12 80% Pit extractor Omip 2 Italy 10 90% Dicing machine Urschel 1 U.S. 8 90% Packing machine Procen 1 Spain 1 90% Wrap-around machine Samovi -

Ricart 1 Spain 5 100%

Labeling machine Newman 1 U.S. 5 N/A

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D) Last Packaging Machinery Purchase In 2007, the company procured a used Procen packing machine from Spain, which was worth USD $100,000. Reportedly, ALCO invested USD $2 million in the last three years in new machinery for its tin can manufacturing plant.

Machinery Brand Country Cost (Approximate) Packing machine Procen Spain USD $100,000 E) Future Packing Machinery Ordering Plans, 2008-2009 ALCO has allocated USD $3 million for new machinery purchases. The company is seeking to add a containerizing/packing line for pulp concentrates. Reportedly, the firm is considering the acquisition of equipment by U.S. manufacturer Fran Rica. Procurement of a new labeling machine also is under consideration.

Machinery Units Origin Reason for Purchase Estimated Budget Containerizing/packing line for pulp concentrates.

1 U.S. Increase production USD $3 million

Labeling machine 1 TBD Increase production TBD F) Purchasing Policies and Financial Arrangements When machinery procurement entails significant amounts of money, ALCO deals directly with the OEM. On occasion, purchasing agreements are processed through local representatives. For small purchases, the company deals with used machinery brokers. Transactions are performed in cash or with supplier or bank financing. ALCO has filed bank credit requests for future machinery purchases. A company representative admits a lack of dynamism in decision-making. Frequently, the plant manager determines which machinery is needed, buys it, and then later informs the company owners. Company technicians perform maintenance internally. G) Factors that Influence Purchasing Decisions

1. Brand recognition. 2. Reliability. 3. In-country technical support. 4. Pricing. 5. Versatility/flexibility.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers ALCO lacks purchasing agreements with suppliers. A company representative indicates that European machinery tends to better adapt to the needs of Argentine small and medium enterprises. In his opinion, U.S. machinery works well for large-scale production. ALCO personnel comment that given the relatively small number of international suppliers, there is not a whole lot of analysis to perform. Rather, the company prefers to focus on machinery technical specifications and after-sales support in Argentina as a market differential.

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ALCO’s machinery evaluation based on the country of origin is as follows:

Origin Technology Flexibility Service Price United States Very good Good Bad Affordable

Italy Excellent Good Very good High (expensive)Germany Excellent Good Very good High (expensive)

Spain Excellent Good Very good High (expensive) I) Trade Show Attendance / Trade Publication Information Company executives attend international trade shows, such as Paris’ SIAL and Bologna’s Anuga. Further, the firm participates in Feria de Parma (CIBUS), Interpack in Germany and Sansi Food in New York. In Latin America, company personnel attend the SIAL Mercosur.. International suppliers usually furnish information on new machinery. The company has received useful information on machinery at Feria de Parma (CIBUS). J) Specific Interest ALCO is interested in receiving information on:

• Containerizing/packing line for pulp concentrates. • Labeling machine.

K) Contact Information Company Name: Conservas ALCO Contact: Sr. Roberto Lamm Position: Gerente de Planta

(Plant Manager) Address (Plant): Calle El Alamo Km 16 – Cordón de

Plata (M5561) Provincia de Mendoza, Argentina

Voice: 54-2622-491-001 / 3 Address (Commercial) Av. Córdoba 1345 Piso 12

(C1055AAD) Ciudad de Buenos Aires, Argentina

Voice 54-11-4811-0547 E-Mail: [email protected] Website: www.conservasalco.com.ar


http://www.conservasalco.com.ar/

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COMPAÑÍA REGIONAL DE LACTEOS DE ARGENTINA S.A. (CORLASA) Industry: Foods Sub-industry: Powdered milk and milk derivates Location: Province of Santa Fe Size (sales): USD $50 million (approximately) Purchasing potential:

USD $2 million


Filling/packing lines for powdered milk

A) Company Description The firm was originally established as Lácteos de Santa Fé in the 1950s, in the province of Santa Fé. In 2005, the Peruvian firm Grupo Gloria acquired 50% of the company. At that time, the firm changed its name to Compañía Regional de Lácteos Argentina S.A. (Corlasa). The company’s core business is the production of dairy products, particularly the production of powdered milk. In 2006, the company started to produce various types of powdered milk, such whole, low fat, modified and instant powdered milk. The company’s plant has a daily reception capacity of 800,000 liters, and a daily production capacity of 90 metric tons of powdered milk. Furthermore, the company produces anhydrate grease (AMF), with a production capacity of 32,000 liters. One hundred percent of grease production is exported to global markets. The production of powdered milk is exported and also is used for Argentina’s internal consumption. B) Main Products Produced and How They Are Packed Corlasa processes fresh milk and then containerizes it as powdered milk in various presentations.

Product Brand Package Powdered milk Santa Fé and Rincón de

Ávila Carton box (800 gr. / 28.2 oz.), special paper bags, (25 gr./ 0.9oz), reinforced bags (500 Kg. /1,100 lbs. and 1,000 Kg / 2,000 lbs.).

Butter Rincón de Ávila Drums C) Installed Packing Machinery Corlasa features full filling/packing lines for powdered milk. The company recently concluded the installation of an anhydrate grease line. Cortasa’s most relevant installed machinery include: Current Machinery Used Brand Units Origin Average

Age Specification

Filling machine Meypack 3 Germany 4 90% Packing machine Vollenda 3 Germany 4 90%

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D) Last Packaging Machinery Purchase During 2007, the company installed an anhydrate grease production plant for an undisclosed investment figure. In 2005, Corlasa purchased a Vollenda filling/packing machine from Germany.

Machinery Brand Country Cost (Approximate) Filling/packing machine Vollenda Germany N/A E) Future Packing Machinery Ordering Plans, 2008-2009 The company has a budget of USD $2 million for machinery procurement. Due to a continued increase in powdered milk exports, the company acquired a new filling/packing line for powdered milk.

Machinery Units Origin Reason for Purchase Estimated Budget Filling/packing line 1 TBD Increase production USD $1,800,000 F) Purchasing Policies and Financial Arrangements Filling/packing machines are purchased directly from the manufacturer. The OEM is responsible for the machinery’s installation. Company personnel perform machinery maintenance internally. Company representatives indicate that they conduct a comparison of market options available to suit their needs. Subsequently, company staff conduct site visits to see the machinery working, and report to the company’s board, which decides on the investment. Cortasa negotiates with suppliers on payment terms. The company is accustomed to leasing new machinery and to obtaining supplier financing. G) Factors that Influence Purchasing Decisions

1. Pricing. 2. Brand recognition. 3. In-country technical support. 4. Reliability. 5. Technology.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers The company lacks a preference for any particular brand or supplier. The company does not have purchasing agreements with suppliers. Reportedly, the market has undergone several mergers and acquisitions (M&As) that translate as a loss of brand and supplier identity. Cortasa’s decisions are basically price driven. Company representatives indicate that in recent years, Australian and Dutch manufacturers equal their Italian competitors in terms of quality. Also, Sweden has improved its position as a world-class supplier of machinery for the dairy industry. Company representatives cannot make a judgment on U.S. machinery because they do not know of any U.S. brand names.

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Corlasa’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price United States N/A N/A N/A N/A

Germany Excellent Very good Very good High (expensive)New Zealand Excellent Very good Good Intermediate

Australia Very good Good Good Intermediate Sweden Very good Good Good High (expensive)

Italy Excellent Very good Very good High (expensive) I) Trade Show Attendance / Trade Publication Information The company’s management personnel attend international trade fairs. To them, SIAL is the most relevant. The firm subscribes to Argentina’s Industrial Guide. J) Specific Interest The company is interested in receiving information on the following machine:

• Filling/packing machinery for powdered milk. K) Contact Information Company Name: CORLASA Contact: Sr. Luis Latorre Position: Presidente

(President) Address: Av. L.N. Alem 130,

(3080) Esperanza Provincia de Santa Fé, Argentina

Voice: 54-3496-42-8906 E-Mail: [email protected] Website: www.corlasa.com


http://www.corlasa.com/

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ECOFRUT S.A. Industry: Foods Sub-industry: Fresh fruits (pears and apples) Location: Province of Río Negro Size (sales): USD $30 million Purchasing potential:

USD $700,000 (+)


Fruit sorting/packing machinery (by quality and weight).

A) Company Description Ecofrut SA was established in 1994 in Rio Negro, a southwestern province of Patagonia in Argentina. The firm established strategic partnerships with other fruit producers in the region, including La Esperanza, Los Alamos de Rosauer, Cooperativa FADAC and Santarelli. Later that same year, the consortium built a refrigerated storage facility with a capacity for 80,000 boxes. Currently, the facility features a seasonal rotation of 7,000 pallets. As of 1995, the consortium became a consolidated exporter. Between 1995 and 2004, the U.S. and the European Union were the top destinations for the consortium’s products. Currently, the group is exporting to Russia, Germany, Spain, Portugal, France, Sweden, the Netherlands and the United States.. Apple exports encompass the following apple varieties: Red Delicious, Granny Smith and Starkrimson. Pears exports include the following varieties: Williams, Packhams Triumph and Beurre Bosc. B) Main Products Produced and How They Are Packed Ecofrut packs its fruits in wooden boxes, selected by size and weight:

Product Brand Package Fruits (apples and pears) EF, Santarelli and Amapola Wooden and carton boxes. C) Installed Packing Machinery Ecofrut’s plant features fruit sorting machinery that classifies fruit by weight and size. Seventy percent of the installed machinery is of Argentine make. The average age of the machinery is 14 years. Information on the most relevant installed machinery is as follows: Current Machinery Used Brand Units Origin Average

Age Specification

Sorting machine Ballada 1 Argentina 20 100% Sorting machine Sorma 1 Italy 10 100% Coding machine N/A 2 U.K. 10 100% Sorting machine Prodol 1 Argentina 1 100% D) Last Packaging Machinery Purchase In 2007, Ecofrut purchased a Prodol sorting machine of Argentine origin at a price of USD $700,000. With this machine, the firm started to pack kiwis.

Machinery Brand Country Cost (Approximate) Sorting machine Prodol Argentina USD $700,000

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E) Future Packing Machinery Ordering Plans, 2008-2009 Ecofrut currently does not have a fixed budget for machinery procurement. However, given the strong exporting activity, it is likely that the company will buy one or maybe two fruit sorting machines. The investment is likely to surpass USD $700,000. A company representative indicates that Italian machinery features very good quality; however, pricing could be an impediment for future purchases from European manufacturers. Argentine manufacturers are likely to be selected as future suppliers, particularly from a pricing perspective. The company is open to receiving information from new suppliers:

Machinery Units Origin Reason for Purchase Estimated Budget Fruit sorting machine 1-2 TBD Increase production TBD F) Purchasing Policies and Financial Arrangements Packing machinery procurement is channeled directly through the OEM. Purchasing decisions are made in Ecofrut’s headquarters in Río Negro. Machinery installation is performed by the OEM. Company technicians perform maintenance internally. Company representatives indicate that they select machinery based upon quality, versatility and pricing. The firm relies heavily on after-sales support and expects local vendors to have a healthy stock of parts readily available. Considering the geographical location of Ecofrut in Patagonia, machinery quality and simple maintenance is key. Purchasing transactions are commonly done in cash; 50% advanced payment and the outstanding paid upon delivery of the machinery. Ecofrut prefers supplier financing. G) Factors that Influence Purchasing Decisions

1. Pricing. 2. In-country technical support. 3. Simple operability. 4. Availability of repair parts. 5. Machinery featuring high quality components.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Company representatives indicate that locally manufactured machinery features good quality. However, it does not match the quality of Italian and Spanish equipment. It was noted that U.S. machinery is also of good quality; however, local representation is nonexistent. As previously mentioned, quality after-sales service is key, and continued client follow-up is an important element in after-sales support. The firm lacks purchasing agreements with suppliers. A company representative comments that machinery from New Zealand and Australia is starting to come into the market. However, the brand names of machinery from these countries are still unknown to the local market.

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Ecofrut’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price United States Very good Good Bad (no local representatives) Good

Argentina Very good Good Very good Adequate Spain Very good Good Poor High (expensive)Italy Very good Good Very good High (expensive)

I) Trade Show Attendance / Trade Publication Information Company directors generally attend Germany’s Fruit Logistic Fair. The company does not receive specialized publications. J) Specific Interest Ecofrut is interested in receiving information on the following machinery:

• Fruit sorting/packing machinery (by quality and weight).

K) Contact Information Company Name: Ecofrut S.A. Contact: Eng. Gabriel Gómez Position: Ingeniero de Planta

(Plant Engineer) Address: Av. Alem 690

(8324) Cipolletti Pcia. de Rio Negro, Argentina

Voice: 54-299-477-5313 E-Mail: [email protected] Website: www.imasce.com.ar

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FARGO S.A. Industry: Food Sub-industry: Sliced bread, hamburger bread, hot

dog bread, biscuits, pasta and pastry. Location: Province of Buenos Aires Size (sales): USD $56 million Purchasing potential:

USD $300,000


Bread packing machines, plastic conversion machines

A) Company Description Fargo was founded in 1973. The company employs a workforce of nearly 1,400 employees, and accounts for USD $56 million in annual sales. Fargo is a leading producer of sliced bread, hamburger bread, hot dog bread, biscuits, pasta and pastry. The company is McDonald’s main supplier of hamburguer bread. Fargo currently exports to Chile, Uruguay, Spain, the United States and Paraguay, among others. Fargo has six processing and packaging plants, as well as a plastic conversion plant for the production and printing of its plastic bags and containers. B) Main Products Produced and How They Are Packed

Product Brand Package Sliced bread Fargo Polyethylene bag Hamburger bread Fargo Polyethylene bag Hot dog bread Fargo Polyethylene bag Pastry Fargo Polypropylene laminated

sealed Biscuits Fargo Polyethylene bag Pasta Fargo Polypropylene laminated

sealed C) Installed Packing Machinery Installed machinery at Fargo facilities has an average age of 16 years. The company has its own bag production and packing machinery for products under its portfolio. Fargo technicians perform maintenance work internally. The company provides training to technical staff as needed. At the time of a new machinery purchase, Fargo receives technical support from the OEM and usually buys a decent stock of original parts to keep in house and to ensure just-in-time operations. Most representative machinery currently installed at Fargo facilities is as follows: Current Machinery Used Brand Units Origin Average

Age Specification

Extrusion Machine Exse 4 Argentina 4 90% Extrusion Machine Egan 1 U.S. 30 90% Flexographic printing machine

Uteco 2 Italy 11 80%

Confectioning Machine FMC 5 U.S. 13 80% Bagging machine AMS 35 U.S. 15 90% Plastic winder/Cutting machine

Exse 1 Argentina 35 50%

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D) Last Packaging Machinery Purchase Fargo’s latest machinery acquisition was made in late 2007. The company purchased an AMS bagging machine, for which they paid approximately USD $30,000. In 2006, Fargo bought an Exse extruding machine, which was manufactured in Argentina.

Machinery Brand Country Cost (Approximate) Bagging machine AMS United States USD $30,000 (+) E) Future Packing Machinery Ordering Plans, 2008-2009 Fargo’s annual budget for machinery procurement is USD $300,000. However, given the elevated average age of the company’s machinery, monthly meetings are taking place to discuss the firm’s production needs and possible new purchases. Recurrent malfunctioning of Fargo’s aging machinery is the main driver for new machinery procurement. The company plans to buy AMS bagging machines and FMC bag-confectioning machines, both from the United States..


Estimated Budget

Bag confectioning machine

1-2 U.S. Replacement USD $200,000 (+)

Bagging machine 1-2 U.S. Replacement USD $30,000 (+) F) Purchasing Policies and Financial Arrangements Procurement decisions are made at Fargo’s offices in Buenos Aires. The company prefers machinery with significant brand recognition. Nonetheless, prior to the purchase, company representatives visit a third-party location where the equipment is installed and functioning. A company representative indicates that the firm would like to have a homogeneous family of machines, meaning more machines from fewer suppliers. This would facilitate future purchases of parts and the training of technical staff. Fargo also indicates that company staff is deployed to attend major industry shows when there is a need for new machinery. While at the trade shows, Fargo representatives contact potential suppliers to analyze their product offerings. The company buys directly from OEMs in cash. Nonetheless, they are interested in financing alternatives that vendors could provide. G) Factors that Influence Purchasing Decisions 1. Brand recognition. 2. Quality. 3. Availability of spare parts. 4. After-sales support. 5. Pricing and financing options. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Fargo specialists perceive AMS and FMC as good quality brands. Company representatives reiterate the importance of a homogeneous family of machines and its desire to establish long-term relationships with suppliers.

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Fargo does not engage in agreements with vendors that preclude them from buying machinery from other suppliers. Fargo representatives tend to believe that the competition affecting purchasing decisions today is between suppliers from the U.S. and Europe versus China and Taiwan. Although Asian machinery is of lesser quality, it also is cheaper than U.S. and European brands.

Origin Technology Flexibility Service Price United States Excellent Very Good Very Good Good

Italy Very Good Good Good High Argentina Good Good Good Very Good Taiwan Good Good Poor Very Good

I) Trade Show Attendance / Trade Publication Information Fargo pesonnel attend major industry shows in Argentina, such as Argenplas and Sial Mercosur. Further, they visit relevant trade fairs in the United States and Europe. The company subscribes to Argentina’s Industrial Guide and conducts internet research on new machinery. J) Specific Interest Fargo representatives are interested in receiving information on the following machinery:

• Bread packing machines. • Plastic conversion machines.

K) Contact Information Company Name: Fargo S.A. Contact: Mr. Victor Velazquez Position: Supervisor de Mantenimiento

(Maintenance Supervisor) Address: Haiti 2215

1741 Villa Adelina Pcia. de Buenos Aires, Argentina

Telephone:: 54-11-4766-7754 E-Mail: [email protected] Website: www.fargo.com.ar


http://www.fargo.com.ar/

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FARMFRITES ARGENTINA – ALIMENTOS MODERNOS S.A.

Industry: Foods Sub-industry: Pre-fried and frozen potatoes Location: Province of Buenos Aires Size (sales): USD $20 million (approximately) Purchasing potential:

USD $500,000


Filling machines, box forming machines and compacting machines.

A) Company Description Alimentos Modernos was established in Argentina over a decade ago. The company produces pre-fried and frozen potatoes in various product-presentations. Farmfrites Argentina is subsidiary of the Dutch firm Farmfrites Beheer BV. The company’s plant in Argentina supplies several countries in Latin America. The firm employs 1,700 people and has operations in the Netherlands, Belgium, France, Egypt and Argentina. In 1999, the company formed a partnership with the U.S. firm J.R. Simplot Company, which enabled Farmfrites to consolidate its operation globally. B) Main Products Produced and How They Are Packed Farmfrites produces the following product lines:

Product Brand Package Traditional French fries Farmfrites Sealed polypropylene bag, carton box. Round potatoes (Spanish style) Farmfrites Sealed polypropylene bag, carton box.. Noisette Style potatoes Farmfrites Sealed polypropylene bag, carton box. C) Installed Packing Machinery The company features machinery from various origins, such as Japan, Italy, Germany and the United States, among others. The average age of its installed machinery is six years. Information on Farmfrites’ most relevant installed machinery is as follows:

Current Machinery Used

Brand Units Origin Average Age

Specification

Bag forming/filling machines

Innotech 2 Germany 5 100 %

Weighing machines Ishida 2 Japan (U.S. rep: Heat and Control)

2 100%

Box forming machine Siat 1 Italia 10 100% Box filling machine Blue Print

Automation 1 US 6

months 100%

D) Last Packaging Machinery Purchase In 2006, the company purchased an Ishida weighing machine, and in 2007, a box-filling machine by Blue Print Automation from the United States.

Machinery Brand Country Cost (Approximate) Weighing machine Ishida Japan N/A Box filling machine Blue Print Automation U.S. N/A

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E) Future Packing Machinery Ordering Plans, 2008-2009 The company has a budget of USD $500,000 for new machinery procurement. Increased production is the main driver for equipment acquisition. Farmfrites is seeking versatile and flexible machinery with high quality components. The firm plans to purchase box filling machines, box forming machines and compacting machines.


Estimated Budget

Box filling machine 1 U.S. (possibly from Blue Print Automation)

Increase production

Box forming machine 1 TBD Increase production Compacting machine (places bags in boxes)

1 TBD Increase production USD

$500,000

F) Purchasing Policies and Financial Arrangements At Farmfrites, most packing machinery purchases are channeled through local representatives from foreign firms or representatives in other countries. For example, the purchase of the Ishida machinery was coordinated between Ishida’s representative in the United States, and the local agent in Argentina. On occasion, the local subsidiary of the Dutch firm receives in-company machinery transfers from plants in the Netherlands. Nevertheless, Farmfrites Argentina has the autonomy to select suppliers for packaging machinery. On occasion, company headquarters suggests OEMs. Generally, the OEM and plant technicians perform machinery installations jointly. Farmfrites Argentina’s personnel carry out preventive maintenance. Payment terms vary based on the magnitude of the operation. Financing is coordinated with the vendor. Machine reliability is the most important element for the firm. It expects the equipment to perform for extended periods of time without too much maintenance. Also, machinery with simple and quick format customizations for new product presentations is highly valued. G) Factors that Influence Purchasing Decisions

1. Reliability. 2. Flexibility/versatility. 3. Technical support. 4. Brand name. 5. Pricing.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Farmfrites’main office suggests potential suppliers from their database, however, as previously indicated the local subsidiary has independence to select suppliers on their own. Company representatives indicate that U.S. machinery is more robust than European equipment, however from a technology standpoint, they tend to be similar. That said U.S. machinery is believed to have a better performance in the long run. Most highly regarded manufacturers are located in Germany, Belgium and France. Italian machinery commonly features fragile structures, according to a company representative. From a maintenance standpoint, both, European and U.S. suppliers do not fulfill client expectations. The firm lacks purchasing agreements with suppliers.

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Farmfrites’ machinery evaluation based on country of origin follows:

Origin Technology Flexibility Service Price United States Very good Very good Bad High (expensive)

Belgium Excellent Very good Bad High (expensive)Italy Good Good Bad High (expensive)

France Excellent Very good Bad High (expensive)Germany Excellent Very good Bad High (expensive)

I) Trade Show Attendance / Trade Publication Information Only on rare occasions does company staff attend international trade shows. They do, however, visit local shows, such as Tecnofidta and Sial Mercosur. The firm does not receive packaging-related publications. J) Specific Interest Farmfrite is interested in receiving information on the following machinery:

• Box filling and box forming machines. • Compacting machines (which place bags in boxes)

K) Contact Information Company Name: Farmfrites Argentina – Alimentos

Modernos S.A. Contact: Sr. Hernán Agote Position: Gerente de Planta

(Plant Manager) Contact: Sr. Horacio Resler Position: Jefe de Mantenimiento

(Maintenance Manager) Address (Industrial Plant):

Av. Alexander Fleming 2238 (B1606DAB) Munro Pcia. de Buenos. Aires.

Voice: 54-11-4762-0293 E-Mail: [email protected] Website: www.farmfrites.com

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GEORGALOS HERMANOS S.A.I.C.A. Industry: Food Sub-industry: Candy, chocolate, snacks, peanuts,

cereal bars, nougat, comfitures, etc. Location: Province of Buenos Aires Size (sales): USD $24 million Purchasing potential:

USD $1 million


Packing, wrapping and weighing machines for candy and sweets.

A) Company Description Georgalos is an Argentine company that was established in 1939 as a producer and distributor of candy and sweets. The company has two plants located in the city of Rio Segundo in the province of Cordoba. One of the plants basically processes candy and sweets. The second is a peanut processing plant. Georgalos exports peanuts under its own brand and also produces for private labels. The company currently exports finished products and some products in bulk to more than 30 countries. Mantecol, a Georgalos leading brand for peanut nougat, was sold to Cadbury in 2001. B) Main Products Produced and How They Are Packed Information on Georgalos’ product lines is as follows:

Product Brand Package Chocolate Tokke, Choc’n Roll, Crico, Tabletas Sealed paper wrapping, millboard

cases (12 units of 25 gr. per box) Candy Flynn Paff, Caramelos de Leche Paper wrapping and polyethylene bags

(102 units of 4.5 gr. each) Snacks Georgy’s and Georgalos Laminated and sealed bags (100 gr.

each) in corrugated carton boxes Cereal bars Flow Sealed Paper wrapping (25 gr. each) in

corrugated carton boxes. C) Installed Packing Machinery Installed machinery at Georgalos includes Argentine, Italian, German and Swiss-made machinery. The average age of the machinery is six years. Information on Georgalos’ installed machinery is as follows:

Current Machinery Used

Brand Units Origin Average Age

Specification

Wrapping machines Fripack SRL 15 Argentina 10 90% Wrapping machines Sig 5 Swiss 5 95% Packing machines Eurosigma 2 Italy 8 90% Thermo-forming machine Tiromat 1 Germany 4 90%

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D) Last Packaging Machinery Purchase The company has not made a significant purchase in the last couple of years. Georgalos’ last acquisition took place in 2004, when it bought a Tiromat thermo-forming machine from Germany. In 2000, the company bought a filling/packing machine by Eurosigma from Italy.

Machinery Brand Country Cost (Approximate) Thermo-forming machine Tiromat Germany N/A E) Future Packing Machinery Ordering Plans, 2008-2009 Georgalos has a budget of USD $1 million for new machinery purchases. The main driver for machinery acquisitions is the sustained growth in international demand for Georgalos’ products. The company plans to buy wrapping machines, weighing machines, filling/packing machines and automatic product feeders. The origin for future machinery purchases is undetermined.

Machinery Units Origin Reason for Purchase Estimated BudgetWrapping machinery 1 TBD Increase production Weighing machine 1 TBD Increase production Filling/packing machine 1 TBD Increase production Automatic product feeders 1 TBD Increase production

USD $1 million

F) Purchasing Policies and Financial Arrangements Company representatives indicate that they conduct a comparison of market options available to suit their needs. Subsequently, company staff conducts site visits to see the machinery working and requests commercial references on the supplier. A company representative indicates that in the Argentine business culture, it is important to learn from other companies’ experiences and also to become familiar with the machinery’s technical specifications. The local representative is expected to have sound knowledge of the products under its portfolio and to provide solutions expeditiously. Leasing and supplier financing are the most desired payment terms, and they are negotiated directly with the OEM. Maintenance personnel perform machinery repairs internally. Training is provided internally and by outside trainers. G) Factors that Influence Purchasing Decisions

1. Pricing. 2. Technical support in Argentina. 3. Brand recognition. 4. Commercial references.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers The company lacks purchasing agreements with suppliers. Georgalos prefers to work with a small universe of suppliers. Usually, they like to work with those with whom they have long standing relationships. That said, the company is open to considering new suppliers that would meet their needs. A company representative indicates that with so many M&As taking place in the industry, brand names are no longer identified with a certain country, as they were in the past. Currently, corporations distinguish themselves from their competition through quality, technology and machinery flexibility, among other elements. The firm is unfamiliar with U.S. suppliers.

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I) Trade Show Attendance / Trade Publication Information Company managers frequently attend Germany’s Interpack Fair. Information on new technologies is usually received through manufacturers or agents. J) Specific Interest

Georgalos is interested in receiving information on the following machinery: • Wrapping machines. • Packing/filling machines • Candy weighing machines.

K) Contact Information Company Name: Georgalos Hnos. S.A.I.C.A. Contact: Sr. Walter Crespo Position: Director Industrial

(Industrial Director) Address (Industrial Plant):

Bv. Miguel Georgalos 500 (5960) Río Segundo Pcia. de Córdoba

Voice: 54-3572-42-9100 Address (Commercial Offices):

Venezuela 3854 (B1603BPT) Villa Martelli Pcia. de Buenos Aires, Argentina

Voice: 54-11-4709-8900 E-Mail: [email protected] Website: www.georgalos.com.ar


http://www.georgalos.com.ar/

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GRUPO MATAS S.A. Industry: Food Sub-industry: Broths, cream soups, dehydrated

mashed potatoes and desserts Location: Villa Nueva, province of Mendoza Size (sales): USD $37 million Purchasing potential:

USD $200,000 (2008)


Forming and filling machines and line filling machines.

A) Company Description Grupo Matas (GMS), an agro-industrial, family-owned business, was founded in 1963. Most of the company’s agricultural input comes from the land that it owns in the province of Mendoza. GMS covers the production process, as well as the distribution and sales of its final products. GMS’ 4,000 hectares (9,900 acres) of land are an enormous source of vegetables. To that end, GMS is considered one of Argentina’s top suppliers of dehydrated vegetables, broths and soups. The company employs a workforce of 800 people. GMS is a leading supplier of private label products to major hypermarket and supermarket chains in Argentina. The company has commercial offices in Buenos Aires and Miami. B) Main Products Produced and How They Are Packed

Product Brand Package Desserts Private label for hypermarkets Plastic container Dehydrated compacted broth cubes

Private label for hypermarkets Plastic box (600 cubes of 4 gr. Each / 0.14 oz ea.)

Dehydrated compacted broth cubes

Private label for hypermarkets Plastic bag (120 cubes)

Dehydrated compacted broth cubes

Private label for hypermarkets Plastic bucket (2,000 cubes)

Cream Soup Private label for hypermarkets Plastic Pouch (80 gr. / 2.8 oz) Instant Soup Private label for hypermarkets Plastic Pouch (90 gr. / 3.2 oz.) Dehydrated mashed potatoes with milk

Private label for hypermarkets Flexible container (125 gr. / 4.4 oz.)

Dehydrated mashed potatoes with no milk

Private label for hypermarkets Flexible container (125 gr. / 4.4 oz.)

C) Installed Packing Machinery GMS acquired locally manufactured machinery back in 1998. Pursuant to the 2001 economic collapse, GMS started a machinery replacement process, which was favored by an increase in local demand. Most of the machinery currently installed at GMS comes from Germany. Machinery maintenance is performed by GMS staff, which is trained internally under OEM supervision.

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Information on the most relevant machinery currently in operation at Grupo Matas is as follows: Current Machinery Used Brand Units Origin Average

Age Specification

Broth packing machine Sapal 2 Germany 2 75% Broth packing machine Theegarten 1 Germany 3 75% Packing line machinery N/A 5 Argentina 10 50% Packing and filling machine N/A 5 Argentina 10 50% D) Last Packaging Machinery Purchase The latest piece of equipment purchased by GMS is a broth packing machine, acquired in 2007. The OEM is Theegarten from Germany, and the company paid USD $150,000 for the machinery.

Machinery Brand Country Cost (Approximate) Broth packing machine Theegarten Germany US $150,000 E) Future Packing Machinery Ordering Plans, 2008-2009 GMS has an annual budget of USD $200,000 for new machiney purchases. The main driver for new machinery procurement is the elevated age of the company’s current equipment. At this time, GMS is seeking to buy high-quality and versatile machinery that will help the firm to increase its production capabilities. GMS needs to replace its current broth packing and packing line machinery.


Estimated Budget

Broth packing machine 1 TBD Replacement USD $150,000 F) Purchasing Policies and Financial Arrangements Procurement decisions are made at GMS headquarters, in Villa Nueva, province of Mendoza. The company lacks a supplier database. Purchases are determined based upon its previous knowledge of machinery, and information gathered on new industry developments at major industry shows in Italy and Germany. Pursuant to the information-gathering process, the company requests further references to the OEM in order to see the equipment working. Subsequently, company specialists analyze the equipment’s performance and decide upon the best market option. Grupos Matas buys its machinery from locally based representatives of foreign suppliers, which are usually located in Buenos Aires. To GMS, OEM financing is key. Scarce trade financing options and high interests rates in Argentina require flexibility from OEMs in order to sell their equipment in the local market. G) Factors that Influence Purchasing Decisions

1. Machinery capability and performance. 2. Simple maintenance. 3. Pricing. 4. Brand recognition. 5. OEM financing.

H) Comments on Preferred Brands and Existing Business Arrangements with

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Packing Equipment Suppliers For GMS, an important element in its procurement decisions is the machinery’s capabilities and performance. The country of origin is not that relevant. The firm is currently interested in learning more about U.S. machinery and receiving information from U.S. suppliers. Although local preference for European brands prevails, pricing has become an issue, given the appreciation of the euro against the U.S.dollar. From a pricing perspective, U.S. manufacturers of machinery are currently at an advantageous position with respect to European competitors. Company representatives indicated that their knowledge about U.S. brands is nonexistent. GMS generally buys European machinery due to their adaptability and simple operation. Reportedly, Grupo Matas does not have purchasing agreements of any kind with suppliers.

Origin Technology Flexibility Service Price United States Good Good Poor Very Good

Germany Very Good Very Good Very Good High Italy Very Good Very Good Good High

Argentina Good Good Good Very Good France Good Good Poor High

Brand: Theegarten Strengths: Easy to use and versatile/flexible. Weaknesses: Extremely expensive. I) Trade Show Attendance / Trade Publication Information Company staff attends the Buenos Aires’ Packaging Expo, as well as major industry shows in Germany and Italy. GMS subscribes to the Industrial Directory, and receives publications on packaging and containers. J) Specific Interest Grupo Matas is interested in receiving information on the following machinery:

• Broth packing machines. • Packing line machinery.

K) Contact Information Company Name: Grupo Matas S.A. Contact: Mr. Raul Lencinas Position: Gerente de Compras

(Purchasing Manager) Address: Godoy Cruz 5330

5521 Villa Nueva, Provincia de Mendoza Argentina

Voice: 54-261-4260627 E-Mail: [email protected] Website: www.jmatas.com

http://www.jmatas.com/

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KLEPPE S.A. Industry: Food Sub-industry: Pear and apple production Location: Province of Río Negro, Argentina Size (sales): USD $35 million Purchasing potential:

USD $500,000


Fresh fruit packing machines. Particularly for pears and apples in 10-20 Kg (20-40 lbs.) boxes. Peripheral machinery to fruit-sorting machines (by size & quality).

A) Company Description Kleppe S.A. was established in 1958, and is currently one of Argentina’s leading producers of pears and apples. The company employs 1,500 seasonal workers, and is located in Cipolletti, province of Río Negro, which is approximately 1,350 km (850 miles) from Buenos Aires. B) Main Products Produced and How They Are Packed

Product Brand

Package

Pears Gaucho Carton boxes (10 Kg & 20 Kg) (20 lb. & 40 lb)

Apples Gaucho Carton boxes (10 Kg & 20 Kg) (20 lb. & 40 lb)

C) Installed Packing Machinery Kleppe basically operates fresh fruit-sorting machinery, which classifies the fruit by size and quality. Referenced machines feature peripheral machinery, such as palletizing machines. The technical staff performs basic troubleshooting and maintenance work internally. For serious machinery breakdowns or complex malfunctioning, Kleppe relies upon OEM technical support. The company is located in Patagonia, thus its geographical location demands well-seasoned local representatives who carry a significant stock of spare parts. Current Machinery Used Brand Units Origin Average

Age Specification

Fruit-sorting machine (by size & quality).

Compac 1 New Zealand

1 100%

Fruit-sorting machine (by size & quality).

TIA 1 Argentina 15 80%

D) Last Packaging Machinery Purchase Kleppe’s last purchase took place in June 2007. The company acquired a fruit-sorting machine, which classifies fruit by quality and size. The machinery is manufactured by Compac, and was imported from New Zealand. The Argentine company paid USD $1.5 million for the machine. Prior to this purchase, Kleppe had acquired a similar machine from an Argentine manufacturer.

Machinery Brand Country Cost (Approximate) Fruit-sorting machine (by size & quality).

Compac New Zealand USD $1,500.000

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E) Future Packing Machinery Ordering Plans, 2008-2009 The company has an estimated budget of USD $500,000 for future machinery purchases within the next two years. Reportedly, Kleppe does not have a set budget per se, and still needs to depreciate the last machinery purchase, which represented a significant cost for the company. . Currently, Kleppe needs to improve the technology in its peripheral machinery related to the Argentine (TIA) fruit-sorter, which has an average age of 15 years. Reportedly, the company may purchase a new fruit-sorting machine in the future.


Estimated Budget

Fruit-sorting machine (by size & quality)

1 TBD Increase production

TBD

Peripheral equipment & machinery

1 TBD Replacement of existing

machinery

TBD

F) Purchasing Policies and Financial Arrangements Purchasing decisions are made at Kleppe’s headquarters. It is common practice for company managers to request information and technical specifications on machinery, and to subsequently visit a facility where the machine is being used. After this stage, the purchasing decision process begins. Reportedly, machinery is purchased locally from OEM representatives or distributors. The current financing scenario that the company faces entails a 50% advanced payment, and 50% upon delivery and final machinery adjustments. Kleppe representatives claim that what they really need is direct OEM financing. G) Factors that Influence Purchasing Decisions

1. Technical support. 2. Availability of spare parts. 3. Pricing. 4. Brand recognition. 5. Versatility/flexibility.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Company representatives indicate that they do not have a preference for certain brands, nor do they have purchasing agreements with vendors. Notwithstanding, they say that European firms have a presence in country through representatives or distributors, while the United States has virtually no presence in the marketplace. Kleppe’s plant manager indicated that the company would like to work with U.S. suppliers that can guarantee good after-sales support and spare parts stocking. Further, the company would like to receive information from U.S. suppliers and machinery.

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Kleppe’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price United States Very Good Good Bad Good New Zealand Very Good Very Good Very Good Good

Argentina Good Very Good Good Very Good Spain Good Poor Good High Italy Good Good Good High

I) Trade Show Attendance / Trade Publication Information Company staff frequently attend Sial Mercosur and Tecnofidta trade shows in Buenos Aires. They also attend relevant industry shows in Spain and Germany, as well as the PMA in the United States. Reportedly, these trade shows are the company’s main source of information on machinery and vendors. J) Specific Interest The company is interested in receiving information on the following machinery:

• Fresh-fruit-packing machines, particularly for pears and apples in 10-20 kg. boxes (20-40 lbs.).

• Peripheral machinery and equipment related to fruit-sorting machines. K) Contact Information Company Name: Kleppe S.A. Contact: Eng Jorge Aragón Position: Gerente de Planta

(Plant Manager) Address: O´Higgins 185

8324 Cipolletti, Provincia de Rio Negro, Argentina

Voice: 54-299-4772834 E-Mail: [email protected] Website: www.kleppe.com.ar


http://www.kleppe.com.ar/

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LA PIAMONTESA S.A. Industry: Foods Sub-industry: Inlays and pressed meats (ham, salami,

sausages, bacon, etc). Cold, fresh and frozen cuts of beef and pork.

Location: Province of Córdoba Size (sales): USD $25 million (approximately) Purchasing potential:

Over USD $250,000


High vacuum packing machines for inlays/pressed meats.

A) Company Description Italian immigrant Abelardo Giacosa established the company in 1953. La Piamontesa’s core business is the production of pressed meats, inlays and sausages. Its secondary activity is beef and pork meat processing. Since the early 1970s, the company has systematically incorporated new technology into its operation. In 1988, La Piamontesa started to export its products, and given its success, in 1992, the company had to renew its machinery in order to meet international demand. In 2002, the company added new packaging technology and expanded its production plant. Currently, La Piamontesa is a leading player in Argentina’s pressed meats industry. The company has a production plant of 350,000 square meters and a workforce of 425 employees. B) Main Products Produced and How They Are Packed La Piamontesa packs the following products:

Product Brand Package Pressed meats (sausages, salami, bacon, ham, etc)

La Piamontesa Thermo formed-high vacuum-polyethylene packing.

Pork cuts La Piamontesa Thermo formed-high vacuum-polyethylene packing.

Beef cuts La Piamontesa Thermo formed-high vacuum-polyethylene packing.

C) Installed Packing Machinery La Piamontesa has machinery from various origins, such as German and Argentine. The most relevant installed machinery includes: Current Machinery Used Brand Units Origin Average

Age Specification

Packing machine Sergio Catalán 2 Argentina 8 years 80% Packing machine Multivac 3 Germany 12 years 90%

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D) Last Packaging Machinery Purchase The last machinery purchase took place in 2007. At the time, the company bought a thermo-forming machine to replace the line’s original section. The machinery was a Multivac, from Germany. The purchase amount was USD $200,000.

Machinery Brand Country Cost (Approximate) Thermo-forming section Multivac Germany USD $200,000 E) Future Packing Machinery Ordering Plans, 2008-2009 La Piamontesa has a budget of USD $250,000 for machinery procurement. The company is currently considering adding new packaging technology to complement its current lines. A company representative indicated that the company’s increasing export activity demands new investments in technology.

Machinery Units Origin Reason for Purchase Estimated Budget High vacuum packing line

1 TBD Increase production TBD

F) Purchasing Policies and Financial Arrangements Machinery purchases are conducted through local representatives. Reportedly, Multivac (formerly Anseática) has a long-standing relationship with the company, and provides excellent service. A company representative indicates that once a year, machinery suppliers provide equipment servicing. Maintenance staff conducts monthly maintenance on all machinery. Prior to any machinery purchase, La Piamontesa requests commercial references and visits a facility in which the machine is being used. Subsequently, cost, equipment performance, supplier payment and financing terms are analyzed. The company’s board decides upon machinery procurement and negotiates payment terms on a case-by-case basis. Reportedly, direct supplier financing would be the ideal case-scenario for this company. G) Factors that Influence Purchasing Decisions

1. Brand recognition. 2. Reliability. 3. Technical support in Argentina. 4. Pricing. 5. Versatility/flexibility.


Packing Equipment Suppliers The company lacks purchasing agreements with suppliers. A company representative indicates that European machinery is known for featuring reliability and performance; however, current costs are too high. The strengthening of the euro makes future purchases of German equipment unlikely. A La Piamontesa representative was unfamiliar with U.S. machinery manufacturers. However, he believes that the depreciation of the U.S. dollar could favor machinery exports from the U.S. to Argentina.

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La Piamontesa’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price Unites States N/A N/A N/A N/A

Argentina Good Good Very good Adequate Italy Excellent Good Very good High (expensive)

Germany Excellent Good Very good High (expensive) I) Trade Show Attendance / Trade Publication Information Company directors attend all industry trade shows in the world, such as Germany’s IFFA , Italy’s Eurocarne and Spain’s Tecnoalimentari. Company management plans to attend Chicago’s AMI Fair in 2009. The company is an exhibitor at Tecnofidta in Argentina. OEMs or agents usually provide information on new technologies. J) Specific Interest La Piamontesa is interested in receiving information on the following machinery:

• Pressed meats / inlays high-vacuum packing machinery. K) Contact Information Company Name: La Piamontesa S.A. Contact: Sr. Jorge Garnero Position: Gerente de Planta

(Plant Manage Address (Industrial Plant):

Güemes y Mármol – Brinkman – (X2419) Provincia de Córdoba, Argentina

Voice: 54-3562-48-0142 E-Mail: [email protected] Website: www.lapiamontesa.com


http://www.lapiamontesa.com/

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LHERITIER ARGENTINA S.A. Industry: Foods Sub-industry: Candy, snacks and ice cream

ingredients Location: City of Buenos Aires Size (sales): USD $20 million Purchasing potential:

USD $1 million


Wrapping and bagging machines for candy

A) Company Description Juan María Lheritier and Don Juan Orsi established the firm in 1896 in San Carlos Norte, province of Santa Fe. In 1919, Lheritier transformed the firm into a family owned business by acquiring Orsi’s share of the company. In 1958, Lheritier invested heavily in manufacturing technology of German, Italian and British origin. The firm is known for its candy, and later expanded to the production of lollypops. Lheritier started exporting in 1967. Currently, the firm’s exports reach 20 world markets in the Americas, Europe, the Middle East and Africa. Lheritier’s original lollypop flavors and formats are widely sold in the abovementioned markets. B) Main Products Produced and How They Are Packed Information on Lheritier’s products is as follows:

Product Brand Package Lollypops Pico Dulce Container (8 units of 14 gr. ea.), blister (5 units

of 14 gr. ea.), Can (110 units). Lollypops Pito Paper wrapping and carton box (12.5 gr.) Candy Cebollistas Plastic bag (120 units, 6 gr.) Snacks Marrakesh Paper wrapping, case (12 units of 50 gr. each) Nougat / comfitures Lheritier Polyethylene bag Ice cream / confectionery Anastasia,

Ikebana Polyethylene bag (400 gr.) and plastic container

C) Installed Packing Machinery Installed machinery includes brands from Germany, Italy, Japan and Brazil. Information on relevant installed machinery is as follows: Current Machinery Used Brand Units Origin Average

Age Specification

Wrapping machine Forgrobe 1 Germany 25 70% Wrapping machine Rose 2 Italy 20 75% Bagging machine Fabrima 3 Brazil 5 80% Coding machine Imaje 3 France 7 75% Wrapping machine PFM 1 Italy 8 90% Weighing machine Yamato 2 Japan 4 90%

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D) Last Packaging Machinery Purchase The latest purchase was a bagging machine manufactured by Sabrima in Brazil. In the past three years, Lheritier has invested USD $700,000 in new bagging machines.

Machinery Brand Country Cost (Approximate) Bagging machine Fabrima Brazil N/A E) Future Packing Machinery Ordering Plans, 2008-2009 The firm has an annual budget of USD $1 million for new machinery procurement. The driving force for new machinery acquisitions and technology investments is the demand from international markets. Thecompany plans to purchase four new wrapping machines in the short term, most likely of Brazilian origin. Machinery Units Origin Reason for

purchase Estimated

budget Wrapping machines

4 TBD (probably from Brazil) Increase production

USD $1 million

F) Purchasing Policies and Financial Arrangements Machinery procurement is channeled directly through the OEM, who usually is involved with the equipment’s installation. For European machinery purchases, operations are generally performed through local representatives. In general, the company evaluates machinery and suppliers prior to making a purchase. However, when there is a significant increase in demand, the analysis is minimum. The goal is to fulfill clients’ demands for Lheritier’s products. Purchasing decisions are made in Buenos Aires. Payment terms are negotiated on a case-by-case basis with each supplier. The company has procured machinery using direct supplier financing and, on occasion, has paid in cash. Credit lines from the banking industry are too expensive and burdensome. G) Factors that Influence Purchasing Decisions

1. Pricing. 2. Brand recognition. 3. Technical support in Argentina. 4. Reliability. 5. Versatility/flexibility.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers A Company representative notes a preference for European brands, especially from Germany, Italy and Japan (Forgrobe, PFM or Rose). However, the cost of Brazilian machinery is much more accessible, and therefore, is the preferred option under the current economic scenario. Although the quality of Brazilian machinery is significantly lower than European equipment, the cost of four Brazilian machines is equal to the cost of one machine from Italy. A company representative indicates that German machinery is highly regarded for candy packing. At Lheritier, they are unfamiliar with U.S. technology, and therefore cannot make a judgment. The company lacks purchasing agreements with suppliers.

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Lheritier’s machinery evaluation based on country of origin is as follows:


Brazil Good Good Good Adequate Italy Excellent Very good Very good High (expensive)

Germany Excellent Good Very good High (expensive) I) Trade Show Attendance / Trade Publication Information Company directors attend international trade shows, such as Germany’s ISM, Anuga, Interpack and All Candy in Chicago. Information on new machinery is obtained from the Internet, from OEMs or agents. J) Specific Interest Lheritier is interested in receiving information on the following machinery:

• Wrapping machines • Candy bagging machines.

K) Contact Information Company Name: Lheritier Argentina S.A. Contact: Eng. Luis Tosolini Position: Gerente de Planta

(Plant Manager) Address (Industrial Plant):

Moreno 499 (530BBXI) San Carlos Centro - Santa Fe, Pcia. de Santa Fe, Argentina.

Voice: 54-3404-42-0708 Address (Commercial Office):

Av. Belgrano 1586 9° piso (C1093AAQ) Ciudad de Buenos Aires, Argentina

Voice: 54-11-4139-4546 E-Mail: [email protected] Website: www.lheritier.com.ar


http://www.lheritier.com.ar/

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MOLINOS CAÑUELAS S.A. Industry: Food Sub-industry: Flour, premix, sunflower oil, biscuits,

pasta, food additives, batters Location: Province of Buenos Aires Size (sales): Over USD $100 million Purchasing potential:

USD $750,000 (2008)


Palletizing machinery, Box-forming machines, powder and liquid filling machines, box handling robots and premix production machinery.

A) Company Description Molinos Cañuelas (MC) was established in 1931. The company is Argentina’s top flour exporter and one the world’s leading flour producers. Since 1996, MC also manufactures, refines, bottles and distributes crude oil. MC carries its own brands and also is a supplier of private-label products for hypermarket chains, such as Wal*Mart, Carrefour and Grupo Casino, a leading chain headquartered in the province of Córdoba. The company has six industrial plants that are strategically located throughout Argentina. MC’s main bottling and containerizing plant is located in Cañuelas. MC currently exports to more than 35 countries. Its top markets are the Netherlands, France, Belgium, Australia, the United States, Canada and Colombia. MC also owns a logistics and distribution company, called Molca S.A. Molino Cañuelas features five product divisions; flour, edible oil, biscuits, dry pasta and private labels for hypermarkets. B) Main Products Produced and How They Are Packed

Product Brand Package Flour Pureza y Cañuelas Paper bag (1 Kg. / 352 oz.) Premix Mamá cocina Paper bag (500 gr. / 176 oz.) Sunflower oil Cañuelas Plastic bottle (1L / 33.8 Fl oz.) Biscuits 9 de Oro y Paseo Two and three tear

Polypropylene laminated film Additives Rinde Más Laminated film Batters Mamá Cocina Laminated film Pasta Múltiple Laminated film and carton

boxes (200 gr. / 7.04 oz.)

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C) Installed Packing Machinery The average age of MC’s machinery is six years. Most of its equipment is of European origin, and its maintenance is performed by skilled technicians trained within the company. Current Machinery Used Brand Units Origin Average

Age Specification

Filling Machines Italpack 4 Italy 7 80% Palletizing Machine N/A 1 Germany 3 80% Laminating Machine Masipack 5 Brazil 7 80% Coding Machines N/A 5 USA 6 80% D) Last Packaging Machinery Purchase The latest equipment purchase took place in May 2006. At the time, MC bought a laminating machine of Brazilian origin manufactured by Masipack. MC paid USD $90,000 for the machine. In 2005, MC purchased a palletizing machine of German origin.

Machinery Brand Country Cost (Approximate) Laminating Machine Masipack Brazil USD $90,000 E) Future Packing Machinery Ordering Plans, 2008-2009 MC allocates between USD $500,000 and USD $1 million per year to procure new machinery. Future procurement is driven by the need to increase production through technology and automation. The company prefers to buy machinery that easily adapts to its production needs. The following table illustrates MC’s future demand for machinery.


Estimated Budget

Box Forming Machine


USD $250,000

Palletizing Machine


USD $250,000

Although MC has not determined the origin of future packaging machinery purchases, it is likely that they will import this machinery from Europe. F) Purchasing Policies and Financial Arrangements Procurement decisions for new machinery take place in Buenos Aires. The company’s Executive Board receives a machinery investment plan. The proposal is analyzed and decisions are made based upon the company’s growth and increase in exports. Once the board approves future machinery purchases, the analysis of potential suppliers takes place. Reportedly, MC has a supplier database and new additions are welcome. To this end, plant and purchasing managers attend major industry shows in Argentina, Germany and Brazil. While at the fairs, company representatives contact OEMs and analyze machinery productivity, as well as competitive advantages, on a base-by-case basis. According to a company representative, MC purchases directly from OEMs. MC’s purchasing policy contemplates acquiring machinery through leasing or by paying in cash. That said, flexible financial terms by the supplier are extremely important for this company.

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G) Factors that Influence Purchasing Decisions

1. Functionality/operability. 2. Flexibility. 3. Technical support. 4. Easy access to spare parts. 5. Pricing.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers MC has a preference for European machinery, mainly due to its familiarity with European brands and the abundant information that they receive from suppliers. Furthermore, in-country representatives of European brands are in frequent contact with MC and often invite key MC personnel to major industry shows. Reportedly, MC procures Brazilian machinery because of their quality, zero percent customs duty under Mercosur, and convenient geographical location. MC representatives say that the company does not have arrangements with suppliers for future purchases. Reportedly, procurement of future machinery and suppliers will be analyzed and chosen on a case-by-case-bases. MC representatives admit to having very little knowledge about U.S. suppliers; therefore, they are not in a position to judge machinery of U.S. origin nor its attributes at this time. With regard to European machinery, Italy is said to compete with Germany by providing machinery of similar capabilities at lower prices. The following table illustrates MC’s evaluation of machinery based on the country of origin:


Germany Excellent Very Good Very Good High Italy Good Good Good High

Brazil Very Good Very Good Very Good Intermediate I) Trade Show Attendance / Trade Publication Information MC staff attends industry shows in Germany, Argentina and Brazil. Company representatives also visit the Anuga Fair in Germany, the Apas and Abras Fairs in Brazil, and the Food & Beverage Show in Miami. MC subscribes to a leading Argentine industry publication called, Enfasis Packaging. J) Specific Interest MC is interested in receiving information on the following machinery and equipment:

• Palletizing machinery. • Box-forming machines. • Powder and liquid filling machines. • Box handling robots. • Premix production machinery.

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K) Contact Information Company Name: Molino Cañuelas Contact: Mr. David Vainman Position: Gerente de Máquinas y Planta

(Machinery and Plant Manager) Address: Kennedy 160

1814 Cañuelas, Pcia. de Buenos Aires Argentina

Voice: 54-2226-421002 E-Mail: [email protected] Website: www.molinocanuelas.com


http://www.molinocanuelas.com/

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MOÑO AZUL S.A.C.I. y A. Industry: Foods Sub-industry: Fresh fruit (apples, pears, lemons,

cherries, peaches, kiwis and juices) Location: Province of Neuquén Size (sales): USD $40 million Purchasing potential:

USD 1 million


Fruit sorting machine (by size and weight)

A) Company Description Mr. Rafael Grisanti established Moño Azul in 1961 in the province of Río Negro, Patagonia. At the time, the company was mainly an apple producer. Shortly thereafter, the firm started to expand by incorporating new fruits under its portfolio, such as apples, pears, lemons, cherries, peaches and kiwis. Currently, the company sells 5 million boxes of fruits each year. Sixty percent of its production is exported to the United States, Brazil and Europe; the remaining 40% is consumed by Argentina’s internal market. The company manufactures its own wooden cases for fruit packing. In October 2007, the Italian Group Expofrut acquired the firm. B) Main Products Produced and How They Are Packed Moño Azul’s fruits are packaged by size in wooden cases.

Product Brand Package Fresh fruit (apples, pears, lemons, cherries, peaches, kiwis and juices)

Moño Azul Wooden case (10 - 20 Kg)

C) Installed Packing Machinery Machinery currently installed at Moño Azul has an average age of 15 years. Most of the machinery is of Italian and Argentine origin. The company’s machinery is mainly composed of fruit sorting machines. The equipment classifies the fruit by weight and size. The most relevant installed machinery includes: Current Machinery Used Brand Units Origin Average

Age Specification

Sorting machine Mecagri 2 Italy 20 80% Sorting machine Unitech 2 Italy 10 80% Sorting machine Prodol 1 Argentina 10 80% D) Last Packaging Machinery Purchase The company has not made significant machinery investments in the last three years. The last fruit sorting machine purchase took place in 1998, from the Argentine manufacturer Prodol.

Machinery Brand Country Cost (Approximate) Fruit sorter Prodol Argentina USD $700,000

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E) Future Packing Machinery Ordering Plans, 2008-2009 Given the elevated average age of its existing machinery and the recent acquisition by the Italian Group Expofrut, procurement of new fruit sorting machinery is forthcoming. The current budget for future machinery purchases exceeds USD $1 million. The origin of the machinery has not yet been determined; however, it is likely that it will be manufactured in New Zealand or Australia. Machinery Units Origin Reason for

Purchase Estimated

Budget Fruit sorting machine

TBD TBD (preferably Australia or New Zealand)

Incorporate newer technology

USD $1 million (+)

F) Purchasing Policies and Financial Arrangements A Moño Azul representative indicates that packing machinery procurement is channeled directly through that manufacturer. Occasionally, the local representative will take part in the process. Company personnel install the machinery and also provide maintenance services. The company’s offices in Argentina and the corporate headquarters in Italy make purchasing decisions jointly. The company usually procures equipment with credit from a banking institution. That said, given that credit lines are scarce, too expensive and burdensome to engage, supplier financing is highly desirable. A company representative indicates that the universe of global fruit machinery suppliers is relatively small; therefore, the vendor selection process is simple. Also, it was noted that local representatives must have good after-sales service and deliver solutions rapidly when machinery breakdowns occur. G) Factors that Influence Purchasing Decisions

1. Technical support in Argentina is a must. 2. Pricing. 3. Reliability. 4. Availability of spare parts.


Packing Equipment Suppliers Moño Azul prioritizes local presence of foreign suppliers and solid after-sales support with quick turnaround on unexpected machinery breakdowns. A company representative indicates that Australia and New Zealand are at the forefront of fruit sorting machinery manufacturing. New Zealand’s top brand is Compac, which represents high quality and cutting-edge technology. In 2004, Compac formed a strategic alliance with the Italian firm Sorma for in-line fruit sorting machinery. Currently, the firm has a representative in Uruguay. The company lacks purchasing agreements and would like to receive information from U.S. suppliers despite the fact that they are unfamiliar with U.S. brand names and technology.

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Moño Azul’s evaluation of machinery based on country of origin follows:

Origin Technology Flexibility Service Price United States N/A N/A N/A N/A New Zealand Excellent Very good Very good High (expensive)

Australia Excellent Very good Very good High (expensive) Argentina Very good Good Good Intermediate

Italy Very good N/A Very good High (expensive) I) Trade Show Attendance / Trade Publication Information The company does not attend international trade shows. Moño Azul commonly receives product material from suppliers and local representatives. The firm does not subscribe to industry publications. J) Specific Interest The company is interested in receiving information on the following machinery:

• Fruit sorting machines (by weight and size). K) Contact Information Company Name: Moño Azul S.A.C.I. y A. Contact: Eg. Adrián Echeverría Position: Ingeniero de Planta

(Plant Engineer) Plant Address: Vista Alegre Norte, Ruta Provincial

7 Km 29 (8309) – Provincia de Neuquén

Address (Commercial) Tucumán 117 8° C1049AAC), Buenos Aires Argentina

Voice: 54-299-4891092 E-Mail: [email protected] Website: www.mazul.com.ar


http://www.mazul.com.ar/

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PRODUCTOS LIPO S.A. Industry: Foods Sub-industry: Candy and sweets Location: Province of Buenos Aires Size (sales): USD $12 million Purchasing potential:

USD $200,000 (+)


Candy wrapping and bagging machines.

A) Company Description Productos Lipo is a family-owned business that was founded in 1969 as a boutique candy producer. The company currently features an 80,000-square-meter production facility, 110,000 square meters of storage space, and employs 160 people. Lipo is a major supplier and exporter of candy and sweets to Mercosur countries, North and Central America, Africa, Asia and Europe. B) Main Products Produced and How They Are Packed Lipo’s portfolio features the following products:

Product Brand Package Candy Gajitos, Lipo Polyethylene bag (907 gr.), corrugated carton box (12

bags per box). Lollypop Wamis Polyethylene bag (50 units of 500 gr. ea.), carton boxes

(12 bags per box). Pillow Pack American Ice, Fizz Paper wrapping, polyethylene bag C) Installed Packing Machinery Installed machinery includes brands from Germany, France and Brazil (Masipack and Tavares). Information on relevant installed machinery is as follows:


Specification

Wrapping machines Nagema 8 Germany 10 90% Wrapping machines Tavares 10 Brazil 5 90% Coding machines N/A 5 France 5 90% Wrapping machine (Packinal) Masipack 3 Brazil 4 90% D) Last Packaging Machinery Purchase The latest purchase was a bagging machine manufactured by Masipack from Brazil. The transaction took place in 2006, and the machinery price was USD $200,000. In 2005, the company bought Tavares wrapping machines, also manufactured in Brazil.

Machinery Brand Country Cost (Approximate) Bagging machine Masipack Brazil USD$ 200,000

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E) Future Packing Machinery Ordering Plans, 2008-2009 The company does not have an approved budget for machinery procurement yet. A Lipo representative indicates that new wrapping and bagging machines will be needed in the next couple of years to meet export-driven increased demand. He anticipates that the investment will be in the USD $200,000 range. Further, it is likely that the machinery to be procured will be manufactured in Brazil, as competitive pricing and availability of parts are ensured.


Estimated Budget

Candy bagging machines

1-2 TBD (probably Brazil) Increase production

USD $200,000 (+)

F) Purchasing Policies and Financial Arrangements Packing machinery procurement from Brazil is channeled directly through the OEM. For purchases of European machinery, the transactions are generally performed through local representatives. Manufacturers usually collaborate with the firm during the equipment’s installation. They also provide training to Lipo’s personnel. Maintenance is performed internally. Purchasing decisions are made in Buenos Aires. The company constantly analyzes new machinery and industry technological advances prior to determining which equipment will be procured. That said, pricing is usually the most important element in the decision process. Purchasing transactions are commonly done in cash; 50% advanced payment, and the outstanding paid upon delivery of the machinery. The company is very interested in obtaining financing plans with its suppliers. Credit lines from the banking industry are scarce, and too expensive and burdensome to obtain. G) Factors that Influence Purchasing Decisions

1. Pricing. 2. Brand recognition. 3. Technical support in Argentina. 4. Reliability. 5. Versatility/flexibility.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers A company representative commented on the good quality of European machinery and acknowledges that they are often too expensive for Argentine buyers. The company has progressively increased its machinery purchases in Brazil because it feels that costs for German machinery are too high. Lipo’s representative adds that Brazilian machinery represents a good option from a pricing perspective, even though the quality is not as good. U.S. machinery is perceived as being well suited for the job. However, the major impediment for buying U.S. brands is that they lack local representation. Current economic conditions favor the market entrance of U.S. machinery into Argentina. A Lipo representative believes that though Brazilian machinery benefits from Mercosur’s zero percent duty, Argentina’s inflation could balance current machinery prices and eventually favor imports of U.S. machinery into Argentina. Lipo lacks purchasing agreements that could limit their supplier selection for packaging machinery.

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Lipo’s machinery evaluation based on the country of origin is as follows:

Origin Technology Flexibility Service Price United States Very good Good Bad High (expensive)

Brazil Very good Very good Very good Adequate Italy Excellent Very good Very good High (expensive)

Germany Excellent Good Good High (expensive) I) Trade Show Attendance / Trade Publication Information The company exhibits at major international trade shows, such as Germany’s ISM, All Candy Expo in Chicago and Confitexpo in Mexico. The firm does not subscribe to specialized publications other than Argentina’s Industrial Guide. J) Specific Interest Lipo is interested in receiving information on the following machinery:

• Candy/sweets bagging machines. • Candy/sweets wrapping machines.

K) Contact Information Company Name: Productos LIPO S.A. Contact: Sr. Carlos A. Grimaldi Position: Gerente de Planta

(Plant Manager) Address (Industrial Plant):

Dr. L. Guarracino 2328 (B1826GDF) Lanús (E) Pcia. de Buenos Aires - Argentina

Voice: 54-11-4225-3700 E-Mail: [email protected] Website: www.productoslipo.com


http://www.productoslipo.com/

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BRIOSH S.A. (Valente) Industry: Foods Sub-industry: Bakery Location: Province of Buenos Aires Size (sales): USD $8 million Purchasing potential:

USD $150,000


Packing machinery for bakery/pastry products.

A) Company Description Briosh-Valente is a family-owned business of Italian descent that was established at the turn of the 20th Century. The firm employs 70 people and is highly regarded for its baked goods. The company has a countrywide distribution network that reaches most of Argentina’s provinces. The company’s annual sales reached USD $8 million last year. Briosh-Valente is interested in receiving information on packaging machinery for bakery and pastry products. B) Main Products Produced and How They Are Packed Information on Briosh-Valente’s products is as follows:

Product Brand Package Christmas pudding Valente Polypropylene bag (1 unit – 700 gr.) in corrugated

carton box (6 units). Venetian pudding Valente Polypropylene bag (1 unit – 500 gr.) in corrugated

carton box (6 units). Biscuits Valente Polypropylene bag (12 units) in corrugated carton box

(24 units). Pudding Valente Polypropylene bag (1 unit) in corrugated carton box (12

units) Muffin Valente Polypropylene bag (10 units) Tartlet Valente Blister (35 units) in corrugated carton box (12 units) Sponge cake Valente Thermo formed tray, polypropylene wrapping in

corrugated carton box (750 gr. Ea.) C) Installed Packing Machinery The company features machinery from Italy and Germany. The average age of the machinery is seven years. Information on Valente-Briosh’s most relevant installed machinery is as follows:


Specification

Packing machine (biscuits) Back-Tech 1 Germany 10 90% Packing machine (pudding) Back - Tech 1 Germany 5 90% Packing machine (Christmas pudding)

Tecnopac 2 Italy 5 100%

Package filling machine (biscuits)

Alimec 1 Italy 10 90%

Packing machine (other products)

Cramsa 2 Argentina 8 90%

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D) Last Packaging Machinery Purchase Valente-Briosh’s last machinery purchase took place in 2005. At the time, the company had acquired a Tecnopac packing machine for Christmas puddings from Italy. Previously, the company purchased an Argentine packing machine manufacturerd by Cramsa.

Machinery Brand Country Cost (Approximate) Packing machine (Christmas pudding)

Tecnopac Italy USD $35,000 (+)

E) Future Packing Machinery Ordering Plans, 2008-2009 The company does not have a set budget for future machinery purchases. However, Briosh-Valente plans to invest USD $150,000 in new packaging machinery to replace its outdated existing machinery.


Estimated Budget

Packing machines for bakery/pastry products

1-2 TBD Replace existing machinery

TBD

F) Purchasing Policies and Financial Arrangements The company’s purchasing decisions are made in Buenos Aires. The company buys European and Argentine equipment directly. The company’s staff performs the installation of new machinery with guidance from the manufacturer. Also, the OEM provides training to the technical staff. Due to the close ties of the company owners with Italy, they have access to trade finance. For purchases of locally manufactured machinery, the company typically performs a 50% advanced payment and pays the outstanding payment upon delivery and installation of the machinery. A company representative indicates that pricing, simple machinery operability, and brand recognition are key factors in the purchasing decision process. G) Factors that Influence Purchasing Decisions

1. Brand recognition. 2. Pricing. 3. Simple machinery operability. 4. Easy maintenance. 5. Machinery quality.

H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Company owners have a natural preference for Italian machinery. Most preferred brands include Tecnopac and Alimec. Briosh adds that the firm acquired its Cramsa machinery, which is manufactured in Argentina, due to its low cost. The company lacks purchasing agreements with suppliers. Briosh-Valente also believes that German machinery is of good quality and technology. However, the machinery is expensive due to euro-denominated prices. The company is not concerned about machinery flexibility, as its product presentations are similar. Briosh-Valente thinks highly of the U.S. brand name Doboy, (currently owned by Bosch). In general, the firms believes that U.S. machinery has performs well..

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The company’s machinery evaluation based on country of origin is as follows:

Origin Technology Flexibility Service Price United States Very good N/A Good Good

Germany Excellent N/A Very good High (expensive)Italy Excellent N/A Very good High (expensive)

Argentina Very good N/A Very good Affordable I) Trade Show Attendance / Trade Publication Information Company staff attends the Tecnofidta and SIAL Mercosur trade shows. They do not participate in international trade shows. Information on new industry developments is received from OEMS or from local representatives directly. J) Specific Interest The company is interested in receiving information on the following machinery:

• Packing machinery for bakery/pastry products. K) Contact Information Company Name: Valente-Briosh Contact: Sr. Leandro Vega Position: Jefe de Mantenimiento

(Maintenance Manager) Address (Industrial Plant):

Concejal José Hernández 280 (1748) General Rodríguez, Pcia. de Buenos Aires, Argentina

Voice: 54-237-484-4000 E-Mail: [email protected]: www.valente-briosh.com


http://www.valente-briosh.com/

iv. the food industry 4.1. industry trends

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