This is a best prospect industry sector for this country.  Includes a market overview and trade data.
Last Published: 10/17/2019

With Mexico’s significant packaged goods production, packaging machinery is a best prospect industry sector in Mexico. This section includes a market overview and trade data on the sector.

Overview

The Mexican packaging machinery market is very dynamic, as it grows and diversifies with the Mexican economy. Primary (processing), and secondary (handling) packaging equipment purchases have been growing about 5 percent per year, due in part to strong foreign direct investment in the food processing industry. The packaging machinery industry provides good opportunities for U.S. exporters. According to the Packaging Machinery Manufacturers Institute (PMMI), Mexico is the second-largest buyer of U.S. packaging equipment, with Germany and Italy serving as other important suppliers.

In 2017, the most recent year for which data are available, the packaging material production industry represented 1.7 percent of Mexico’s GDP, 5.8 percent of the industrial sector GDP, and 8.5 percent of manufacturing GDP. In terms of 2017 volume, Mexico produced 11.9 million tons of packaging containers and packaging materials with a value of USD 14.6 billion.

In the table below, we show the size of the Mexican market for production of packaging materials to highlight the production trends relevant for U.S. sellers of packaging machinery. The subsequent table shows Mexican packaging machinery imports. Although the second table shows declining U.S. exports 2014–2017, the ten-year period starting in 2008 saw significant year-to-year fluctuation in exports from supplier countries. U.S. sales in 2015 reflected an historic high for U.S. packaging machinery exports to Mexico—a whopping 35 percent of all Mexican purchases. Sales returned to more usual levels in 2016 and 2017. Italy, Germany, Japan, and Spain post percentage gains and losses against the United States in any given year, but U.S. suppliers have remained competitive in this industry, and we recommend continued action to maintain market share.

Mexico Packaging Materials Market Size*
(Figures in USD Billions)
 2015201620172018
Total Imports678.1696.1757.6764.1
Imports from the U.S.239.4182.8150.9155.00
Exchange RateN/AN/AN/AN/A
*This table covers Mexican packaging machinery imports.
**Data originally reported in USD.
Source: Association for Packaging and Processing Technologies (PMMI) with Mercado Integrado Latinoamericano (MILA), Mexican Customs, and Secretariat of Economy.


Market Entry

The best way for U.S. suppliers of packaging machinery to enter the Mexican market is through representation or regional distribution, with a partner that can offer after-sales service, maintenance, and spare parts on-site and in Spanish.


Barriers

U.S. packaging exporters have faced several challenges in Mexico over the last few years, and 2019 will be no exception. Competition in this sector is increasing, and a strong dollar makes U.S. equipment more expensive vis-à-vis European equipment (though cost is often secondary to other purchasing decisions). Because of tightening domestic markets, European and Asian companies are increasingly offering customization and payment terms to compete and gain market share in the Mexican packaging machinery market. Offering financing options to Mexican buyers greatly enhances the competitiveness of the offerings from U.S. packaging machinery manufacturers.

Mexican small and medium-sized companies tend to perceive U.S.-made equipment as designed only for large-scale production. Additionally, they believe that U.S. companies have rigid sales policies which do not allow for customization. Finally, Mexican buyers believe that U.S. industrial equipment generally has higher-than-average energy consumption. These perceptions create specific hurdles for U.S. equipment sales.


Leading Sub-Sectors

According to the Mexican Association for Bottling and Packaging (Asociación Mexicana de Envase y Embalaje or AMEE), paper, cardboard, and plastic remain the most dynamic materials used by all industries that utilize packaging products.

Mexico Packaging Material Demand by Type
Packaging MaterialPercentage Demand
Paper & Cardboard34%
Plastic28%
Glass20%
Metal18%
Wood0%
Source: Asociación Mexicana de Envase y Embalaje
Concerning end-use segments for packaging equipment, the food and beverage industries exhibit the greatest demand for packaging materials, representing 58 percent of Mexican packaging machinery imports by value. This is followed by machinery for general packaging (14%), for personal care products (7%), and for pharmaceuticals (6%).


Opportunities

Major opportunities for U.S. companies exist in processing equipment and materials for the food and beverage industry, and for plastic container manufacturers. The U.S. Commercial Service Mexico is happy to assist you in exploring opportunities in this sector.

Mexico’s market evolution is leading to demand for higher quality materials and production standards in the packaging sector. For instance, 63 percent of food products utilize flexible packaging which is recording growth rates of over 10 percent per year. Companies involved in food processing and agribusiness (Tyson, Bachoco, Driscolls, Sunny Ridge, etc.) are demanding better and greener packaging technology. In most cases, flexible packaging is designed to help extend the shelf life of food products or to fulfill other market trends such as higher quality graphics. In addition, major retailers such as Walmart often demand that packages take up less space on the shelf. Innovation and flexibility are key to acquiring a competitive edge in packaging machinery sales in Mexico.

Many companies are looking at glass packaging, given its competitive prices compared to plastic containers, as well as its environmentally-friendly manufacturing process.
Despite the relatively high cost of European packaging products compared to U.S. equipment, Mexican companies regularly choose European solutions due to the barriers mentioned above, stronger after-sales service from European service centers in Mexico, and the flexible financing options that European competitors provide. This leads some Mexican customers to adapt European equipment to local needs rather than choosing what may be a better priced and better designed U.S. solution for the Mexican market.
U.S. firms should keep these critical points in mind, while continuing to take advantage of the U.S. reputation for innovative technology, geographic proximity, and the close bilateral trade relationship.


Web Resources

Organizations 
Packaging Machinery Manufacturers Institute (PMMI)www.pmmi.org
Mexican Packaging Association (AMEE)www.amee.org.mx
Institute of Packaging Professionals (IOPP)www.iopp.org
Mexican Institute of Packaging Professionals (IMPEE)http://envaseyembalaje.com.mx
Chamber of the Food Industry of Jalisco (CIAJ)www.ciaj.org.mx
Centro de Innovación Diseño Empaque (ABRE)http://www.udem.edu.mx/Esp/Investigacion-y-Desarrollo/Centro-Innovacion-Diseno-Empaque-ABRE/Pages/Informacion-General.aspx
Magazines 
Enfasis Packagingwww.packaging.enfasis.com
El Empaque + Conversionwww.elempaque.com
EnvaPackwww.envapack.com
Industria Alimenticiawww.industriaalimenticia.com


Events


Contacts

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

Juan Herrera
Commercial Specialist
U.S. Commercial Service—Guadalajara
Tel.: +52 (33) 3615-1140 ext. 103
Juan.Herrera@trade.gov

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.