PET packages dominate the sector, with different dispensers and child-proof security screw lid tops.

Transcription

1 VII. The Personal Care Industry 7.1. Industry Trends The personal care industry has been growing at an average annual rate of 11% during the past four years. In 2007, the personal care industry sold USD $1.4 billion, importing USD $278 million and exporting only USD $56 million. The industry has been affected by Chinese imports, which caused its sales to drop by one third in value during The national market is importing lots of inexpensive, relatively low quality Chinese packaging products, which are affecting local production and the market. PET packages dominate the sector, with different dispensers and child-proof security screw lid tops Key Players According to Gémines Consultores, a research company, there are approximately 50 personal care product manufacturing companies; 60% of them are foreign or multinational companies. The companies that manufacture and commercialize natural products, mainly lotions, represent 25% of total sales of the Chilean personal care industry. Approximately 10 companies are exporting their goods. Some companies in the personal care sector have their own stores, but they usually are interested in distributing through pharmacy chains, which is the most important distribution channel, followed by supermarkets. Body Deodorants Total sales US$ 46 million Others 24% Unilever 50% Beiersdorf 8% Colgate- Palmovile Chile 18% Source: Press reports Note: Unilever: Axe, Dove, Rexona / Colgate-Palmovile Chile: Speed Stick, Lady Speed Stick / Beiersdorf: Eucerin, Nivea Deo, Hidrofugal

2 Soap Total Sales US$35 million Durandin 14% Labach 8% Other 28% Unilever 50% Source: Press reports Note: Unilever: Dove, Rexxona, Le Sancy / Durandin: Simond's Familand, Babyland / Labach: Ballerina Tooth Paste Total sales US$39 million Others 6% Glaxo Smithkline 16% Unilever 50% Colgate Palmolive Chile 28% Source: Press reports Note: Unilever Pepsodent / Colgate-Palmolive Chile: Colgate / Glaxo: Aquafresh, Sensodyne Shampoo Total Sales US$58 million Unilever 18% Durandín 14% Others 36% P&G 32% Source: Press reports Note: P&G: Pantene, Head & Shoulders / Unilever: Sedal, Dove / Durandín: Simond s, Familand, Pilotonic 7.3 Top Products and Their Packaging Needs The globalization of personal hygiene and cosmetic product manufacturers, the drive for economies of scale, and a wide variety of imported products have spurred Chilean packaging converters into becoming regional suppliers of laboratories and have driven direct exports. Manufacturers and laboratories import most of their ingredients.

3 The two above statements show both the demand for outside packaging materials and the need for packaging equipment by the producers in Chile. Among the trends, some that stand out include the following: New formats and sophisticated designs in glass containers. Breakthroughs in plastics for products with high demand. Transparent self-adhesives and coupon-type labels (two or more faces in order to include more information, and for promotions). New aerosol valves integrated into the package designs, which eliminates lids. Greater use of flexible, stand-up pouches as alternatives to rigid plastic packages. 7.4 Company Profiles Sanibel laboratory S.A Industry: Sub-industry: Location: Size (sales): Purchasing potential: Specific business opportunities: Personal care Shampoo, conditioner, soap, cologne, lotion, essence, make-up, and aromatic salts, among others Santiago USD $7 million USD $1 million Complete new lines of packaging machinery A) Company Description

4 Sanibel laboratory S.A. was founded in 1991 with the main purpose of providing amenities for the hotel industry. Five years later, the company started to supply other clients, such as pharmacies, supermarket chains and others laboratories. Its main strength lies in the fact that it provides an integral development service. The company creates complete lines of products that include product manufacture, package design, marketing and legal steps (certification/registration). Currently, this firm is the most important supplier for the hotel industry, with 90% of the total national market. Also, it exports products to a wide variety of countries in South America, and sales are growing steadily. This year, the company plans to define its expansion plan for the coming years. It also also is considering the development of its own brand, Terra Spirit. B) Main Products Produced and How They Are Packed Product Brand Package Soap Terra Spirit Boxes and sachets Shampoo, conditioner and Terra Spirit PVC bottles colognes Lotion, essences, mineral Terra Spirit Sachets and glass bottles sales Make-up Terra Spirit Lipstick C) Installed Packing Machinery Current Machinery Brand Units Origin Average Specification Used Age Stretch film package Guerzè 01 Italy 5 years 100% machine Paper packing machine Guerzè 03 Italy 9 years 100% Filling machines Kalish 04 USA 6-8 years 100% Soap production train Mazzoni 01 Italy 40 years 100% D) Last Packaging Machinery Purchase Machinery Brand Country Cost (Approximately) Filling machine Kalish USA N/A Tube sealer machine Comadis Italy N/A

5 E) Future Packing Machinery Ordering Plans This company was founded by two women with experience in the industry who are planning to expand the company. Currently, they are not planning to renew any specific machinery, but are only now developing their expansion plan. F) Purchasing Policies and Financial Arrangements The company usually uses the supplier s credit terms, but also has used leasing and cash payments. G) Factors that Influence Purchasing Decisions Company owners get to know a brand of packaging machinery by asking for references from other companies. The company s plant engineer said that everyone in the industry knows each other, so it s easy to find out about the best performing packaging machine. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Origin Technology Flexibility Service Price USA Very good Very good Good Good Italy Good Good Good Regular The company owners have a good impression of U.S. equipment. In fact, they recently bought a Kalish filling machine from the United States. They believe that U.S. machinery has a bigger mechanical structure than European, but not a longer lifetime. I) Trade Show Attendance / Trade Publication Information Company personnel visit trade shows in Germany, Spain and the United States. J) Specific Interest Depending upon their expansion plan, the company might need complete new lines of packing machinery. K) Contact Information Company Name: Contact: Position: Address: Sanibel laboratory S.A. Santiago Navarro Plant Engineering Los Canteros #8511, La reina, Santiago, Chile

6 Telephone:: (56-02) Website: Laboratorios Davis S.A. Industry: Cosmetics Sub-industry: Perfumes, liquid soap, deodorants, lotions, etc. Location: Santiago Size (sales): USD $40 million approx. Purchasing potential: USD $100,000 Specific business opportunities: Talcum powder and PET packaging machinery A) Company Description Laboratorios Davis has more than 60 years of experience in developing and manufacturing cosmetic products in the hygiene and personal care sector. It main product lines are deodorants, liquid soap, shampoo, conditioner, colognes, mouthwash, shaving products, talcum powder, lotions, gel and polish removers. The company s main clients are big supermarkets, pharmacies, laboratories and the foreign and national cosmetics industries. Laboratorios Davis services are as follows: Manufacturing of personal care products: The company uses its own or the client s formula to deliver a product ready to be commercialized. Development of private-label brands (brands developed by big retail chains): Laboratorios Davis designs the packages, labels, and formulas, and obtains permits from the public health institute for the products. Manufacturing third-party products (Maquila): The client provides the raw material, and Laboratorios Davis manufactures the product ready to be commercialized. Quality Control: Laboratorios Davis has an external laboratory to control the quality of its products as authorized by the Public Health Institute. B) Main Products Produced and How They Are Packed

7 Product Brand Packaging Colognes Coral and Natalie 30, 60, 110cc; the firm is in the process of changing the package from glass to PET with a spray. Liquid soap Lesancy PET bottle with dispenser, 340, 500 and 900cc Deodorants Denim, Etiquet and Jovan Musk Bar: plastic package/lotion: tube 3 laminated and sealed Lotions for shaving Williams 3 laminated and sealed tube C) Installed Packing Machinery Current Machinery Brand Units Origin Average Specification Used Age Viscous material Ronchi 1 Italy N/A N/A packaging machine Viscous material Comas 1 Italy N/A N/A packaging machine Viscous material Komadis 1 Italy N/A N/A packaging machine Sealer machine Schuaneck 1 Argentina N/A N/A Labeling machine Willets 1 Germany N/A N/A Labeling machine MR 2 Germany N/A N/A Cup or piston packaging machines designed by their own technicians 4 Chile N/A N/A D) Last Packaging Machinery Purchase Machinery Brand Country Cost (Approximately) Sealer machine Schuaneck Argentina N/A E) Future Packing Machinery Ordering Plans, Machinery Units Origin Motive of Purchase Estimate Budget Talcum powder N/A Germany N/A US$ 40,000 Sealer machine 01 N/A N/A N/A F) Purchasing Policies and Financial Arrangements

8 The company usually pays cash or some percentage of the total purchase price at the beginning of the process, another installment in the middle, and the final payment after the machine has been installed. G) Factors that Influence Purchasing Decisions 1. The overall time that the development of the project takes. Delivery times are crucial because the company has a very short time to change its whole line of products. The new machinery has to be installed and ready to operate within a few months. This is mainly why the firm gets quotes from established companies with good local representations or with firms in Argentina, which is the closest market. 2. Brand recognition is important, too, in addition to finding the replacement parts in the Chilean market. The availability of replacement parts is actually more important than the manufacturer s technical support service because Laboratorios Davis does repair and maintenance in-house. 3. Price. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Origin Technology Flexibility Service Price USA Good Bad Bad Regular Germany Very good Good Good Good Italy Very good Very good Good Good Argentina Very Bad Bad Bad Very good The company prefers European brands because they have representations in Chile and use the same measurement units (metric), which is not the case with a number of U.S. brands. In addition, the maintenance chief is from Germany, so he prefers German equipment. The company does not like U.S. machines because they are too big. Chile is a small market for cosmetics, so the firm does not need big, expensive machines. Laboratorios Davis has agreements with some local distributors, and it always gets quotes from them. Some of the agreements are with Codepack, for coding information, some are with Multivac, for machinery. I) Trade Show Attendance / Trade Publication Information Company personnel go to national trade shows, as well as international shows in Argentina, Mexico, Germany, Brazil and the United States (New York).

9 The company receives a magazine about electric processes and news, but nothing related to packaging machinery directly. J) Specific Interest For , the company has a USD $100,000 budget for importing new packaging machines. Its plan is to recover its investment in 10 to 12 months. The firm is looking for sealers and talcum powder packing machines. K) Contact Information Company Name: Laboratorios Davis S.A. Contact: Ricardo Avendaño Position: Machinery Chief Address: Av. Pajaritos 6366, Estación Central Santiago, Chile Telephone:: (56-2) N/A Website: Kadus laboratory S.A. Industry: Sub-industry: Location: Size (sales): Purchasing potential: Specific business opportunities: Personal care Oil, lotion, shampoo, cologne, soap and essences among others. Santiago N/A US $5 million All types of equipment for the new plant A) Company Description

10 Kadus laboratory S.A was founded in 1985, and currently is one of the three most important cosmetics laboratories in the country. Its offerings include personal care products, such as natural oils, lotions, liquid soaps, hair products, depilatory waxes and essences. The company also represents in Chile international brands such as Revlon Professional, Fa, Maybelline, Natural Honeys, and Markwins, for the hair salon market. Its products have a presence throughout South America and in the United States. This year, the company will start building a new plant that will include a complete line of new machinery. B) Main Products Produced and How They Are Packed Product Brand Package Shampoo and conditioner Suave Polyethylene and PVC bottles 1000 ml. Depilatory waxes Kadus Polyethylene bags and bottles Colognes Kriss and Kadus PVC bottles 250 and 1,000 ml Lotion Kriss and Kadus PVC bottles 130, 200, 450, 500 and 600 ml Styling gel Kriss and Kadus PVC bottles 230 and 500 ml and 200 and 220 grams pots Liquid soap Kriss and Kadus PVC bottles 500 and 1,000 ml. C) Installed Packing Machinery Current Machinery Brand Units Origin Average Specification Used Age Packing, filling and Kalish 07 USA 1-10 N/A labeling machine (IMA) years Packing, filling and Schwaneck 04 Argentina 3-6 N/A labeling machine Packing machine Tema 04 Argentina 3-20 N/A years Wax packing machine N/A 01 China N/A N/A

11 D) Last Packaging Machinery Purchase Machinery Brand Country Cost (Approximately) Vacuum sealer machine (02) Kalish (IMA) USA N/A E) Future Packing Machinery Ordering Plans In 2008, Kadus will be working on an expansion plan that will include the purchase of complete new lines of machinery. F) Purchasing Policies and Financial Arrangements The company normally uses leasing. G) Factors that Influence Purchasing Decisions The company obtains information about the quality of the machinery through word-ofmouth. It saysi that it is very common in this industry to ask other laboratories about the performance of their machinery. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers Origin Technology Flexibility Service Price USA Good Good Regular Good Germany Very good Very good Good Bad Argentina Regular Very good Good Good The company has a very good impression of U.S. machinery (it recently purchased two U.S. machines), but believe that German equipment is even better. Kadus laboratory does not have any kind of arrangement with any suppliers. I) Trade Show Attendance / Trade Publication Information Company personnel do not attend trade shows and do not read specialized magazines to make a purchasing decision. Staff prefers to ask to other companies about their experiences and recommendations. J) Specific Interest Packing and filling machines.

12 Vacuum sealer machines. K) Contact Information Company Name: Kadus laboratory S.A Contact: José Rojas Position: Technical director Address: Panamericana norte 3061, Renca, Santiago, Chile Telephone:: (56-2) Website: Laboratorio Rovic Ltda. Industry: Sub-industry: Location: Size (sales): Purchasing potential: Specific business opportunities: Personal Care Cosmetics Santiago N/A N/A Sealer machines A) Company Description Laboratorio Rovic Ltda is a small family-owned company founded in It manufactures and packs cosmetics products under its own brands and for third parties. The company has packaging and manufacturing facilities and warehouses in only one plant, located in Santiago. The company s products include lotions, shaving lotions, industrial suntan lotions, perfumes, colognes, and shampoos, among others. B) Main Products Produced and How They Are Packed Product Brand Package Lotions Origenes Glass jar with a double polyethylene cover in a thin cardboard case Suntan lotion Skate H 100 grams aluminum and polyethylene 3 laminated package with a dispenser valve

13 and 5,000 grams. Plastic wholesale buckets. Gels Galaterra 220 and 1 kg PVC jar with polyethylene cover in cardboard boxes of 5 and 10 units C) Installed Packing Machinery Current Machinery Brand Units Origin Average Specification Used Age Sealers N/A 02 Argentina 5 years N/A Labeling machines N/A 02 Argentina 3 months N/A Packaging machine Gastic 01 USA 10 years N/A D) Last Packaging Machinery Purchase Machinery Brand Country Cost (Approximately) Labeling machine N/A Argentina N/A E) Future Packing Machinery Ordering Plans, Machinery Units Origin Motive of Estimate Purchase Budget Sealer machine 01 USA N/A N/A F) Purchasing Policies and Financial Arrangements Because Robic is a small laboratory, it uses credit when possible. It negotiates directly with the supplier once the machine manufacturer has been chosen. Guarantees and credit are important to Robic. G) Factors that Influence Purchasing Decisions 1. Price. 2. Technical support. 3. Quality. 4. After-sales service. H) Comments on Preferred Brands and Existing Business Arrangements with Packing Equipment Suppliers The company does not have business arrangements with any packaging equipment suppliers.

14 I) Trade Show Attendance / Trade Publication Information Company personnel do not attend trade shows. The company receives several magazines and technical publications, such as the plastic manufacturer s association magazine and those related to the cosmetics market. J) Specific Interest The company receives information through brochures, s or in magazines. It contacts the companies that look most promising. The company is more likely to purchase a packaging machine if it has been recommended by another company. K) Contact Information Company Name: Laboratorios Rovic Contact: Rosalinda Cortés Position: Owner Address: Williams Rebolledo 1930, Ñuñoa, Santiago, Chile Telephone:: (56-2) N/A Website: