Peru’s leading producer of food packaging, Empac, suffered liquidity problems in 1998 and 1999 due to the nation’s economic crisis which slowed industrial activity and consumption. Sales during 1999 were down 30% from one year earlier, although a major reorganization during the first half of 2000 stemmed losses.
In order to compensate for the weak domestic packaging market, Empac recently entered the Venezuelan market with shipments of 2,000 kilograms per month. According to Empac’s business manager, Rene Mickelena, the company is negotiating sales to companies in Mexico and Central America with the goal of ultimately directing 15% of total sales to those markets.
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Management expects that exports will bring production from 60% of installed capacity at present up to a level of 90%. Overcapacity became an issue after Empac invested US$1.5m in expanding production, just before the 1998 recession battered packaging demand in Peru and the remainder of South America.
SOURCE: includes information from the article “Empac inicio exportaciones de envases a Venezuela”, Gestion (10 October 2000).
