Flexibility has been a driving factor behind the ongoing success of Vidrio Formas, a glass container manufacturer located just outside of Mexico City. For the past 21 years, the company has produced glassware for the tequila and food industries, providing some of the top companies in Mexico with a distinct bottle for their brand. Rachel Hartman reports.
Vidrio Formas, S.A. de C.V. produces glass containers for a number of industries. Rather than focusing on quantity, however, the company looks for ways to help its clients stand out from others in their given industry. “We’ve worked with small companies that have small volumes to develop a unique bottle design, their own image,” notes Marcos Bernstein Keller, CEO of the company.
Paying special attention is a worthwhile task, especially in industries such as tequila. “It’s often said that in many cases, tequila is sold by the style of bottle and image – similar to the way perfume sells,” Bernstein adds. “We pay attention to details for our clients.”
CHANGES OVER TIME
Vidrio Formas first began operations in 1990. Originally, the company focused on producing glassware in an artisan style, carrying out many operations with manual labor. It also made glass bottles in a furnace that had the capacity to make 25 tons of glassware a day. At first, Vidrio Formas produced a maximum of 15 tons per day. It supplied containers for the industrial glass industry, producing bottles for solvent dyes.
In 1993, the company signed an agreement with Ball Glass Manufacturing Company, a U.S.-based manufacturer. With the support of Ball Glass, Vidrio Formas modernized its operations and increased daily production capacity to 50 tons a day. Nearly all of its goods went to the tequila market. At this time, the company ended its artisan, or manual-based, production. The agreement with Ball Glass lasted for two years.
During the following years, the company focused on producing glass containers for the wine and liquor industries. In 1994, when an economic crisis struck much of Mexico, company officials saw the need to restructure financial operations. The owners sold 70 percent of the company’s shares to an American investment fund named Hicks, Muse, Tate & Furst, Inc. This fund provided the capital need to maintain business operations and modernize the plant.
The next years brought higher levels of production for Vidrio Formas. By 1997, the company had the ability to produce approximately 140 tons of glassware a day. It also installed a press and blow process in order to be able to manufacture containers for the food industry.
In 2000, a crisis involving the agave, the plant used to make tequila, hit Mexico. Due to a period of freezing temperatures a large portion of the agave crop was affected, and prices for the plant soared. Sensing the struggle facing the tequila industry, Vidrio Formas switched much of its focus toward the food industry. It began producing containers for salsas and other items stored in glass, such as mayonnaise, olives, and capers.
In 2001, the company increased its production capacity to 160 tons a day; then in 2004, it upped rates to 180 tons per day by adding a system of burners in the crown of the furnace. That same year, Vidrio Formas restructured its finances once more, this time regaining what had been sold to Hicks, Muse, Tate & Furst, Inc. The company continued operations with its now 100 percent Mexican capital.
When 2007 arrived, company officials decided that the furnace that could produce 180 tons per day was outdated and in poor conditions. They chose to build a second furnace which had the capacity to produce 240 tons of glassware on a daily basis. This project involved the investment of 25 million dollars.
VIDRIO FORMAS TODAY
Company officials decided to invest an additional 25 million dollars in 2010. The investment was used to build a new furnace that replaced the first one the company operated for nearly two decades. The new furnace has the capacity to produce 180 tons of glass containers each day.
Today the company focuses most of its production on the tequila and food industries. Its plant covers an area of 25,000 square meters. This space provides room for the production area, the two furnaces, the revision area, and a packing area. It also includes an area with maintenance equipment and a space for the molds used to make the bottles.
In addition, the company has 40,000 square meters that is used as a warehouse. “We hold between two and a half to three months of inventory at a time for a client,” Bernstein explains. “When the supply begins to run low, we contact the client and produce another three months of inventory; then we store it for the client as needed.”
During its years of operations, Vidrio Formas has benefited greatly from Francis Paladino, a former vice president of operations at Ball Glass Manufacturing Company. Paladino now serves as the technical assessor for operations at Vidrio Formas. He has held this position for the past 17 years.
Vidrio Formas employs approximately 600 workers. These workers participate in different shifts, so that operations at the plant run on a 24/7 basis. The company’s plant and headquarters are situated in the industrial park of Lerma, which is located approximately 30 minutes west of Mexico City.
NORTH AMERICA ADVANTAGE
While some industries in Mexico have been affected by competition from Asian companies in recent years, Bernstein notes that Vidrio Formas has not suffered any changes. “Shipping charges have an important impact on the cost of a product,” he explains. “Since we’re in Mexico, we have a competitive advantage of being near the North American market.”
Vidrio Formas, by and large, produces glass containers for the Mexican market. According to Bernstein, the company exports less than 10 percent of total production. The products made for exportation are sent to the United States, Central America, and the Caribbean.
Vidrio Formas ranks fifth in Mexico among glass container producers. Officials estimate that the company holds approximately 5 percent of the total glass market in Mexico. The larger glass manufacturers tend to cater to the beer and refreshment industries. Vidrio Formas, on the other hand, focuses on the tequila and liquor market. It also provides for companies in the food industry.
Even though it has the capacity to compete with larger firms in the industry, Bernstein notes that the company specializes in flexibility, which makes it more appealing to small and medium-sized businesses. “We are able to develop and send products to the market in the fastest manner possible,” Bernstein explains. “We have our own designers for both glass containers and molds. In today’s world, we can compete with nearly any other world-class company in terms of advanced technology, eco-friendly processes, and automated machinery.” Much of the company’s equipment has come from Italy and England.
“We’re a small company ourselves,” says Bernstein. “We can make quick and easy decisions, and this allows us to make products of any size.” The company focuses on creating original products that don’t fit into the standard molds often used in the glass manufacturing industry today.
The company plans to produce 80,000 tons of glass containers in 2011. It also plans to sell approximately 260 million glass containers, bringing in estimated revenues of 70 million dollars. By doing so, Vidrio Formas will remain an original leader in Mexico, providing top companies with the bottles they need, when they need them.