Part of the Brazilian group Copobras SA, Incoplast has been making flexible plastic packaging solutions for close to 30 years. However, it wasn’t until it conquered the pet food segment that the small company became a top player. Director Alex Schilickmann recounts to Michael Sommers how this niche market leveraged the company’s growth and is propelling it into the future.
Sometimes, it takes a while to find one’s niche. It was only when he turned 47 that Brazilian entrepreneur Aloisio Schilickmann decided it was time to change his professionial life. The year was 1970 and Schilickmann was living in São Ludgero, a small town in the southern state of Santa Catarina, founded by German immigrants in the late 19th century.
When he founded a factory and began producing plastic sandals for infants and toddlers, Schilickmann had little idea that his modest business would end up transforming the social and economic history of his small and, at the time, largely rural hometown. Even less imaginable was that the prosperity he brought to his company and his community would be derived not from plastic products for children, but for pets.
FINDING A NICHE
Although Schilickmann’s company, Incoplast, started out making plastic shoes, it quickly traded one niche for another when it veered into the production of polyethylene bag handles, tubes and fittings. However, it wasn’t until 1982 that the company finally found its calling when it began manufacturing flexible plastic packaging. In 1991, Incoplast became the first manufacturer in the entire Brazilian South to use packaging that featured polyethylene liners. Several years later, it celebrated 25 years of activity by opening a second and larger plant in Marialva, located in the neighboring state of Paraná.
The Paraná plant was part of a brave new strategy to branch out into new markets. At the time, Incoplast already made plastic packaging films, sheets, bags, and stand-up pouches for a variety of different uses and industries. However, in 1999, it decided to start making flexible packaging for pet food.
“At the time, the segment was growing considerably and there was a real need for packaging solutions, but nobody was supplying products with quality,” recalls Alex Schilickmann, director of Copobras SA, the packaging group of which Incoplast is a part. Incoplast entered the market by introducing bags that relied on the latest high-barrier technology. Over time, as technology advanced, the company remained in the vanguard by adding even more barrier layers using materials such as nylon, PVDC (polyvinylidene chloride), EVOH (ethylene vinyl alcohol), and metallized films. “From the start, the technology we applied to this line really guaranteed the quality of the product, sealing in aroma and flavors, and protecting the contents from oxygen and moisture. Our items were really distinctive in the marketplace and, as a result, we grew a lot.”
It grew so much, in fact, that today Incoplast is the number one manufacturer of pet food packaging in Brazil and the pet food line accounts for the largest portion of the company’s business. Other important lines include polyethyline films for grains, rice, and sugar, dry goods such as crackers and pastas, and frozen meat products; laminated films for powdered milk, coffee, and snack foods; stand-up pouches; plastic bread bags; sachets for condiments (mustard, ketchup, mayonnaise); and polyolefin films.
NEW TECHNOLOGY AND NEW MARKETS
“The polyolefin films represented another significant breakthrough for us,” admits Schilickmann. “We first started manufacturing these films in 2000 for the meat packing segment. We’re the only ones in Brazil that extrude this type of material and our domination of this process has given us considerable clout in the industry.”
Another big technical breakthrough came in 2005, when the company installed itself in the Brazilian Northeast and, with new state-the-art equipment, began rotogravure and, later, flexographic printing. Although this new Incoplast unit was originally located in Recife, Pernambuco, in 2008, it moved to an industrial site in the adjacent state of Paraiba, where it shares space with another Copobras SA entity, a manufacturer of disposable plastic and styrofoam cups.
Technology aside, the move to the Northeast was important in that it vaulted Copobras SA onto the national stage. Previously, the group had achieved a strong presence in its native South, and had crept into the Southeast. But now, it has a solid foothold in the Northeast and North, two traditionally poor regions that were now the fastest growing markets in Brazil due to federal spending programs and the trickle-down effects of a booming economy.
“Prior to 2005, we had very limited business in the Northeast because many of the products there had such low added value,” explains Schilickmann. “But today, the market has grown a lot and there are many items with a lot more added value.” Indeed, as it looks to pursue continued growth, Copobras SA – which currently employs 3,000 people, 1,200 of whom work for Incoplast – is expanding Incoplast’s sales force by 10 percent. Aside from the Southeast, the bulk of new recruits will be active in the North and Northeast.
Over the last few years, Incoplast has experienced healthy rates of growth. Current production capacity is 2,100 tons a month; of this total, 900 tons are produced at the company’s headquarters in Santa Catarina and 1,000 and 300 tons are produced, respectively, in Paraná and Paraiba. Since 2008, revenues have increased annually by 10 percent, although this year the company expects expansion to be in the single digits due to stabilization of the market.
Incoplast has also enjoyed some success beyond Brazil’s borders, particularly in terms of its pet food packaging lines. Having already saturated the markets in neighboring Colombia, Venezuela, and Uruguay, the company is preparing to expand into Argentina and Chile as well as further afield into Guatemala and Mexico. While to date exports represent 5 percent of total sales, Schilickmann is confident that there are plenty more opportunities in Latin America – and at home.
“These days, what really sets us apart from our competitors are the quality of our printing technology and the services we offer,” says Schilickmann. “In terms of printing, we just acquired some of the most cutting-edge gearless technology on the market. WindMoeller & Hoelscher printing presses are flexographic printing machines that are extremely rapid and easy in terms of set-up. Moreover, the quality of the printing is really superior. We can now print 60 lines per square centimeter, which allows for very high definition. Few others in this industry our capable of achieving such results in Brazil. The fact that we do all our prepress in house and our design team is very stong gives us an additional edge.”
The company’s off-site service is equally top-notch. “We’re very rapid in our deliveries and overall response to clients. We’re also very flexible in terms of catering to clients’ needs when sudden emergencies arise,” says Schilickmann. “Ultimately, despite our growth, we still pride ourself on maintaining a family culture. We go to great lengths to serve our clients by producing high quality products and offering high quality service that not only meet their needs, but surpass them.”