Canguru is a company that has excelled in developing plastic solutions for myriad markets, from diapers to pet food. Christopher Langner tells the story of how this company has become a Brazilian leader.
Canguru is a company most Brazilians know intimately, though many may not realize. The fact is most pantiliners and feminine pads sold in Brazil are made with a thin, porous plastic film manufactured by Canguru. The division of Jorge Zanatta S.A. also produces plastic bags for foods and recently incorporated another division of Zanatta, which makes disposable plastic cups and plates. Simple as that, the company is present in the most trivial, everyday things, from the kitchen to the bathroom.
The company’s most important product is the porous plastic films used as the last layer of diapers and pantiliners. Canguru is the biggest supplier of this product in Brazil and it counts among its clients hallmark names such as Johnson & Johnson, Kimberly-Clark and Procter & Gamble. Therefore, it can be safely said that almost 90 percent of children and women in Brazil have used a Canguru product at least once in their lifetime.
Canguru also makes a second plastic film that goes inside the pantiliners and diapers. As if this weren’t enough, the company still manufactures the individual plastic wrappings of the diapers and pantiliners – not to mention the plastic package in which they are sold. Actually, 40 percent of all plastic packages for personal hygiene products made in Brazil come from one of Cangurus plants.
Therefore, most of the famous brands of toilet paper also come wrapped in Canguru-made packages. “We are in people’s everyday lives,” says the vice-chairman of Grupo Zanatta, Ernesto Guilherme Schulz.
Keeping this primary market in mind, Canguru has just launched a new package with strings that allows hygiene products to be kept safe and dry even after they have been opened. Canguru has also started to use its porous plastic films to make packages. This allows fresh air to flow into the package, which can be helpful to preserve some products.
In Brazil, Canguru makes the packages of many of the most famous snacks, soaps, pet food, breakfast cereals, bread and candies not to mention plastic labels for carbonated drinks. And Canguru uses the remains of the production of all these different products to make plastic bags.
Canguru also makes the so-called special technical plastic films, which are used to make printed packages. Canguru prints the films in up to eight colors. They are used to make those very thin and colorful plastic wrappings used in products as diverse as caramels and steel sponge pads.
Canguru’s printing on thin plastic, called in the industry flexographic printing, is so good that in November the company was awarded the quality prize from the Flexographic Printing Industry Trade Association of Brazil. The company’s wrapping for fine herbs of client Quimer Ervas was considered the best in the five to ten colors category.
Plastic for food
Canguru has among its food packaging clients the two biggest poultry processors in Brazil, Perdigao and Sadia. Their demand is such that Canguru built a plant in the Chapeco region, in the southern state of Santa Catarina, where both poultry processors are headquartered. The Chapeco plant, which started off just to serve these big clients, today produces all of the food packaging contracted to Canguru.
Besides poultry, Canguru makes packaging for cereals, cold cuts, bread and cakes, as well as snacks, meats and candy. So, in Brazil, virtually every minute there is somebody tasting something wrapped in a Canguru package. To widen its food package offerings, Canguru has just started producing resealable plastic pouches for products as nuts.
And Canguru-made plastic doesn’t wrap only food for people. The company is one of the biggest producers of pet food packages. Canguru has a plant in Pelotas, in the southern state of Rio Grande do Sul, dedicated solely to making the pet food packages and industrial plastic bags used to carry rice and other cereals. This unit was bought from a concern that manufactured bags for the local rice producers.
There is also a unit which uses the leftovers of the production of everything to make plastic garbage bags.
In 2002 Canguru incorporated another unit of Jorge Zanatta: the disposable plastic cups and plates. The name Zanatta became well known due to its widespread distribution of these single use products. Canguru has over 3,500 clients for its beer, coffee and water cups around the country. Most of these are companies that buy wholesale. The disposable products are made in a plant in Criciuma, where Canguru is headquartered, and then transported all over the country.
When Canguru was founded, back in 1970, it had only 12 employees and was focused only on producing plastic bags for foods as rice and beans. The Zanattas understood they could use their knowledge and machinery for plastic to make other products besides disposable cups and plates.
Ten years passed before Canguru began manufacturing packages for other products as diverse as diapers and cold cuts. Around the same time the company started printing on plastic with eight colors, something fairly new in Brazil then. In 1985, already well established within the food industry, Canguru built its plant in Chapecó to serve the poultry industry. There, it also began producing plastic films to pack cereals.
Nine years later Canguru bought the plant in Pelotas and the cereal packaging business was transferred there. The strong plastic bags used to carry rice that Canguru began producing in Pelotas weren’t much different from the ones used to pack dog food. Soon, Canguru was into that business too.
The more Canguru went into the plastic films business, the more it invested in technology and cutting edge equipment. Today, it is considered one of the most modern plastic packages companies in Brazil.
Proof of that is the prize Canguru was awarded last year. The company, in association with Braskem, a Brazilian plastic resins manufacturer, developed a machine that can produce up to 140,000 plastic cups per hour. According to the company, the closest competing machine costs around $1.6 million and has a maximum production capacity of 100,000 cups per hour. The breakthrough rendered Canguru the “Technological Innovation” prize offered by Finep, a Brazilian think-tank and technology incubator.
New structure, increased profitability
A restructuring that merged the disposable plastic cups and the plastic packages and films division was driven out of Canguru’s desire to capture more synergies. Though the products made by both formerly separate divisions used the same materials, there were, for example, two fully staffed procurement offices. Uniting them, according to Schulz, not only saved the company money with employees, it increased Canguru’s bargaining power with suppliers.
The new Canguru is responsible for about two thirds of the revenue of its holding company, Grupo Jorge Zanatta. In exact figures, that means this part of the company had revenue of BRL 230 million in 2005, while the remaining division, which makes water storage tanks for homes, generated BRL 109 million in revenue for Grupo Jorge Zanatta. Within Canguru, plastic packages for personal hygiene products is the most important division, and it alone responds for 55 percent of Canguru’s overall revenue.
Because of all of this diversity and activity Canguru has become one of the most important suppliers in Brazil and will no doubt continue this position for years to come.