Grupo Peosa supplies packaging solutions for fast moving consumer goods such as cookies and candy that serve the duel role of competing for shopper attention on the supermarket shelf while protecting and preserving the product life.The high technology business employs some of the highest quality printing machines and packaging substrates, requiring continual investment. Over the last seven years Grupo Peosa has invested about $29 million in infrastructure such as machinery with over $15 million of that figure invested in two new plant constructions.
These investments have given Grupo Peosa the capacity to produce over one billion cardboard (pliable) packages a year using material including pure cardboard and laminated liner board (which has a printed sheet laminated to a single face sheet or micro corrugated sheet), that are offset printed to a high standard. The packaging can be formed with a variety of sizes of corrugated flutes.
Ever-changing market requirements are seeing a gradual migration towards metallic packaging that yield longer product life, which calls for yet more investment. Grupo Peosa has invested $8 million in the last eight months as part of its effort to remain at the vanguard of packaging production in both Mexico and the continent. “The market is more competitive everyday. We already have the machinery needed to offer this product to the market, and we are already working in these kinds of packages for our clients,” says President Javier Cordero.
The company supplies packaging to many recognized producers of fast moving consumer goods such as Nestle for whom it produces packaging for Abuelita chocolate, Purina and Nido milk pancakes; Unilever for whom it produces packaging for Maizena, Pronto cakes and hot cakes, Kraft for whom it produces packaging for Jell-O, and a line of Ritz biscuits, Oreo Cookies and Chips Ahoy, and BIMBO, Panasonic, and Tequila Herradura.
“We don’t directly export any of our products, but indirectly we do. That is, we make packaging for clients that end up exporting our products. I think about 50 percent of our production ends up in foreign markets all over the globe,” Cordero says.
Grupo Peosa has grown organically by capturing clients from its competitors rather than through market growth, and now ranks as one of the top two producers in the Mexican market and one of the top five in Latin America. “It is not that the market hasn’t grown, it has, but we have managed to participate in a bigger piece of the market,” explains General Manager Rafael Riebeling
Riebeling attributes this to three reasons: the involvement of the company’s owners in the business which shortens the timescales of the decision making process; the use of top quality, high technology equipment that enables it to produce quality results and allows the machines a longer working life of between three and four years; and that the team the company has assembled is really prepared and competent and works 24-7. “We work from Monday till Sunday, which ends up increasing production and reducing production costs,” he says.
The company constantly invests in technology to maintain its position at the leading edge of the business. “I believe in constant innovation to keep up with the market and to offer a great quality product to clients,” Riebeling says
This philosophy has seen the company grow from operating one 2,500 square-meter plant with 35 employees and production capacity to transform about 800 tons a year of carton in 1996 to three production plants in 10 years. Two are in Guadalajara and one is in Guanajuato that combined occupy more than 65,000 square meters with over 1,000 employees and a transforming capacity of more than 45,000 tons a year of carton and paper. “That is about 11,000 percent since we started if my math’s not mistaken,” he says.
Installed equipment for producing packaging includes four corrugating machines, three machines for producing single face sheets, and one machine for producing corrugated foil, four laminating machines and 12 die-cutting machines, all of them automatic with their own trimming section incorporated into the machine.
In the pre-press department we also have three digital color-testing machines, two computer-to-plate machines that generate the printing plates, and two machines that produce samples or dummies from white cardboard. The print shop has four printing machines that print six-colors plus varnish, one that prints eight-color plus varnish, two four-color printing machines, three two-color machines, which adds up to 51 printing units. The company can also produce special finishing touches such as embossing, hot foil stamping, UV varnish, and window patching. These production facilities are ISO: 9000-2000 certified.
In addition to its own fleet of transport, the company has sales, engineering and design offices and stores in Mexico City. The stores have gluing machines for cardboard boxes and 10 pliable gluing machines.
While clients provide the external design of the packages, the company proposes the structural design of the package to its clients. “For example, they tell us that they need a package for 12 items and we manufacture a package to fulfill these requirements in the best possible way,” he says
This task falls to the design engineering department, a team that works on the development of new products and process to improve the products. “Metallic package processes are complicated. It is not as easy as it looks as it has its complications such as finding an appropriate foil or the right ink color. Many companies have the knowledge for this development and these products, but as competitors, each one has to adequately manage the process to produce this new product. Each one has to work hard to get it. It is no piece of cake,” he said.
Internal procedures such as cost control mechanisms review each product order. “We have an internal cost control plan that measures product orders one by one against a standard,” he says, explaining that the more processes a product has the bigger the materials wasted. “If a product doesn’t have much of a process, then the waste is going to be smaller,” he says.
Suppliers play a key role in the success of the company, which is careful to work with quality suppliers. Says Cordero: “We work with recognized and important companies such as paper producers Grupo Ponderosa S.A. de C.V., Productora de Papel S.A. de C.V., Copamex and Grupo Industrial Durango, and we keep great relations with each and every one of them. We have long commercial relations with them and have worked with Ponderosa for more than 11 years, and 10 years with Copamex. Our newest supplier is Grupo Durango and we have worked with them for around seven years.”
New metallic packaging production will maintain the compet-itive edge for future growth for Grupo Peosa as it responds to consumer demands.