| 103Market Focus: Latin America Industry resilience on show in Latin America Despite challenging economic conditions, suppliers to the Latin American market see reason for cautious optimism. James Quirk reports o market operates in a vacuum. The impact of the “2022 showed that converters are war in Ukraine – resulting in high energy and food prices – is being felt worldwide, stalling or even Nlooking to optimize their productivity decelerating the economic bounce seen as countries exited Covid-induced lockdowns. and are willing to invest”In 2021, according to the IMF, the economy in Latin America and the Caribbean grew by 6.9 percent, fueled by a surge in commodity affect people’s acquisition power,’ says Silva. ‘If people do not buy prices driven by strong demand as the global economy reopened. products, it directly hits the production of labels and packaging and Russia’s invasion of Ukraine has slowed that recovery, with indirectly hits the consumption of dies and tooling.’growth in 2022 at 3.5 percent, mainly driven by Chile, Colombia, JM Heaford’s Vindel and Yupo’s Cruz both saw hesitancy Costa Rica and the Dominican Republic, which have seen better among converters to invest in capital equipment in 2022 because post-pandemic recovery than much of the rest of the world. of political uncertainty generated by elections held in many of However, growth in the region’s three major economies – Mexico, the region’s countries. GM’s Kabouw also mentions increasing Brazil and Argentina – has lagged. Economic forecasts for 2023 competition from Chinese manufacturers as a challenge, along with are more pessimistic: the IMF predicts 1.7 percent growth. Recent price rises and high infation. ‘The supply chain is also a challenge,’ years have also seen much political upheaval. Leftist challengers he says. ‘We’ve invested a lot of resources to ensure we always defeated incumbent governments in elections in Brazil, Colombia have critical parts in stock. This brings the beneft of machines and Chile. Peru has had fve presidents in two years; Venezuela’s being available for faster shipment.’woes continue. Despite the challenges, there is optimism to be found. JM Heaford’s Vindel reports growth in Central America and the Resilience Dominican Republic. ‘I expect that if 2023 is challenging, 2024 will Much of the above chimes with conversations with leading improve. Labelexpo Mexico and Labelexpo Europe may yield some suppliers to Latin America’s label and package printing industry: positive results. We have also started the year with a good order converting equipment manufacturer GM, plate mounting in Brazil.’equipment specialist JM Heaford, tooling supplier Kocher+Beck, For Yupo, Central America, Brazil and the Andean region are press manufacturer Nilpeter and synthetic material producer Yupo. all performing strongly. Cruz attributes the company’s success in Yet despite the economically challenging conditions, the resilience the region last year to brand owners and regulatory bodies driving of the label and package printing industry remains on display. ‘sustainable alternatives to label decoration.’ Asked how 2022 sales in Latin America compared to 2021, JM ‘Yupo has worked very hard with associations such as the Heaford and Yupo both registered improvement – with the latter Association of Plastic Recyclers (APR) to ensure that our IML even recording a record year in the region. substrates meet APR’s Critical Guidance Protocol, and we have ‘In the label market, sales were slightly higher than in 2021 been awarded recognition for doing so,’ he says. Cruz expects but with customers often buying lower-price machines,’ says JM growth to continue and Yupo is adding to its team to serve this Heaford’s Nick Vindel. growing market.Yupo’s Alex Cruz reports a 2022 ‘well beyond expectations’ with Kabouw points out that much depends on whether a particular record sales in Latin America. market is geared for export or internal consumption. Chile – hugely ‘2022 was the year of reactivation,’ reports Nilpeter’s Juan Pablo reliant on export markets – ‘slowed down a lot, but Argentina Patino. ‘If you compare it with 2021, in terms of sales and growth picked up.’ Opportunities can also be found because of specifc we still did not reach pre-pandemic levels, but 2022 showed that trends in the sector. ‘Multi-layer labels have kicked off in several converters are looking to optimize their productivity and are willing beverage segments, such as micro-breweries. Smaller shops to invest in it.’ are diversifying their offering, often with digital printing. And GM’s Jos Kabouw says 2022 was ‘slower than expected’, but that mid-range companies are increasingly seeking to add value to the the company completed ‘some nice projects.’ labels they produce.’‘It is always easier to complain, but we have good customers According to Nilpeter’s Patino, shrink sleeves are performing well throughout the region who value the ease of use and reliability of and there is ‘important growth’ in the mid-web fexible packaging our machines, and who take advantage of this.’ market. Due to the challenging conditions, ‘more converters are After certain markets boomed in 2020 and 2021, such as food looking into their internal procedures and renovating technology and beverage, medical and personal care, Kocher+Beck’s Amin Silva to reduce waste and increase productivity. They are looking to says 2022 was ‘a great year as well, but tooling consumption was automate processes as much as possible.’more similar to pre-pandemic levels’. ‘The outlook for 2023 is tough and competitive,’ concludes The challenge most cited by the suppliers was instability, Kocher+Beck’s Silva. ‘But there are opportunities for growth for the whether economic or political (or both). ‘Unstable exchange rates companies that work hard and develop a good market strategy.’on the interest for local credit lines are having a big impact,’ reveals Nilpeter’s Patino. ‘In some cases, interest rates increased by more Labelexpo Mexico takes place on April 26-28 in Mexico City. than 10 percent.’ Go to www.labelexpo-mexico.com for more information and ‘Historic infation levels in several countries in the Americas to register Jan - Mar 2023