Converting capabilities grow in Caribbean nations.

Using Puerto Rico as a shining example of successful plastics/packaging industrial expansion (particularly for pharmaceuticals), many other Caribbean nations are rapidly gearing up to develop new flex-pack converting capabilities.

Located just 90 miles off the coast of Florida, Cuba has fantastic potential for North American converter expansion. An educated workforce, coupled with recently increasing consumerism, has provoked interest among many multinational packaging suppliers. Ever since Fidel Castro seized power in 1959, American commercial interest (but not foreign) in Cuba has been virtually negligible. In addition, after the collapse of communism in 1990, Cuba had five disastrous years that saw the economy contract at least 34%, according to official figures (some foreign economists estimate the collapse at closer to 50%). Now, officials are starting to say for the first time that the worst is over.

My information on the Cuban packaging industry was supplied by Marina Soroka of Walter Soroka Assoc. Presently working for a Canadian consulting firm, Marina worked for several years at the National Packaging Center (Centro Nacional de Envases Y Embalajes) in Havana.

She told me that in the late 1980s this organization employed up to 20 engineers and chemists performing both testing and development in packaging. Largely funded by the United Nations, the National Packaging Center was a favorite of Fidel Castro, whose ultimate goal was to make it into the information center for all of South America. Although a decrease in U.N. funding and Cuban domestic economic problems have caused many internal problems at the National Packaging Center, it still remains a viable source of information - both technical and marketing - for trends in Cuba.

Marina also provided me with a firsthand view of the Cuban converting/packaging industry. She notes that, like the rest of the Cuban economy, the packaging industry struggles against odds such as the lack of natural resources and of hard currency, which would allow higher import levels.

Prior to the disintegration of the eastern European socialist block, Cuba received most of its packaging supplies from these countries through barter or on credit. Recent social and economic changes in the former partner countries have affected the Cuban economy on the whole and the packaging industry in particular.

As with the rest of the economy, the packaging industry is subordinated to satisfying internal demand and, to a greater degree, to promoting Cuban exports (liquor, tobacco, produce and seafood) in the word market.

While packaging for domestic consumption must be produced as economically as possible, with a minimal amount of imported ingredients, packaging for export products must achieve stricter Western requirements in order to compete in the international market. This often leads to the existence of two levels of packaging: a lesser quality for domestic consumption and a better quality (typically involving imported packaging or its components) for export goods.

Glass is the only packaging material that can be produced almost exclusively from Cuban components. This has made it the most favored packaging option for the food, liquor and pharmaceutical industries.

The paper industry is handicapped by the need to import all wood-based pulp and paper, since Cuba has no such resources. Research continues to be carried on to find the most effective way of using bagasse as a substitute for wood pulp, but bagasse-based products have limited applications.

A modern French-technology corrugated board plant was built in the mid-80s to produce corrugated boxes locally, using mostly imported liner-board. Other parts of the paper packaging industry produce multiwall bags, fibre drums, folding cartons and molded pulp trays for various domestic needs. Higher quality jobs, such as labeling, high quality corrugated boxes and folding cartons for export packaging, are ordered abroad.

Three-piece metal cans for fish and fruit juices are made domestically, as are crown caps and toothpaste tubes. Aluminum two-piece cans for export beer and soft drinks are imported, and there is a limited production of plastic films, flexible packaging and plastic bottles. All packaging machinery is imported, coming from various countries that include former socialist Germany, France, Hungary, Italy and Spain.

In the last few years, several Cuban packaging factories have been authorized by the government to form joint ventures with foreign investors. This will probably increase both packaging variety and output.

The Cuban firms presently providing plastics packaging - flexible and rigid - include Combinado de Papelos Blanco (paper/polyethylene); Empresa de Vegetales Habana (plastic bottles); Empresa de Aceites Y Grasas Comestibles (flex-pack, plastic bottles); and Union de Empresas del Plastico (flex-pack). There are many other firms involved in both corrugated and paper bag production.

Jamaica, with its 2.5 million people, has a fairly substantial flexible packaging industry. Mostly located in the environs of Kingston, the packaging industry, evolved out of the need for "import substitution."

Lloyd R. Moore, managing director of Scope Industries Group in Kingston, told me that Jamaican converters are now actively retooling and beginning to enter the global market. They were hampered in the past by a lack of US dollars and by obsolete equipment, but the situation is rapidly changing over to more sophisticated products.

Out of the total estimated $45-MM flex-pack market in the Caribbean nations, Jamaica accounts for $13 MM. Major Jamaican flex-pack converters include Wisynco, Polypak, Wilpak Industries, AgriPak and Musson Jamaica.

Trinidad/Tobago (pop. 1.25 MM) has an estimated 20 extrusion plants producing a variety of PE products. With an estimated $15-MM industry, three of the larger converters are Polymer (Caribbean), Magnus and Geneva Enterprises Co. Both Polymer (Caribbean) and Geneva also do coextrusion.

Stevenson Edwards, marketing manager for Magnus, told me, "Trinidad is the pioneer in terms of setting standards for the flexo printing market in the Caribbean nations." He added, "We endeavor to even outperform the standards of the more established printers."

Among the former British Empire, Barbados, with its population of 250,000, accounts for an $8-MM market. There are an estimated five plants with extrusion facilities. Precision Packaging provides PE film and bags with a wide assortment of both surface-printed and -laminated PE and oriented polypropylene products. Ultima Poly Extruders also extrudes, prints and laminates PE and PP in Barbados.

The Dominican Republic (pop. 8 MM) has a flex-pack industry estimated to be $50 MM and consumes over 35 MM lb. of PE resin annually. Facilities include two coextruders (Fabricos y Servicio and Multiform), three laminators (Tuberias y Materiales, Fabricos y Servicio and Prepak) and one rotogravure printer (Cellugrafica Urania).

St. Kitts, St. Lucia and Guyana have small extrusion facilities producing PE retail bags and printed film. In the Dutch West Indies, there is an extrusion facility, in Curacao.

A complete listing of converting plants in the Caribbean can be found in "The Comprehensive Guide to the Latin American Converting/Packaging Industry," available from the Packaging Group, Box 345, Milltown, NJ 08850; 908/636-0885; fax: 908/390-1402.


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