Converter Plays Key Role in Mercosur Trading Group

Published: March 01, 2000, By Stanley Sacharow, Contributing Editor

Uruguay's leading flexible packaging converter, ISMA S.A., is located in Montevideo, the nation's capital city and the center of Uruguay's industrial activity. The smallest independent nation in South America (pop. 3.2 million) is an integral member of the Mercosur trading group (along with Argentina, Brazil, and Paraguay) and is located strategically to supply the huge Mercosur population (215 million).

Family-owned ISMA ($8 million) is a multifaceted converter supplying both domestic and regional markets with a wide range of flex-pack material. Fred Spritzer, ISMA's president and founder, told Paper, Film & Foil CONVERTER during an exclusive interview, "Our company was started in 1964, and we have continuously expanded to serve both local and multinational food companies."

Located in a new 5,000-sq-m plant in the area surrounding Montevideo--a pleasant colonial city resembling Madrid--the firm is a leader in the Uruguayan market. It employs 110 people and features a separate export department.

Originally a major supplier to textile and supermarket sectors with printed polyethylene (PE) and polypropylene (PP) bags, ISMA soon developed the oriented PP market and began producing laminations. Spritzer's background in PE and PP marketing, combined with Uruguay's stability and geographical position, soon made ISMA a leader among Mercosur converters.

Fred Spritzer has led the management team for 30 years. Son Ricardo heads financial planning and business development, and son Andres is in charge of marketing. Both Ricardo and Andres have more than 15 years of flex-pack experience.

Top Equipment, Technology, Materials
ISMA's printing and laminating department is housed in a carefully planned section of the plant next to a state-of-the-art prepress department featuring Scitex equipment. Flexographic printing is done on three presses: an eight-color Comco; a six-color Schiavi; and a four-color press from a company no longer in business. Anilox rolls are from Harper Corporation of America. ISMA also runs a six-color rotogravure press.

Spritzer notes proudly that the company's expertise in flexo printing has been recognized by the International Flexographic Technical Association with more than 25 awards since 1993.

Laminating is conducted on a Profama as well as on a custom-made machine. By the end of 1999, a new Schiavi solventless laminator was to be fully functional. This machine features the latest technology and, notes Spritzer, will make a vital contribution to ISMA's portfolio of laminates.

Adjacent to ISMA's printing and laminating department are the extrusion facilities, featuring five extruders: two from Dolci (Milan, Italy), two from Ciola, and one from a company no longer in operation. Both the PE and PP manufactured are used internally.

Completing the converting operation is a range of slitters and bagmaking machines, located near a fully equipped quality control department.

Representative packaging material structures presently produced at ISMA include BOPP (biaxially oriented polypropylene)/PE (pasta); BOPP/BOPP (cookies); PET (polyester)/polyvinylidene chloride (PVDC)/PE (cured meats); PET/metallized PET/PE (powder drinks); and BOPP/PVDC/white OPP (filled cookies).

BOPP film is purchased from ExxonMobil and Vitopel. Morton Chemical and Liofol supply adhesives. PE resin is purchased from Poliolefinas and Petroquimica Truinfo. Ink suppliers are Belcar and Castiglioni.

ISMA is a major supplier to Fleischmann Uruguaya (Nabisco) and Pepsico Snacks with more than $2 million in sales. Other ISMA customers include Nestle del Uruguay, Unilever, Fideos Adria, Molinos Puritas, and El Trigal S.A.

About 30% of ISMA's production is exported to Argentina and Brazil, where dominant export customers include Terrabussi (Argentina RJR Nabisco) and Pepsico Snacks (Argentina and Brazil).

Adding a Short-Run Niche
According to Andres Spritzer, ISMA has developed a niche market by helping customers who require short runs.

"This development," he explains, "is based on a careful market study performed among our customers. Most of them have serious problems, because they cannot place larger orders of printed material for the whole range of products. No matter what the application is--promotions, strategics, or whatever--the point is that some products in the lines of big companies require very short runs."

Spritzer adds, "The need for permanent change in graphic design, new launchings, and special promotions forces these companies to work with smaller packaging material orders, while keeping a high level of graphics and attempting to control costs. This is one of the reasons we are having success with a new, fast-change flexo system, which allows us to perform extremely short runs in flex pack. This niche has contributed to a quick increase in sales volume."

New Projects Loom
ISMA has a number of developmental projects that will extend further its marketing prowess: an agreement with Neoplastica (Portugal) to supply ISMA's printed lidding stock for fresh pasta and cured meat markets for Mercosur Neoplastica customers; plans to expand the holographic flex-pack business that has been started this year with local and multinational companies; and the startup of a service to print variable information for promotion packs.

As a service for its customers, ISMA is also the Uruguayan agent for several foreign companies involved in the packaging business, including Domino Amjet, EDV, Germark, Markem, Mengibar, Polarcup, Volpak, and Ulma.

The total converted flex-pack market in Uruguay is estimated to be $14 million. ISMA leads the market with almost 60%, followed by Tarplir (20%) and Strong (9%).

Spritzer explains, "Our company is growing continuously. In the past five years we have grown 12 percent each year. We had to make big investments-three million dollars in the last year alone, but this has allowed us to provide the quality and service our customers deserve."

With recognition from major flex-pack consumer companies in the area, powerful production machinery, and a highly professional staff, ISMA is right at home in the big leagues that are the Mercosur flex-pack markets.

Stanley Sacharow has more than 35 years of experience in the flexible packaging industry. His company, The Packaging Group Inc., is an organizer of targeted conferences and a consultant to the international packaging industry and converting industry. He is a contributing editor to PFFC and author of the Package Converting column. Contact him at 732/636-0885; e-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Supplier Information
Scitex Ltd., Herzlia, Israel; +972-9-597-585; fax: +972-9-597-787

Comco Intl. Milford, OH; 513/248-1600; 800/883-5396; markandy.com

Schiavi/Padone, Piacenza, Italy; +39-523-493-1; bobstgroup.com

Harper Corp. of America, Charlotte, NC; 704/588-3371; 800/438-3111; harperimage.com

Industria de Maquinas Profama Ltda, Sao Paulo, Brazil; +55-11-7886-1121; fax: +55-11-7886-1661

Ciola Industria de Maquinas Ltda, Sao Paulo, Brazil; fax: +55-11-272-7025

ExxonMobil Co., Chemical Films Div., Pittsford, NY; 716/248-8320; fax: 716/248-1075

Vitopel SA., Buenos Aires, Argentina; +54-11-4310-9815; fax: +54-11-4310-9835

Morton Intl. Inc., Chicago, IL; 312/807-3468; fax: 312/807-3328

Liofol Co., Cary, NC; 919/319-1933; fax: 919/467-9042

Poliolefinas S.A., Sao Paulo, Brazil; fax: +55-11-247-8981

Petroquimica Truinfo S.A., Triunfo-RS, Brazil; +55-51-457-1006; fax: +55-51-457-1038

Belcar S.A., Buenos Aires, Argentina; +54-11-4371-3416; fax: +54-11-4372-0099

Jose Castiglioni S.A., Montevideo, Uruguay; fax: +59-82-916-1885.

URUGUAY
Uruguay, with a population of more than 3 million people, occupies a strategic position in South America with excellent port facilities and easy access to markets of neighboring countries.

It is the geographical center of Mercosur (the South American common market, created in 1991 and comprising Argentina, Brazil, Paraguay, and Uruguay). Uruguay's capital, Montevideo, with 1.5 million people, is the administrative capital of Mercosur.

Foreign investment has an important role to play in the continuing development of the Uruguayan economy. According to international rating agencies, Uruguay is one of the top three Latin American countries offering the least risk to investors.

Uruguay ranks first in Mercosur based on its economic growth over the decade, having increased its Gross Domestic Product at an average rate of 3.8 percent. The nation boasts the most equitable wealth distribution in Latin America and is the only country on that continent that significantly reduced poverty in the nineties.

Because of its prevailing distribution of wealth, it has been compared to countries such as Denmark by international economic agencies. The investment regime is completely open and does not discriminate between locals and foreigners, even from the legal standpoint. Individuals and companies are free to carry on business in the country--no approval or authorization from the government is required.