Sign, Seal, Deliver: Integral Solution Offers Complete PackageFri, 09/01/2017 - 15:32
The Mexican packaging industry expects production to climb 5 percent in 2017, just as it did in 2016, to produce a total of 10.8 million tons of packaging. As the Mexican Packaging Association (AMEE) points out, everything produced anywhere needs packaging to be transported and sold. That creates room for companies like packaging solutions and logistics services provider Corrubox to not only maintain growth but to increase it.
Corrubox’s business strategy is to develop its participation in the supply of logistics services, from packaging-material management to road logistics and storage. “We work with 60 percent of the automotive market in Mexico. This is possible thanks to the OEMs making consolidated purchases of packaging. OEMs sent Corrubox as a service provider to some of their auto parts manufacturers, which allowed us to gain this leading positioning,” says Rafael Mora, Commercial Director of Corrubox México.
Corrubox’s solutions include a rapid-service offering that provides temporary assembly plants and storage for three or four-month periods. These facilities store parts that the industry manufactures frequently, improving the flow of packaging and logistics. “We manage packaging from the raw material to assembly, handle JIT stock, packing lines for the clients and then store products until they are sent to their destination. This saves our clients time and money, which makes us competitive in the sector,” says Mora.
Logistics services have been booming in Mexico and Corrubox provides the competitive advantage of offering the raw materials for safe transport of products without needing third-party suppliers, which helps keep costs down. The main competition is from foreign companies but Mora says his company stands out because of its economical service and its familiarity with the local market. Providing a solution that meets all logistics needs, from packaging to delivery, is a more substantial business model than most companies currently manage and has resulted in growth of 35-40 percent per year, says Mora. In 2017, Corrubox projects 60 percent growth thanks to industry demand.
Corrubox’s first contact with the automotive industry is via OEMs, through which it has a relationship with 90 percent of the auto parts industry. The company has supplied Mazda and Honda, and works with Ford, GM, Volkswagen, Audi and Nissan. Corrubox is starting to support FCA’s operations. The only OEMs it does not service are Kia and BMW.
“The lack of services from general packaging manufacturers left a gap in the market that became Corrubox’s area of opportunity,” says Mora. Industries like automotive know the risks of halting a production line because Tier 1 and 2 suppliers have to regularly hold stock for some manufacturers. Clients may run into problems when their suppliers cannot meet short orders, so they have to keep high volumes of inventory. “With good suppliers that meet orders, automotive clients like OEMs do not need huge stocks. This saves on warehousing and logistics costs,” says Mora, whose company aims to be that reliable supplier to automotive companies.
Mora says one of Corrubox’s advantages is its flexibility to tailor its offering, providing an integral solution from the beginning of packaging production to the product’s delivery. To adapt, the company has a skilled engineering area with 20 years of experience supported by the imagination of capable young talent and can adjust packaging from the developmental stage. The company’s just-in-time (JIT) delivery allows it to stand out as a candidate to handle deliveries for production lines, as companies have stock on hand when needed, creating further savings.
More than half the company’s operations are focused on the automotive sector but the company is looking to grow as a logistics solutions provider. Corrubox’s success was derived from its service to Mexico’s automotive hubs.
Mora sees opportunities beyond Mexico as well. Between 2018 and 2019, Corrubox plans to open locations in the US, starting with a branch in Texas, and is sketching plans for another in Detroit because many suppliers based outside of Mexico supply local OEMs. The main challenge will be labor, which is more expensive abroad, making it harder to replicate the successful business model Corrubox has used in Mexico.