Victor del Abrego
Director General
D'Ortega
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Digital Printing Changing Lithography Business

By Gabriela Mastache | Wed, 04/08/2020 - 18:24

Q: How has D’Ortega’s business evolved in the Mexican industry?

A: Litography D’Ortega is a Mexican family business that has been in the market for 52 years. Throughout these years, the company has gone through different growth stages. For many years, D’Ortega was 100 percent a supplier of the Nestlé factory in Lagos de Moreno. In addition to Nestlé, Kodak was an important client. However, Kodak’s disappearance and a negative situation with Nestlé led to a negative financial environment for company. After this, stockholders started working to institutionalize the company. Throughout this restructuration process, we had the full support not only of our stockholders but our workers, the union and some suppliers. We made long-term agreements that remain valid today.

The company has specialized in packaging that is known as folding carton and complemented this with litho-laminated products. The use of litho-lamination allows for the construction of a box that is more robust and that provides more protection for a heavier product.

Q: How is D’Ortega tackling the sustainability challenge that the industry is facing?

A: In Mexico, there has not been an industrialization of the forest, which means that the Mexican market lacks a cellulose industry. However, demand in the Mexican packaging market totals 8 million tons of cellulose per year. Almost all players in this industry in Mexico use recycled material and D’Ortega is no exception. Mexico is among the countries that has the largest degree of reutilization of raw materials for carton manufacturing. Cellulose material can be used up to 10 times before it starts to degrade.

Since the country lacks a cellulose industry, we are forced to import material for our production. Moreover, there are some products that require raw material that is not recycled. Still, it is important to note that manufacturers of recycled materials comply with all FDA requirements and other innocuity certifications.

D’Ortega uses local raw material and when a client requires an imported material, we have to comply with that demand. Because of the industry and the market segment in which we play, we have had to complete a series of certifications that endorse that our industry can manufacture with trustworthiness products for different clients. We comply with ISO-9000 for quality and with FSSC (Food Safety System Certification) 22000, which is for food safety. To be a supplier to Nestlé or Kellogg’s you need these types of certifications.

 

Despite industry efforts to reduce waste, there are still certain occasions where the packaging of the product is unnecessary. Sometimes the type of carton that is used is not recycled and sometimes the carton packaging becomes unnecessary since the additional protection it provides has no major relevance because the product is already being protected and has no contact with external elements.

Q: How does D’Ortega continue working to expand its presence in more markets?

A: For several years, D’Ortega was a regional company; however, in the past few years we have worked to increase our presence not only in the region but nationally. We are being selective because we have to always maintain our competitiveness. Moreover, we work on being competitive in the way we transport our products to our clients.

A strategy we started implementing a few years ago was to look for clients abroad in certain market niches, where we could be competitive in terms of price and quality. Following this strategy, we have entered the US market. Today, we have clients in Atlanta, Houston and California, and they represent around 25 percent of our total billing.

Q: In what specific niches does D’Ortega operate?

A: A natural market for our company is the food and beverages industry, the chemical-pharmaceutical industry, beauty products and some other smaller niches. Around 40-45 percent of the players in the industry participate in these niches.

As with other industries, the lithography sector has entered a diversification process. The industry used to be highly profitable in as much as we produced large volumes of printing and low product variability. Today, variability has become the norm and we have lower printing volumes. Whoever manages to dominate these conditions will have the possibility of being predominant in the market.

Q: What trends is D’Ortega observing in the lithography business?

A: The volumes in the industry are becoming smaller. There are rapid changes and variable data is becoming increasingly important. Safety codes or other security elements are also important.

Digital printing also has arrived to the industry.  Although it is more expensive than conventional printing, it allows for personalization. Though we do not know if digital printing will substitute conventional printing, we believe that it will be the natural evolution of the market. Previously, digital printing only existed for large formats, meaning billboards, but it had relatively low resolution. The revolution the industry has experienced extends to the materials on which printing can take place. We can print on materials of up to 24 microns, on plastic and metal.

Photo by:   MBP
Gabriela Mastache Gabriela Mastache Senior Journalist and Industry Analyst