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Colombia 2016 | INDUSTRY | INTERVIEW

TBY talks to José Luis Mora, General Manager of Litoplas, on how the packaging sector has weathered recent macroeconomic storms and how it is leveraging technology to better serve customers.

José Luis Mora
BIOGRAPHY
José Luis Mora is a graduate in industrial engineering from the University of Central Florida and has a masters in manufacturing with an emphasis on manufacturing plastics. He started to work in Litoplas in 1984 and has 32 years of experience in managerial positions at the local level and solid knowledge and experience in business management operations and development of business growth strategies. He has been General Manager of Litoplas S.A. since 1997, providing an innovative and avant-garde vision. He is also on the board at the Chamber of Commerce and Combarranquilla.

How do you evaluate Litoplas' performance in 2015?

It was a challenging year due to the macroeconomic trends in Colombia and the region. We underwent a transformation and adaptation process to increase our competitiveness. For example, we upgraded our technology, which enabled us to close the year with strong growth of around 32-34% in turnover and 11-12% in volume. The currency devaluation in 2015 helped us to be more competitive both in domestic and international markets, where we have become more competitive exporting our products and services. Decreasing oil prices did not have a big impact on our operations, but they did create volatility. In Colombia, availability and competitiveness within the energy sector has suffered from last year's trends because production costs are greatly linked to oil prices. This situation generated uncertainty and high levels of inflation. In such a challenging context, we have become more focused on the food industry, a segment that has not suffered as much from lower demand as other segments have. We directly export 8% of our production, but the level of our indirect exports is above 25%.

What growth opportunities is Litoplas looking at in 2016?

We will invest in new production equipment that will increase our production capacity by 25%. All of our investment in machinery and equipment is always aimed at increasing unit volumes. One of the key elements in our industry is efficiency and to achieve that you need to invest in technology and equipment. Over the years, industrial reconversion also becomes essential, especially with old machinery and equipment.

What opportunities and gaps do you identify in the market?

The market is well served with high quality companies; however, there are opportunities in terms of consumption across social strata where people do not consume much flexible packaging. For example, people from strata 1 do not consume flexible packaging at all and currently around 35% of Colombia's population are from that strata. Also, consumption per capita at the moment is around 8% below levels of developed countries. We have to educate the public that flexible packaging has more advantages than glass or other rigid materials. Also, we have the advantage of being more environmentally friendly than other packaging types and driving innovation up in the industry. This target audience offers many growth opportunities.

How does Litoplas invest in innovation?

Being an underdeveloped country has its advantages; you have the opportunity to travel to other developed markets and learn from their experiences. In this context, one of our competitive advantages is flexibility and adaptability. Therefore, our focus on innovation goes towards that adaptability of foreign experiences and knowledge of our reality.

Who are your main customers?

We are a B2B company with a strong focus on protecting the goods of our customers. Our responsibility is to enable customers to provide the market with their products that have the same characteristics and shapes as when they are produced. One of the main challenges for us when serving such large customers is flexibility in packaging, especially because the packaging not only protects the product, but also communicates for the brand. From a logistics point of view, serving these big brands and their several products requires flexibility and a great deal of responsibility, for they are well-known brands that communicate a great deal through their packaging.

What is your outlook for the economy of Barranquilla in 2016?

We need to strengthen the industrial network and the synergies between the industrial sector and companies, as well as between the public and the private sector, bringing the conversation to the academic sector as well. We have the opportunity to secure faster growth rates in Barranquilla than in the rest of the country. Barranquilla also needs to take even more advantage of its privileged geographic position and its surroundings to boost exports, as we do not face large logistics costs.