Story | 06/23/2015 07:38:00

Label market lifts off in Mexico

Want to be a part of the newest boom market for labelstock? Build your business in Mexico.

This advice comes from Jose Garcia, UPM Raflatac Sales Director and General Manager for Mexico, Central America and the Caribbean. UPM Raflatac is doing just that. The company has recently opened a new service terminal in the bustling city of Guadalajara, the country’s third-largest metropolis by population and economic activity. With two terminals in Mexico, several warehouses, and plans to upgrade its service network, UPM Raflatac is making a solid commitment to this vital market – and the company’s Latin American growth story.

UPM Raflatac is not alone in turning west to Mexico, as other label manufacturers are also making significant investments in building out their infrastructure. So how is UPM Raflatac standing out in such a competitive market?

Fighting price wars with quality

“It’s not easy,” acknowledges Garcia. The market is still extremely price-driven, and glue-applied labels still dominate as the label technology of choice for many printers. Consequently, many pressure-sensitive label manufacturers are engaged in a punitive price war to win business.

UPM Raflatac has chosen to go a different route:

“We are well-known as a high-quality and high-service company. That is a fact. So even though there are nine players in the market, we are at the top of the list. We will let others fight on price,” says Garcia. While product decoration in emerging markets often lags behind mature markets, “Our labels and materials in Mexico stand on their own against any player in the world,” he states proudly.

That quality message and experience is one that’s resonating with customers. The Mexico operation is witnessing significant growth year after year. “Customers are willing to pay a little bit more if they get a great quality product and excellent service,” says Garcia.

“To succeed in Mexico, you have to know it’s about service, service, service.”

“Big end-users are as – or even more – demanding as they are in the U.S.,” he adds. “They want the best of the best. They might compromise on lower-end products like shipping labels, but not when it comes to consumer - facing products where presentation and performance are everything.”

Priming the pump for high value

Currently, UPM Raflatac’s business is fairly evenly split between papers and films, but Garcia sees that changing. “Every day, companies and consumers are getting more sophisticated, and because of that, business is growing. We are also seeing more demand for specials labels. He singles out prime films and special solutions as key areas for growth. “All brands, not just pharmaceuticals, are seeking security measures to prevent counterfeiting. They come to converters and ask for labels that can help them protect their products.”

Garcia’s team in the region includes Alberto Hidalgo, Country Sales Manager, Mexico, Sergio Ponce, Territory Sales Representative for Central America and Celsy Arauz, Territory Sales Representative for the Guadalajara area, as well as several dozen production staff. “You can’t imagine how proud I am of our team. They have the industry knowledge and expertise, and that is key to thriving in this market,” he says.

Garcia says that UPM Raflatac is also making behind-the-scenes investments, such as winning ISO 9001 certification for its Mexico terminals and Forest Stewardship Council® chain-of-custody certification for the paper products it uses in manufacturing. It also was the first label company in the country to receive the ESR (Empresa Socialmente Responsible) certification from Cemefi, a Mexican philanthropic organisation, acknowledging a commitment to its employees and the communities it serves.

Listen, learn – and change

Another secret to UPM Raflatac’s success in Mexico is the company’s willingness to change.

“When we meet with our customers, we ask them about their experiences with us and how we can improve. It’s not possible to change or say yes to everything. However, sometimes you hear one or two things you can improve to make your service better,” says Garcia.

Garcia’s vision is nothing short of market leadership.

“Within two years, we hope to be the number one company selling labels in the market. I believe we have everything we need to make it happen.”