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Canadian Packaging Machinery Market Research Report - PMMI

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proximity to Canada combined with the facts that the two countries have similar,<br />

linked economies and similar consumer societies. Areas mentioned in these<br />

ratings included availability of repair parts, rapid response to problems and good<br />

training support. A number of respondents stated that they use North American<br />

suppliers because of shorter lead times and lower cost of repair parts.<br />

• The price of U.S. packaging machinery is viewed to be “Good” to “Average” by<br />

most respondents, although particularly after the impact of the exchange rate is<br />

taken into account, a significant number also feel that U.S. prices are somewhat<br />

expensive. The favorable movement in the exchange rate since the beginning of<br />

the year should begin to positively impact the impression of purchasers as they<br />

undertake future purchasing.<br />

• As might be expected, <strong>Canadian</strong> packaging machinery manufactures received<br />

very positive ratings both regarding the service they provide and the prices they<br />

charge. Virtually all respondents felt that <strong>Canadian</strong> prices were “Excellent” or<br />

“Good” and their service was rated the highest, significantly above European<br />

competitors.<br />

2.7 PACKAGING MACHINERY TRENDS<br />

There are a number of significant characteristics of the <strong>Canadian</strong> market that shape<br />

the demand for packaging machinery in the country that should be understood to put<br />

the report contents in context. At the same time, there are a number of trends and<br />

forces taking place that influence demand. Some of the most important are:<br />

• Canada is a much smaller market than the United States so this results in smaller<br />

production runs and a greater variety of products turned out by most production<br />

lines or facilities. As a result, goods producers place a high emphasis on<br />

packaging machinery versatility and fast changeover capability.<br />

• Many of the major <strong>Canadian</strong> goods producers are foreign owned with many<br />

having U.S. parents. As a result, many purchase decisions are directed from the<br />

U.S. and some companies purchase all their packaging machinery needs through<br />

the parent company. There appears to be an increase in such companies<br />

utilizing their U.S. resources for purchasing. For example, the packaging<br />

machinery purchases for one of the largest snack foods companies in Canada is<br />

entirely directed through the United States engineering group. Also, foreign<br />

subsidiaries frequently purchase the same type of machinery used by their parent<br />

facilities.<br />

• With the trend toward globalization, there appears to be some movement to focus<br />

specific plants on production for larger market areas. For example, the Estee<br />

Lauder plant in Toronto has a worldwide mandate for the production of mascara.<br />

• With the large proportion of <strong>Canadian</strong> firms using imported packaging machinery,<br />

exchange rates play a major role in determining whether specific brands or<br />

sources of machinery are affordable. With the recent improvement in the<br />

exchange rate between Canada and the U.S., this will likely impact the sourcing<br />

of future packaging equipment purchases.<br />

SMG/Columbia Consulting Group Page 22

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