Bananas Are Procarsa’s Bread and Butter
IF YOU make a corrugated box in Guayaquil, Ecuador, there’s an excellent chance that it will end up being filled with bananas. They’re that big a crop in Ecuador. Just look at Guayaquil-based Procarsa: More than 80 percent of this box maker’s business comes from banana producers.
The 300,000-square-foot, ISO-9002-certified operation, headquartered in the second largest port city in western South America, is owned by the Dole Food Co. Sixty-two percent of the boxes it makes are for Dole products. Eighty-four percent of all the boxes it makes end up filled and shipped outside of Ecuador.
“The main demand of banana box customers is receiving their boxes on time,” says Tim Blanc, general manager. “They have vessels waiting at the port. There’s no leeway. We’re also finding that more of our customers want to audit our quality. They do it and we gain a chunk of their business.”
Another banana business fact of life for Blanc is cycles. The banana high season in Ecuador is February through April. During this period, Procarsa will average 1.5 million banana boxes a week, with average runs of 100,000. The company makes another half million boxes for the flour and edible cooking oil industries.
“More of our customers want after-sales service,” states Blanc. “This includes training their inventory personnel and troubleshooting for them. They want us to solve problems on the box filling line. Bar code demands are increasing too. They’re coming on as a requirement.
“Food processing customers here want their boxes wrapped in plastic. In addition, usually our customers get their boxes in bulk. They’re taken on and off trucks without any pallets.”
When Can I Get Them?
Delivery times are just as pressing an issue in Ecuador as they are anywhere else. At Procarsa, a two-week cycle between order and delivery is the norm, although exceptions abound, from within 48 hours to within a week.
Blanc closely tracks these delivery times. The computer allows him to pinpoint how long it takes both emergency and non-emergency box orders to arrive at a customer’s doorstep.
Although Procarsa has one designer that uses Artios software, most of the boxes that leave the plant aren’t intricately designed. Nevertheless, occasionally a customer will come in with a design idea and ask whether or not Procarsa can pull it off. Thanks to the package design research that Dole has done throughout the world, the answer to these design questions is usually yes. In fact, right now Procarsa, which has annual sales of $68 million, is working on six such customer design projects.
Blanc knows that even though Dole is a major customer of Procarsa’s, it’s not the only customer. The other customers want the same amount of service as Dole receives.
“Several box plants in Ecuador can do a job,” he says. “But we have made a commitment to service that includes aftersales and a willingness to interact with customers. Quality control has evolved from in-house inspections to being the customers’ main service provider. Today we’re sending out our quality department people to educate the customer on box defects and give troubleshooting pointers. We’ve even developed a manual and a seminar on these topics.”
Reasons for Low Turnover
Procarsa, which has been making boxes since 1992, has also taken the time to develop its employees. The plant’s low turnover is attributable to the benefits it provides its skilled labor. Perks include a hot meal each work day; full uniform; transportation to and from work; a medical clinic in the plant with an on-duty doctor 20 hours a day; medicine; and medical care for the families of employees.
“At the end of each year we give employees a certain amount of money for each of their children so they can buy them Christmas presents,” states Blanc. “We also rent a place and put on a Christmas party with a meal for everyone.”
Procarsa pays its employees about $3 an hour, which according to Blanc, is double the hourly compensation paid both box making and industrial workers in Ecuador.
“You can’t fire someone in Ecuador unless they break a work rule,” he adds. “If you do have to fire someone, you have to pay 25 months of salary. So once someone is employed here, it’s a very secure job.”
Not being able to fire someone easily is the least of Blanc’s concerns. Last March Ecuador had a banking crisis that saw a number of its banks temporarily shut their doors. The crisis was caused by the devastating effect of El Nino rains and floods on Guayaquil’s shrimp-farming and banana-growing industries over the past year. Blanc estimates that El Nino eliminated about 35 percent of business in Ecuador, which is still recovering from the unusual weather patterns.
Last March the banks in Guayaquil froze half the money in all accounts for a year. This dramatically affected Procarsa’s ability to pay its bills and its employees.
“We received tremendous pressure from our employees because the cost of their basics, including food, electricity and gas, significantly jumped in cost,” Blanc says. “For a while we couldn’t ship boxes because the highways were closed. It was a short-term situation but it did hurt sales.”
But it will take more than a banking crisis to hurt Procarsa’s resolve to make quality banana boxes Ecuador Presents Box Making Challenges
Procarsa uses two corrugators to make its board. The first is composed of an 87-inch Langston 380 B- and C-flute singlefacer, a Simon Shortpress, a newly-installed Marquip cutoff knife, and a downstacker from Taiwan. Because of all the banana boxes made at this plant, 40 percent of the board made on this corrugator is doublewall.
The second 87-inch corrugator has United singlefacers, a Marquip knife, and a Taiwanese downstacker. Harper/Love supplies both these corrugators with starch. They produce about 100,000 metric tons of board a year.
Converting equipment includes six flexo folder-gluers (one three-color Ward; three three-color Koppers/Uniteds; a three-color S&S; and a three-color Simon) and a sheeter that makes pads for banana boxes. Three of the flexo folder-gluers are devoted 100 percent to making banana boxes.
Let it Flow
One of the challenges that General Manager Tim Blanc faces is keeping the electricity flowing.
“There’s uncertainty when you work with governments that come and go,” he says. “Electrical generation is a government issue and you can’t count on it.” So today the plant generates its own.
Yet another challenge is working with customs officials to get roll stock from the port to the plant.
“There have been times when we’ve been unable to get imports in because of tax payments to customs,” Blanc states. “Customs knows they can grab rolls as collateral. That’s why we have an open mortgage on this property. We need to put the mortgage in dollars. But customs will only work in sucres (the local currency). At times we can’t process imports timely because we have to get approvals (from customs) to increase their value. So we run around like crazy to do the paperwork, causing delays.”
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COPYRIGHT 2008 Gale, Cengage Learning