Unipac's Commercial Director talks about crop protection product packaging market
May. 22, 2020
Mauro A. Fernandes
Fernandes is a mechanical engineer who graduated from the Federal University of Santa Catarina. With over 33 years of experience in commerce and supply chain gained in the telecommunications, automotive and polymer transformation industries, Fernandes started working for Unipac 12 years ago as Manager of Purchases, and now holds the position of Commercial Director.
Unipac is part of the Jacto Group, which has a history of over 70 years, a presence on five continents, and is composed of six companies operating in the sectors of agriculture, foundry, polymer application technologies, transport and logistics, handling and storage, cleaning and medical equipment.
Unipac focuses on its strategic objectives in the plastic transformation segment, giving customers added-value through its goods and services. Its goal is to offer innovative solutions that integrate services and technologies for the application of polymers, adding value to the chain.
It is one of the most complete industries in the country, as it performs six transformation processes in its various industrial parks, therefore, becoming a reference for national and international companies.
1. Unipac operates in several market segments, such as automotive, handling and storage, and packaging for crop protection products. What is the allocation of the last market in the company's revenue? What is the current strategy for operating in this market and what are the company’s new plans for 2020 and the coming years?
The Packaging division represents the largest share of UNIPAC's revenue, where we serve Brazil's leading pesticide manufacturers.
Our strategy is to provide a differentiated value proposition, through offering high performance packaging, secure supplies, and personalized services with innovation and sustainability projects, while taking into account new technologies in terms of products and processes. We have over 10 years of experience in house operations, with several successful cases.
2. Unipac is a pioneer in the national development of the plastic reservoir for backpack sprayers and the manufacturing of rigid plastic agrochemical packaging in Brazil. What research and innovations have the company developed to improve pesticide packaging while considering environmental impact, performance and cost? What are the trends in this market?
We have supported customer development teams from the conception of their packaging, with a design suitable for the application and adaptation of products for each filling line.
We have allocated many resources to seek the best type of materials, mechanical structures and weights of packaging according to the needs of each client, with the aim of achieving the best cost-benefit ratio.
As a result of these efforts, we were successful in approving the lightest packaging in the Brazilian market, “20L Mono,” which is 13% lighter compared to the market reference. From the point of view of sustainability, we have several initiatives in progress, including producing packaging with recycled resin known as RPC (post-consumer resin).
This trend will continue the development of small packages, up to 20L, due to the launch of more efficient molecules.
3. Brazil imports pesticides already formulated and packaged, but most of them are still formulated here in the country, therefore, the demand for pesticide packaging depends on the strategy of producers to locally formulate or not. What is the potential demand for packaging in Brazil this year, especially in the current scenario of quarantine and economic slowdown? In your portfolio of markets, what is the main market that will be affected?
We recognize the difficult situation we are going through as a society in the face of the COVID-19 pandemic, and we have implemented a series of safety and prevention measures to protect our employees and partners. In the packaging business, we are commited as an important part of the food production chain and considered as “essential.” Therefore, our operations are running at full cadence.
Our outlook for agro remains positive, even in the face of an economic slowdown. We had an interesting first quarter in terms of packaging demand, and we have continued to align strongly with our partners regarding forecasts for the harvest season.
As for the other businesses we operate, the effects are more concentrated in segments related to the automotive industry, heavy vehicles and handling and storage because of the economic slowdown. Together with our customers and suppliers, we have evaluated alternatives for mitigation.
4. Within the pesticide chain, packaging is in the middle of the process, from delivery to the property, application and return. What is the impact of packaging on this chain from the points of view of the supplier and rural producer? Are there any effects on the production cost of these consumers related to the types of packaging and technology used?
The criterion for deciding on which packaging to use is closely related to the size of the property, the region of the country and the farmer's own profile.
UNIPAC has a complete portfolio, so we are able to serve our partners to deliver the best solutions to rural producers.
The packaging cost has a low impact on the rural producer, but it varies according to the packaging and technology used. For example, packaging with or without a barrier, virgin or recycled material, and so on.
From the pesticide manufacturer's point of view, packaging with mono technology, so manufactured with only one type of material and used in water-based product classes, has a lower acquisition cost compared to barrier models, which are used in classes of solvent based products.
5. Regarding the disposal of packaging, Brazil has become a world reference in the reverse logistics of empty plastic packaging for pesticides, with 94% being recycled or incinerated, a project that is part of the reverse logistics program organized by InpEV. How does Unipac contribute to this reverse logistics system? Can you reuse the packages recycled by the program?
We are duly committed and aligned with the concepts of a circular economy. In our several projects in different segments, we adopted the concept of conscious product design and the use of more sustainable technologies and materials. We have launched, for example, traceability and reverse logistics projects for industrial logistics handling packages, as well as projects for incorporating natural fibers using post-consumer resin (RPC), among others.
Specifically, for the pesticide packaging market and the aforementioned initiatives, we invested in creating a portfolio that offers our customers packaging options, which can be recycled for different classes of pesticides, increasing the recycling rate of the reverse logistics process established by InPEV.
6. Agribusiness in Brazil, even in the midst of the current pandemic, is still showing growth in 2020 and should be one of the country's leverage sectors for economic recovery in 2021, which will affect demand for pesticides. How does Unipac see the growth of agribusiness in the coming years? How will the company position itself to contribute to this growth?
In general terms, from 2018 to 2019, the dollar revenue of the pesticide market grew significantly, around 17% according to the data we analyzed, which is very positive.
We work internally with the perspective of new growth for the next 30 years in the order of 3 to 4%, based on increasing planted area and productivity and adopting new technologies and solutions, to overcome resistance to fungicides and herbicides.
Our positioning will continue to be focused on our customers, through competitive and innovative value proposition supported by the search for operational excellence, as well as our constant investments in the acquisition of the latest generation blowers and other technologies used in the production process, which will bring reliability and variety to customers with whom we have strategic alliances.
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