When, in 1995, Resilux, the Belgian manufacturer of polyethylene teraphthalate (PET) preforms and bottles, was contemplating setting up a production unit in Spain, the company ran its slide rule over several potential sites. The rationale for foreign expansion was the company’s strategic focus on the global spread of risk and maximum market flexibility.
“This was to be the company’s first overseas venture,” says José Luis Quiñones, general manager of the Resilux plant in Higuera la Real, an industrial site near Badajoz. The company trades under the name of Resilux Ibérica Packaging. “Resilux had considered potential production facilities in central Europe, Greece and Italy. Spain was finally chosen for various reasons. For one, the country already had a significant PVC and polyethylene production capacity. Spain is also a stable market offering attractive investment incentives.” Financial incentives were a major consideration for a capital-intensive manufacturer and this enabled Resilux to grow its production capacity quickly.
The next task was to select a Spanish region in which to build the plant. The company looked at Navarre in the north, as well as Andalusia. The southern region emerged as the logical place to operate because, among other reasons, there was no competition within a 1000-mile radius.
Resilux finally settled on Extremadura, where investors have easy access to the regional government, according to Mr Quiñones. “In Madrid, for instance, you are just another foreign company, whereas here the regional officials are always happy to discuss your projects, and the government was happy to welcome a business such as ours,” he says. “Decisions on an official level are taken faster here than in other regions.” Unlike northern Spain, however, Extremadura was not active in the world of plastics production.
“Location was also a factor in the decision to come to Extremadura. We are virtually next door to Portugal and within easy transport distance from the ports of Algeciras, Cádiz and Seville,” says Mr Quiñones. Apart from sales in the domestic Spanish market, Resilux exports a large percentage of its output to nearby Portugal, as well as to Africa and Latin America. The company has a staff of 43 employees, most of whom are highly skilled workers.
Preforms are the core business of Resilux, one of the world’s top companies in the PET packaging market. The preforms are blown into bottles by Resilux or by the customer and then filled with water, soft drinks, edible oils, detergents, milk, beer, fruit juices and other products. Since production began in Spain, the company has set up units in Greece, Hungary, Russia and Switzerland. In 2000, Resilux also signed a joint venture with the US firm Summit International.
The Spanish company’s production capacity has risen from 540 million preforms four years ago to 800 million today, making it Resilux’s top foreign manufacturer, accounting for 15% to 18% of total group output. In terms of profitability, the Extremadura plant also ranks first among group subsidiaries. Sales were €45m last year and Mr Quiñones expects this figure to grow between €50m and €55m in the near future.