Unexpected Consequences

How Brazil is Influencing What is Happening in the US...


Years ago, it was thought that Mexico could serve as the economic engine for the rest of South and Central America. Our industry, which was very big, conducted a major trade show every other year in Anaheim; however, when all of the industry prophets decided to support such a trade show in Mexico City, most of the business left Anaheim and showed up in Mexico. This was the beginning we thought! And it was and I suspect it still is for packaging industry which is important because of the petrochemicals that it uses and the very fact that it touches virtually every industry. So what happens in packaging affects what happens in most industries; and what happens in most industries affect packaging. Therefore, this reciprocal relationship is worth following for its trends, impact and other tendencies. . Packaging is not necessarily a bellweather industry; more often than not it trails the rest of US industry....so when recession strikes, it is the last area of business to be affected.

Like most other industries, packaging has been impacted by the cost of petrochemicals. Consider that plastics are the fundamental component of most packaging which includes pallet wrapping at one end to packaging of small things such as disposables used in the medical industry. They all employ plastics to one degree or another. Consequently, when petrochemical costs rise, everything in the supply line is affected.

And while Mexico does market to the rest of South and Central America in increasing volume, the progress is being made further south. The real visionary model is turning out to be Brazil which its bold commitment to alternative energy. In this, they are way ahead of America although Ford cars and GM have adapted vehicles to run on fuel made fundamentally from sugar.

Yesterday, I met with Senator Carper junior senator and long term office holder for Delaware. He said that he's been having meetings with the automotive industry in Detroit and with Honda and Toyota to discuss alternative fuels. He said Honda has produced a car that operates on both fuel cells and conventional power. They also showed hydrogen models that could also fuel your home the entire year with enough left offer to return to the power grid.
He also talked about efforts to go a step beyond Brazil by coming up with technology for using not only the corn for Ethanol but to create fuel from the entire biomass, the husk, the stems, etc. DuPont now has an eighteen million dollar grant to do that and they are apparently making grand strides to come up with a lower cost alternative to conventional fuel.

Les Aaron