December 19, 2018

Is still profitable making aluminium foil trays?

“Who Moved My Cheese? ” is the right question! 

As written by Spencer Johnson in his famous book, if you don’t know it could be a short and interesting read.

What does it mean?

The market of food packaging is directly proportional to the habitants of the planet. This is a fact. As soon there is somebody to feed there is a need of something to pack the food. This mean YES, there is market.

In addition, we are living the moment of the plastic-ban, this mean that many packaging solutions need to be completely replaced with non-plastic packaging: aluminium foil and paper are two of the easier material to use at the scope. This mean YES, there is growing market open to new things.

Market does not mean profit, of course, but means numbers. Numbers are the key.

On the market there are many different solutions and is not easy to choose the right one to start or to remain competitive on this business.

Somebody (mainly Chinese equipment manufacturer) wish to convince you that with investments at fraction of the European machinery will give you back same amount of profits, because “end user doesn’t care what machine has been used to produce the trays”.

And the point is exactly here: you will be the only one who feel the difference, because you’ll use the machinery, you’ll pay the salary to engineers that need to continuously repair the machines, you’ll pay the precious raw material converted into broken useless trays… for sure not the end user! Forget the legend to start with something cheap that will give you money to pay something good next. This strategy never works in this business. Do not trust who want to convince you that with 50.000 USD investment you can have back same amount in 12 months in profits. WOW!!! This is a dream!!! Just think how this strategy can give you an advantage against any other competitor you’ll get into the market. Seems like competiting in car race Formula 1 running an old used car thinking to win some race to get money for a better car… isn’t it ridiculus?

You’ll agree that if you want to win something you must create a good team, good sponsors, good engineers, good car… you must be well prepared, well supported, well informed.

You should focus on the numbers if you wish to get any profit from any kind of business. The profit in this business is related to massive quantity and small profit over each piece produced, this is another fact. This basic concept requires to set-up the business in a precise way:

  • Minimum amount of manpower
  • Maximum efficiency from the machinery
  • Minimal loss of raw material
  • Wide range of products
  • Efficient management and company setup

The approach to solve these requirements involve a lot 2 things: automation and control of production. Automation will save the manpower, control of production will tell you just in time if something is working good or not: a strong help to use in a efficient way your precious resources.

Continuously run the machinery, less use from manpower, automated and detailed monitor of the production are foundamental part of the strategy. Than, yes the business is profitable, you can win, prepare your team and be well equipped.

 

Authored by:

Marco Capra

CEO and founder of Anistek Mechatronic GmbH

19/12/2018

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