Sipa

A new, important supply contract in Latin America for SIPA, a leader in the field of solutions for the beverage bottling industry.
And it is, indeed, in virtue of its natural ability to compete on the market as an efficient partner able to provide 360 degrees innovative solutions (from the PET granules through to the palletized bottle) that the company chaired by Gianfranco Zoppas has been selected by EBC, Ecuador Bottling Company, the only bottling enterprise in the Latin American country and holder of an exclusive contract for the distribution of Coca Cola products in that country. The spirit of this new partnership and all its details are described personally by Erich Rey, general manager of EBC, who recently visited the plants of his prestigious Italian supplier, which is also renowned for being the leading player in the HF technology sector on the Chinese market. Mr. Rey visited several HF plants supplied by SIPA in China that is well known as the first market in the world for HF technologies.
EBC: an important enterprise, which is the outcome of a significant evolution. Could you briefly describe the salient moments in the history of your company?
"Today, EBC is the only bottling company in Ecuador that has an exclusive contract with Coca Cola for the national territory. Our story begins with the merging of 5-6 small bottling companies in 1999. After the merge, we grew into the company we are today, a company that provides employment for approx. 3800 people and which owns three production plants: one in Quito, the capital, one in Guayaquil and one in Santo Domingo. We do not have our own brands but we are exclusive distributors of Coca Cola products".
In the Ecuadorian CSD market, the leadership of EBC is undisputed. What are the other strong products and what innovations are on the cards?
"We do effectively occupy a position of leadership. We have penetrated a variety of markets: we have a 75% share in the CSD market. We have a 14% share in the water bottling market, and are the second in importance in the country. In the sports drink market, with Powerade, we have approx. 7%. We are currently entering the fruit juice market".
Among your recent developments was the decision to change from the purchasing of containers to producing them internally. Is this investment motivated by the growth of your market or by a specific need for differentiation?
"Initially we relied upon a supplier who provided the resin, the performs and the bottles in-house. We then began purchasing the resin directly from CEPG (Cross Enterprises Purchasing Group), a partner of Coca Cola, controlling the margin of the resin supplier on the bottles we sold, but still in-house. Finally, we became autonomous also for blow molding, through verticalization. We now buy resin from CEPG and preforms from our usual supplier. Our choices have also been motivated by cost considerations, which led us to invest in our own machines".
What criteria are used by EBC for supplier selection?
"The criteria are based on the certifications of the suppliers provided by Coca Cola. For this reason, we are not free to decide independently which supplier to use, unless it is included on the list of those selected by the company. And this is the first criterion, the first condition affecting choice. Secondly, an internal selection process is then implemented, for choosing from among these certified suppliers, through an assessment grid which considers technical skills and service standards as well as, of course, economic conditions. SIPA, which is naturally a certified supplier, obtained a very good assessment due to the fact that it belonged to the Zoppas Industries group, thus scoring high on economic stability. SIPA's references, collected through the experience of other bottling companies who had used its technology, were also important. In any case, the chief factor in the selection in this particular case was the capability of the supplier to offer us a complete line. This is a fundamental factor, especially for our Guayaquil project, for which all the elements of the line had to be assigned to the responsibility of a sole supplier. So when the criteria assessment grid was applied, this series of plus points ensured that SIPA came up tops".
To become, first and foremost, a partner: this is the aim of many suppliers. Have you created a relationship of this kind with SIPA?
"As in all relationships, there was a process of mutual acquaintance which has now developed into a sound partnership. We started to get to know each other and to work together to find solutions to the problems which inevitably arise when ambitious projects are developed. We worked together harmoniously with the common goal of resolving our problems in the best possible way. It is certainly true to say that a partnership is built over time through a relationship of shared learning and growth. The initial prerequisites were all there, however, because on the one hand SIPA was striving to enter the South American market as a line supplier and for us, it was the first project of such dimensions".
In the partnership with SIPA, what has been, in your opinion, the main innovation?
"The meeting with SIPA has been fundamental for us, especially because now we have a production line in which costs have been enormously reduced compared to the past. The most significant innovation for us has been the possibility, a long sought-after goal, to become masters of the process, i.e. independent from what the supplier was able to offer us in terms of preforms and bottles".
Is SIPA a strategic partner also for the creation of new designs of containers or for the optimization of existing ones, e.g. reducing the weight of the bottle?
"We have developed a myriad of new shapes through additional services for new container developments and therefore for the purchasing of new molds. An important result, equivalent to more than 15 new formats developed. The latest bottles, introduced with the new line of rotary blow molding machines, have a lighter design compared to the pre-existing ones. What we appreciated greatly was that in the development of the new shapes, that takes place in SIPA, we are managing to make great savings in terms of time. We have become more streamlined in terms of approval times for the new containers, usually very long. Interfacing with the Latin-Central American Division of Coca Cola, SIPA obtains the approval of the new container directly.
Now with the new developments of hot fill bottles for juices, Powerade and Nestea, SIPA's support is helping us gain deeper knowledge of this sector. We have just returned from China, where we visited the production plants that operate with Hot Fill technology installed by SIPA in its customers's factories. When all is said and done, it is of vital importance to fully understand the advantages that can be derived from the use of certain technologies".
How much importance to you give to the capability of a supplier to provide a high level of technical support both during the installation phase and after the sale?
"The utmost importance. In the case of our partnership with SIPA, I can say that the question of support has been a crucial issue. EBC had never invested such huge sums in machinery. So having complete faith in SIPA as a supplier was of the essence. Also because SIPA has only just opened a new branch office in Colombia, founded for the express purpose of providing support for the projects undertaken with EBC, both in terms of commercial support, and in terms of after-sales support and spare parts service. We sincerely hope to be able to manage all our future projects in the same way".
What prospects are offered by the beverage market in Ecuador?
"We have a somewhat complicated country, particularly from the economic point of view. Nonetheless the beverage market is showing positive growth. EBC has consolidated its position as leader and with this advantage we can certainly aspire to growth both on our traditional market, the CSD sector, in which we are extremely strong, and in that focusing on new types of beverages such as juices, tea and sports drinks".