Fernando Flores F.

54, president, the Glassware Unit of Vitro, 1999-present; international vice-president (glass containers), 1998-1999; operations vice-president, 1992-1998; exports vice-president, 1990-1992; vice-president, refrigerator operations (household products, now Acros Whirlpool), 1988-1990; vice-president, stove operations, 1986-1988; general manager (Enbosa), 1982-1986; various industrial engineering, human resources and planning positions (Vidriera Monterrey), 1974-1982. Master's, advanced management, University of Texas, 1979; bachelor's, industrial engineering, 1970, Instituto Tecnológico y de Estudios Superiores de Monterrey (ITESM)

2000 Results

In 2000 Glassware’s sales volume grew 7%. The unit accounted for 8% and 12% of Vitro’s consolidated revenue and EBITDA, respectively. Net sales rose to US$234 million, a 15% rise in dollar terms and a 6% gain in constant pesos. Approximately 64% of these sales were domestic and 36% exports.

EBITDA amounted to US$65 million, a 9% rise in dollars and a slight 0.4% drop in constant pesos. The unit’s cost and expense reduction initiatives compensated for increased natural gas and packaging materials’ prices. Glassware continues to explore opportunities to reduce SG&A (sales, general and administrative) expenses to offset natural gas and packaging prices.

Exports were US$85 million, a 15% increase over 1999. Export sales to the United States offset decreased sales to other export markets that resulted from the strong peso.

 


“María Elana appreciates Vitro’s wide range of quality glassware products”


Review

Vitro’s Glassware unit focuses on the consumer, food service and industrial markets with a diversified base of customers. Glassware is capable of producing a full range of products to satisfy its customers’ needs, including drink ware, dinnerware, bake ware, flatware, tableware, decorative home furnishings, coffee carafes and microwave safe plates.

Libbey Inc., the unit’s joint venture partner, distributes Crisa brand glassware in the United States and Canada. Vitrocrisa, in turn, distributes Libbey brand products in Mexico, Central and South America. Other important value drivers include the growing purchasing power of Mexican consumers, and the unit’s ability to leverage its leading domestic position to offer a broad range of complementary products and services, such as the “Crisa Collection” of consumer china and ceramics and borosilicate glass products for heat sensitive industrial applications.

Business Outlook

The outlook for 2001 is relatively promising. The domestic glassware market should grow in line with the Mexican economy, subject to expected exchange rate pressures. Better productivity and fixed cost absorption from increased capacity utilization should offset the exchange rate’s effect on exports. Glassware should increase its domestic market share through improved customer service and an expanded product portfolio that capitalizes on Vitrocrisa’s extensive distribution network. Export sales to the United States and Canada should show continued growth due in part to an expected increase in sales to Libbey and the continued sales growth of Crisa-branded products.

Consumer
Building on its leading domestic position, Glassware is expanding its retail distribution channels to include major furniture chains and convenience stores. To meet consumer demand, the unit is rounding out its retail offerings to include the “Crisa Collection” of ceramics and china, and wedding packages of glass, oven and dinnerware.

The unit initially expects to import many of these new products, such as ceramics and china, from outside manufacturers and market them domestically under its popular Crisa brand. Vitrocrisa also manufactures a broad range of customized products, such as hand made glass and specialty lines of thermal and flatware products.

Commercial
In 2000 the unit launched successful premium programs in conjunction with the summer Olympics. These successful programs more than offset lower millennium-related sales.

Industrial
Glassware is growing its industrial business through rising exports and heat resistant borosilicate products. Specific products include new lightweight transparent lids that offer greater clarity to ensure better cooking. These products and service offerings underscore the unit’s ongoing commitment to quality customer service and satisfaction.