Mexican Packager Buys Into U.S. Firm


Departing from the stereotypical pattern of cross-border trade, a Mexican lubricant company has entered a long-term agreement to acquire a U.S. packager and distributor to improve its prospects for sales in Mexico and other foreign markets.

Houston-based Cole Chemical Inc. announced recently that it has sold a 49 percent stake in its distribution operations, Cole Distribution Inc., to Vexa Group, of Monterrey, Mexico. The agreement calls for Vexa to acquire the rest of Cole Distribution over the next three years, a Cole official said.

More immediately, the cash infusion from Vexa will be used to install new packaging lines and storage tanks that quadruple capacity at Coles plant in Houston. Officials did not disclose the cost or size of the expansion, but said in a news release that it will position Cole to be a global player in the custom contract packaging market.

We see the partnership as a way to increase our visibility in the contract packaging industry and present Cole Distribution as a major player, said Donna F. Cole, chief operating officer of Cole Distribution.

Vexa, which was formed in 1927, is a contract packager of lubricants and greases and also provides lab analysis and transportation services. Cole Distribution, created in 1984, offers blending, packaging and warehousing services.

Americans are used to hearing about U.S. companies moving to or opening plants in Mexico to save money on wages.

Theyve determined that they can actually be more competitive meeting requirements for some of the products they sell in Mexico by manufacturing in the United States, Cole Sales and Marketing Manager Dave Luther said. The infrastructure is better here, plus raw materials cost less.

Luther said the expanded Cole plant will make products for sale not only in Mexico, but also for export to areas ranging from Canada to the Far East. Vexa President Antonio D. Gonzalez-Cortes claimed the Vexa-Cole partnership is the first contract packager of petroleum products with plants in Mexico, Central America and the United States, allowing it to offer consistent quality across those regions.

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