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After year of racking up solid sales, dollar concerns U.S. equipment exporters.

After Year of Racking Up Solid Sales, Dollar Concerns U.S. Equipment Exporters

Currency's further rise could price American food processing and packaging machinery out of the market. No small business, sales in 1988 surpassed $700 million mark.

What goes up must come down, and right now there are a lot of North American exporters hoping that the dollar retreats against other hard currencies. Otherwise, some fear, sales which rose in recent years could head south.

In recent months overall industrial overseas orders have been hurt by the strength of the dollar, which at its peak level had risen more than 13% since the beginning of this year. That's some change from 1988 when the battered buck was bullish for foreign sales of U.S.-manufactured food processing and packaging machinery, which respectively rose 23% and 36%.

Food processing equipment exports from the States topped $509 million, compared to $413 million in 1987, according to the Commerce Department. The most active markets were Canada, Mexico, the U.K. and Japan, which accounted for some $186 million in volume.

Foreign purchases of food packaging machinery was worth $395-million compared to $289-million the previous year. The best customers were in Canada, the U.K., Japan and Mexico, who combined to represent a market worth $172.5 million.

One company that has made the most of competitive opportunities afforded by the devaluated green-back is I.J. White Corp. The Farmingdale, New York-based manufacturer of low-tension aluminum and plastic spiral conveyor systems has seen exports rise from virtually zero five years ago to between 30% and 40% of annual production.

"There's no question that the low dollar helped us compete in foreign markets," said Peter J. White, vice president. "But now that we've established ourselves abroad there's no reason to believe that business won't continue despite currency fluctuations."

The company builds some 40 to 45 custom-made blast freezer spirals and refrigerated coolers annually, with 70% of output going to repeat customers. Its main non-U.S. markets are in Mexico (almost 20 systems have been installed there, many for cooling baked goods) and Europe (where clients range from frozen pizza packers in the U.K. to poultry processors in Spain and France).

The multi-tiered units are designed for continuous blast freezing at temperatures as low as --50[degrees]F. They can handle a great variety of products at volumes from 1,000 to 20,000 pounds per hour. "A spiral doesn't know what's on it," remarked White. "It makes no difference if it's meatballs, ice cream, TV dinners or breaded mushrooms."

Quick Frozen Foods International recently toured the I.J. White factory, which is about a one-hour commute from New York City. The magazine's visit came shortly after a delegation from the Soviet Union inspected the manufacturing facilities. "Although I don't have any orders yet, the U.S.S.R. offers a tremendous market," said White. "I'll be going over there to continue the dialogue."

What the Russians saw in Farmingdale was computer-assisted design and construction by number. The space-saving spirals (no part is too large to move through a normal size door) can accommodate belt widths form 8" to 54". Freezing systems featuring dual 45[degrees] down blast coil air flows are built and disassembled for shipment. The company's largest unit can reportedly be installed in several days by a team of two or three workers.

White is also looking to Asia for new business. It has joined forces with Bally Engineered Structures to manufacture and market blast freezing systems for customers in the Far East. The designs are housed in high efficiency, camlock-paneled Bally modules that are insulated with four to six inches of foamed-in-place urethane.

Meanwhile, White and other U.S. equipment producers are keeping a close eye on the dollar as a further rise could make exports too expensive for foreign buyers. Second quarter figures showed a 2.3% erosion of the U.S. trade deficit to $27.7 billion as record exports acted to counter a big jump in capital outflows for oil. However, many economists are concerned that the rapid growth in exports, which provided much of the momentum for overall economic activity in 1988, has already begun to slow down.

PHOTO : I.J. White specializes in building spiral blast freezers. Last year the company exported

PHOTO : close to 40% of its production.
COPYRIGHT 1989 E.W. Williams Publications, Inc.
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Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Frozen Foods in North America
Publication:Quick Frozen Foods International
Date:Oct 1, 1989
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