Dinavet, a leading distributor of veterinary products and pet food with 60 years of industry experience, is set to open a new production plant in Guanajuato, central Mexico. The new facility aims to strengthen the company’s presence in the local pet food market.
While the specific capacity of the plant has not been disclosed, it is anticipated to adhere to local standards with a projected annual capacity of approximately 60,000 metric tons. However, due to current market conditions and intense competition, it is expected that the plant will initially operate at minimum levels.
New facilities require a few years to show ROI
Dinavet faces two key challenges with the establishment of the new plant. First will be positioning its existing pet food brands, currently sold through its own veterinary pharmacies and similar outlets, in the mainstream market. (The current portfolio includes Dinapet, Dinapuppy, Dinacat, Dinadog and Dinacan.) This requires leveraging the company’s expertise in the veterinary channel to create new and appealing products that resonate with consumers. By capitalizing on its current brand portfolio, Dinavet aims to expand its reach nationwide.
Additionally, Dinavet will need to attract new clients seeking third-party manufacturing services, a crucial step to ensure long-term profitability and optimize return on investment (ROI).
Although the plant will likely initially operate at lower capacity levels, industry projections suggest that, given the current market conditions, it has the potential to reach around three-quarters of its maximum capacity within a timeframe of five to eight years. To achieve this, Dinavet will need to navigate the competitive landscape and actively seek new clients to fill production quotas.
Seizing opportunities amid fierce competition
While the pet food industry in Mexico faces intense competition, it is important to recognize the promising business opportunities that lie ahead. The continuous growth of consumer demand for pet food products creates room for innovative offerings. Moreover, with the strategic location of Dinavet’s new production plant in Guanajuato, there is easy access to both domestic and international markets, providing a gateway for expansion.
Despite the obstacles, businesses in the Mexican pet food industry have the potential to thrive by leveraging their strengths, exploring new markets and staying responsive to evolving consumer needs.
