South America | markets feature
Ami recently published its first guide to compounding companies in South America. in this exclusive
extract from the guide’s introduction, we analyse the growth of the industry in the region
compound growth in South America
South American thermoplastic compounds production grew by an average of 4.6% per year during the period 2001-10, reaching just over 1.2 million tonnes. This growth reflects the strong economic growth of the region during this period and the growing supply and demand for polymers from key end-use markets such as the automotive, consumer goods and construction sectors. compounding production growth in the region did
however decelerate in 2009 as a result of a slowdown in economic activity caused by the global economic downturn. Activity recovered sharply in 2010 as regional economies started to grow at a faster pace. The prospects for growth of the South American thermo- plastic compounding market over the next five years are bright. The main growth drivers will be the continued expansion of regional economies, rising per capita incomes and further investment in infrastructure and petrochemical/polymer production. South American economies are exiting the global crisis at a faster pace than anticipated. This reflects solid government policy support, favourable external financing conditions, and strong commodity revenues. gDp growth in the region averaged 5.9% in 2010 and is projected at 4.5% in 2011 and 4.0% in 2012. prospects within the South American region are
quite diverse given the varying strength of economic conditions between countries, different government
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policy frameworks and varying degrees of exposure to global trade and financial markets. A robust recovery is taking place in Brazil, chile, colombia, peru and uruguay. Similarly, Argentina and paraguay are set to experience high growth, supported in large part by strong trade ties with Brazil. Ecuador and Venezuela, on the other hand, are expected to show a rather slower recovery.
Thermoplastic compounding demand in South
America will also be supported by a series of new polyolefin projects that are planned in the region. However, financing problems and concerns about weak demand resulting from the economic crisis are causing some delays to these major upstream projects. more than 5 million tonnes/year of pE and 3 million tonnes/ year of pp capacity have been announced in South America, with Brazilian companies Braskem and petrobras the prime movers behind most of the proposed investments. Brazil, as the largest economy in South America, is also the largest national market for thermoplastics and thermoplastics compounds. Brazil accounts for more than half of the 136 compounds and masterbatch production sites listed by Ami in its regional guide. Argentina is the next most important compound and masterbatch producer in the region, followed by columbia and Venezuela.
December 2011 | compounDing worlD 15
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