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Petro
Chemical
Consultingg
Alliance
The Five Regions of Latin AmericaThe Five Regions of Latin America
by
J O Bühl Vid lJo...
Polyolefins Consulting, LLCy g,
member of the Petrochemical Consulting Alliance
 Provides market, product and process tec...
P t Ch i l C lti Alli
Petro
Chemical
Consulting
 Provides consulting products and services to clients in the
PetroChemica...
F ti l d hi l
Petro
Chemical
Consulting
Functional and geographical coverage
 Highly experienced consultants
located thro...
O tliOutline
 Similarities that unite
– Languages
– Economic weight
– Sustainabilityy
 The five regions
– Competing trad...
L f th W ldLanguages of the World
Source: Languages world map - Eric Gaba
Note: Blue – Spanish, Portuguese and other roman...
Economic Weight of Languages with More
Th 100 Milli S kThan 100 Million Speakers
Source: Ethnologue (2013) and World Devel...
Th M t B l d R i f th W ldThe Most Balanced Region of the World
Index uses global data on life expectancy, experienced wel...
Countries and Economies
G D ti P d t 2013 C t US$Gross Domestic Product 2013 - Current US$
Rank Economy GDP
Milli
Rank Eco...
G i M ltil ti i P t h i lGrowing Multilatinas in Petrochemicals
 Alpek – Mexico
– Second largest producer of PET in the A...
Not Such a Thing as a Latin American
M k t
MEXICO
CENTRAL AMERICA & CARIBBEAN
Market
CENTRAL AMERICA & CARIBBEAN
(Guatemal...
Mercosur and Pacific Alliance Trade Blocs
E i P f F Diff t A hEconomic Performance From Different Approaches
 Mercosur – ...
U i P l l fi P d tUnique Polyolefin Products
 Consumer Products
– Flexible packaging for fruit export – grapes and papaya...
I d t i l P d t M t i l H dliIndustrial Products – Materials Handling
rnational,,
dadAutónoma
Latin America and most of wo...
I d t i l P d t O tdIndustrial Products - Outdoor
desa,
Consultants
Geomembrane for mining - Chile and Peru
urce:BraskemId...
M i H h ld d CMexico – Household and Consumer
Source: Rotoplas
Source: aba
A liti l d ti i b l t i 150 kt f
PO 2015 Februa...
D i P d tDairy Products
rnational,
Consultantsl
U.S. Colombia, Ecuador,
Peru Argentina Brazil
Colombia,
Argentina and
urce...
C P d tConsumer Products
rnationaland
Water - Colombia, parts
of C America
urce:PlastoInte
skemIDESA
of C. America
Sou
Bra...
R t t bl Fl ibl P k iRetortable Flexible Packaging
 A flexible package in which
prepared food is hermetically
sealed for ...
F it P k iFruit Packaging
 Sliced papaya in stand upp p y p
pouch
 Provides
mLatAm
Provides
– Excellent gas barrier
– Tr...
Chil GChilean Grapes
 First quarter of the year in the
U S E t C t
 Well protected, all grains
ld d d li iU.S. East Coas...
YPFB – Bolivia Olefins and Polyolefins
C lComplex
Capacity Start Up Investment
Location
Capacity
[kt/yr]
Product Contracto...
M i S l d D d PE d PPMexico Supply and Demand – PE and PP
PolypropylenePolyethylene
 Opportunity for additional
capacity
...
Ethylene XXI by Braskem IDESA JV
L di N th A i E i WLeading North American Expansion Wave
 Coatzacoalcos, VC, Mexico
– 1,...
S f PE d PP S lSources of PE and PP Supply
 A highly dynamic situation but in general sources areg y y g
– Mexico: U.S.
–...
Lik l F t S liLikely Future Suppliers
 Still a highly dynamic situation, but importers for each areag y y p
will be
– Méx...
S P d E d U NSome Processor and End User News
 Borealis Brasil – Expands PP compounding – € 45 million
 Brazil's Cutrale...
O t itiOpportunities
 Critical elements for success
T ki d t f th ti f t– Taking advantage of the connecting factors
• La...
PO 2015 February 22 - 25, 2015
Polyolefins Consulting, L.L.C.
www.polyolefinsconsulting.com
C t t
Petro
Chemical
Consulting
Contact
g
Alliance
Jorge O. Bühler Vidal
Polyolefins Consulting, L.L.C.
22 Hidden Lake Dr....
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The Five Regions of Latin America

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Latin America is a region representing the largest land mass joined by two major common languages. As a region its more than 600 million inhabitants represent the world’s fourth largest economy. Its 20 countries, which are far from being a single, monolithic market, can be grouped in five polyolefin commercial regions.

Geography, logistics, development and trading partners define the five regions: Mexico, Central America and Caribbean, Northern South America, Brazil and Southern Cone. While polyolefins polymerization and processing technologies are global, processors offer end products that in many cases are uniquely local.

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The Five Regions of Latin America

  1. 1. Petro Chemical Consultingg Alliance The Five Regions of Latin AmericaThe Five Regions of Latin America by J O Bühl Vid lJorge O. Bühler-Vidal SPE Polyolefins 2015 Conference Houston, TX February 22 - 25 2015February 22 25, 2015 North Brunswick Los Angeles México D F Bogotá São Paulo Buenos Aires Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.comPO 2015 February 22 – 25, 2015 North Brunswick – Los Angeles – México D.F. – Bogotá – São Paulo – Buenos Aires Bahía Blanca – Mendoza – Santiago – Porto Alegre – Guatemala – Charleston – Houston – New York
  2. 2. Polyolefins Consulting, LLCy g, member of the Petrochemical Consulting Alliance  Provides market, product and process technology selection consulting to the global polyolefins industry, from producers to extruders, converters and transformers  Clients are olefins and polyolefins producers; technology licensors; equipment and additive suppliers; polyethylene and polypropylene extruders, transformers and converters; end users; construction companies; investment banks;users; construction companies; investment banks; international organizations; and professional and trade associations  Highly experienced consultants located throughout the Americas and the world  Functional and geographic coverage of polyolefins and sectors PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Functional and geographic coverage of polyolefins and sectors of the petrochemical industry
  3. 3. P t Ch i l C lti Alli Petro Chemical Consulting  Provides consulting products and services to clients in the PetroChemical Consulting Alliance g Alliance worldwide petrochemical and plastics industries, combining local insights with a global perspective  Members – Dr. Alfredo Friedlander, Buenos Aires, Argentina – INovatius ICS, São Paulo, Brazil – Meem Consulting, Costa Mesa, CA, USA – Multidynamics Ltda., Bogotá, Colombiay , g , – Polyolefins Consulting, LLC, North Brunswick, NJ, USA – Unisouth SRL, Buenos Aires, Argentina Th b d t t k f t h i l lt t i th PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  The broadest network of petrochemical consultants in the American continent
  4. 4. F ti l d hi l Petro Chemical Consulting Functional and geographical coverage  Highly experienced consultants located throughout the Americas A ti  Professionals specialized in: – Project planning g Alliance – Argentina • Buenos Aires, Bahia Blanca, Mendoza – Brasil – Product development and applications – Development and selection of production technology • São Paulo, Porto Alegre – Chile • Santiago Peru production technology – Operations – Logistics – Commercialization, marketing– Peru • Lima – Colombia • Bogotá , g and sales – Technology and technical service for processors – Guatemala • Guatemala – Mexico • Mexico D F  Relationships with related and complementary consulting firms• Mexico, D.F. – U.S.A. • Los Angeles, Houston, Charleston, New York C i l l fi d th t h i l i d t PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Covering polyolefins and the petrochemical industry functionally and geographically
  5. 5. O tliOutline  Similarities that unite – Languages – Economic weight – Sustainabilityy  The five regions – Competing trade blocksCompeting trade blocks – Unique polyolefin applications – Project update PE and PP imports– PE and PP imports – Processors and end users O t iti Opportunities Many similarities and many differences PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Many similarities and many differences
  6. 6. L f th W ldLanguages of the World Source: Languages world map - Eric Gaba Note: Blue – Spanish, Portuguese and other romance languages Largest land mass joined by two major common PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Largest land mass joined by two major common languages
  7. 7. Economic Weight of Languages with More Th 100 Milli S kThan 100 Million Speakers Source: Ethnologue (2013) and World Development Indicators 2013, World Bank Two major common languages unite Latin America PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Two major common languages unite Latin America
  8. 8. Th M t B l d R i f th W ldThe Most Balanced Region of the World Index uses global data on life expectancy, experienced well-being and Ecological Footprint to calculate HPI Source: HPI - Happy Planet Index (2012) The region heading to sustainable well living with PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  The region heading to sustainable well living with relatively low ecological footprint
  9. 9. Countries and Economies G D ti P d t 2013 C t US$Gross Domestic Product 2013 - Current US$ Rank Economy GDP Milli Rank Economy GDP MilliMillions US$ Millions US$ World 75,592,941 7 Brazil 2,245,673 European Union 17,958,073 8 Italy 2,149,485 1 United States 16,768,100 9 Russia 2,096,777 2 China 9 240 270 10 India 1 876 7972 China 9,240,270 10 India 1,876,797 Latin America & Caribbean 5,657,372 11 Canada 1,826,769 3 Japan 4 919 563 12 Australia 1 560 3723 Japan 4,919,563 12 Australia 1,560,372 4 Germany 3,730,261 13 Spain 1,393,040 5 France 2,806,428 14 South Korea 1,304,554 6 United Kingdom 2,678,455 15 Mexico 1,260,915 The Latin America & Caribbean region is the fourth Source: World Bank World Development Indicators Dec. 2014 PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  The Latin America & Caribbean region is the fourth largest economy
  10. 10. G i M ltil ti i P t h i lGrowing Multilatinas in Petrochemicals  Alpek – Mexico – Second largest producer of PET in the Americas, only PP producer in Mexico – Recently added the PTA and PET business of Eastman Chemical to its U.S. operations – Operates facilities in 20 sites in the U.S., Mexico and Argentina  Mexichem – Mexico – Produces vinyl chloride monomer (VCM); PVC in Mexico and Colombia; compounds in Mexico, Colombia and U.S.; and PVC pipe throughout region B k B il Braskem – Brazil – Leader in the thermoplastic resins segment in the Americas, 8th largest resin producer in the world, largest petrochemical company in Latin Americacompany in Latin America – PE, PP and PVC producer in Brazil, U.S. and Germany L ti A i t h i l i l b l PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Latin American petrochemical companies are global competitors
  11. 11. Not Such a Thing as a Latin American M k t MEXICO CENTRAL AMERICA & CARIBBEAN Market CENTRAL AMERICA & CARIBBEAN (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, etc.) NORTHERN SOUTH AMERICA (Venezuela, Colombia, Ecuador & Peru) BRAZIL SOUTHERN CONE (Argentina, Chile, Uruguay, Paraguay & Bolivia)Source: Unisouth PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  There are many markets in Latin America
  12. 12. Mercosur and Pacific Alliance Trade Blocs E i P f F Diff t A hEconomic Performance From Different Approaches  Mercosur – Argentina, Brazil, P U d V l Gross Domestic Product – Paraguay, Uruguay and Venezuela  Combined purchasing power parity GDP over US$ 3.4 trillion a year  Fifth largest economy in the world Gross Domestic Product – Latin America and Trade Blocs [Percent Year on Year Variation]  Fifth largest economy in the world  Pacific Alliance – Chile, Colombia, Mexico and PeruMexico and Peru  Combined purchasing power parity GDP over US$ 3.1 trillion a year  Sixth largest economy in the worldSixth largest economy in the world  Member nations share several decades of positive growth, stable macroeconomic foundations, Source: BBVA Research, stable governance and openness to global integration Many Latin American countries in virtuous circle others PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Many Latin American countries in virtuous circle, others perceived as more turbulent
  13. 13. U i P l l fi P d tUnique Polyolefin Products  Consumer Products – Flexible packaging for fruit export – grapes and papaya – Chile later Peru – Bags with colorful stripes – Central America and Andean countries – Water bags – Central America and Colombia  Industrial Products – Banana bags – Central America, Colombia and Ecuador – Silo bags – Argentinag g – Rotomolded water tanks – Initiated in Mexico, now in Argentina – Large diameter PE-100 pipe – Initially demanded in Chile – Hot water PP pipe – ArgentinaHot water PP pipe Argentina – PE flower packaging – Ecuador While many products are globally uniform many are PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  While many products are globally uniform, many are uniquely local
  14. 14. I d t i l P d t M t i l H dliIndustrial Products – Materials Handling rnational,, dadAutónoma Latin America and most of world urce:PlastoInte biernodelaCiud BuenosAires ChileLatin America and most of world Sou Gob deB Chile Argentina Local solutions for common problems PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Local solutions for common problems
  15. 15. I d t i l P d t O tdIndustrial Products - Outdoor desa, Consultants Geomembrane for mining - Chile and Peru urce:BraskemId stiChemLatAm g Sou Plas Silo bags - Argentina and exports Large solutions for critical applications PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Large solutions for critical applications
  16. 16. M i H h ld d CMexico – Household and Consumer Source: Rotoplas Source: aba A liti l d ti i b l t i 150 kt f PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  As more political advertising becomes electronic, 150 kt of plastic will be reduced
  17. 17. D i P d tDairy Products rnational, Consultantsl U.S. Colombia, Ecuador, Peru Argentina Brazil Colombia, Argentina and urce:PlastoInte stiChemLatAm Peru, Argentina, Brazil, parts of C. America Argentina and others Sou Plas Colombia MexicoBrazil Dairy products are consumed in many different ways PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Dairy products are consumed in many different ways
  18. 18. C P d tConsumer Products rnationaland Water - Colombia, parts of C America urce:PlastoInte skemIDESA of C. America Sou Bras Mexico Unusual? Colorful? PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Unusual? Colorful?
  19. 19. R t t bl Fl ibl P k iRetortable Flexible Packaging  A flexible package in which prepared food is hermetically sealed for long-term unrefrigerated storage mLatAm  Already big in Asia and Europe poised to penetrate U S markets still dominated urce:PlastiChem nsultants U.S. markets still dominated by metal cans and glass bottles Sou Con  Booming specially in Central America, Ecuador and Mexico El Salvador Packaging innovations sometimes flow in unexpected PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Packaging innovations sometimes flow in unexpected ways
  20. 20. F it P k iFruit Packaging  Sliced papaya in stand upp p y p pouch  Provides mLatAm Provides – Excellent gas barrier – Transparency urce:PlastiChem nsultants – Resealable Sou Con A ready to eat treat! PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  A ready to eat treat!
  21. 21. Chil GChilean Grapes  First quarter of the year in the U S E t C t  Well protected, all grains ld d d li iU.S. East Coast – Chilean grapes, deliciously perfect, start showing in the market are sold and are delicious  Result of synergy between growers plastic processors  Quality superior to California or Mexico grapes at end of northern hemisphere summer growers, plastic processors, transportation, supermarkets and consumers northern hemisphere summer  Each year brings an advance Initially loose bunches in– Initially loose bunches in cardboard box – Later strong, clear, ventilated PE bags with zipper – Now carefully printed PP bags  Chile Peru Colombia and Mexico partnering to sell grapes PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Chile, Peru, Colombia and Mexico partnering to sell grapes to China year round
  22. 22. YPFB – Bolivia Olefins and Polyolefins C lComplex Capacity Start Up Investment Location Capacity [kt/yr] Product Contractor Start Up [year] Investment [US$ million] 2 247 t/d LPG Liquids separation plant Yacuiba, Tarija, Gran Chaco 2,247 t/d 1,658 bpd 3,144 t/d 1,044 bpd LPG Gasoline Ethane Iso-pentane Técnicas Reunidas 1H 2015 680 Olefins and polyolefins complex Santa Cruz ~1,000 200 200 Ethylene LDPE LLDPE Tecnimont (conceptual engineering) 2022 3,000 complex 350 HDPE engineering) Olefins and polyolefins Tarija, Gran Ch ~400 Propylene Tecnimont (conceptual 2018 1,800polyolefins complex Chaco 350 PP (conceptual engineering) 2018 1,800 Ethane available while olefin and polyolefins locations PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Ethane available while olefin and polyolefins locations still being determined
  23. 23. M i S l d D d PE d PPMexico Supply and Demand – PE and PP PolypropylenePolyethylene  Opportunity for additional capacity  Time to start planning even more capacity p y  C3 expansion under study more capacity  Importers will not give up on this market  Additional local supply will The large supply deficit provided an obvious incentive Additional local supply will bump demand PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  The large supply deficit provided an obvious incentive for additional PE capacity
  24. 24. Ethylene XXI by Braskem IDESA JV L di N th A i E i WLeading North American Expansion Wave  Coatzacoalcos, VC, Mexico – 1,050 kt/yr cracker – Technip – 400 kt/yr HDPE – Ineos Innovene S – 350 kt/yr HDPE – Ineos Innovene S – 300 kt/yr LDPE/EVA – urce:Braskem Lyondell Basell Lupotech T  ~ US$ 4.5 billion investment Sou  Pre marketing portfolio of 320 clients Construction reached 88% completion by end of 2014 PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Construction reached 88% completion by end of 2014, commissioning planned by end of 2015
  25. 25. S f PE d PP S lSources of PE and PP Supply  A highly dynamic situation but in general sources areg y y g – Mexico: U.S. – Central America & Caribbean: U.S., Korea – South America (Pacific Coast): U.S., Korea, Argentina, Brazil – Southern Mercosur: Argentina, Brazil, Korea, China, Middle East PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Geography and logistics matter
  26. 26. Lik l F t S liLikely Future Suppliers  Still a highly dynamic situation, but importers for each areag y y p will be – México: U SMéxico: U.S. – Central America and Caribbean: Mexico and U.S. – South America Pacific Coast: U.S., Argentina, Brasil, later Per and Boli iaPeru and Bolivia – Southern Mercosur: Argentina, Brasil and later Bolivia  Imports from East Asia will be displaced by U.S. imports  Local producers will have regional competitors PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Geography and logistics still matter
  27. 27. S P d E d U NSome Processor and End User News  Borealis Brasil – Expands PP compounding – € 45 million  Brazil's Cutrale and Safra acquire Chiquita Brands – US$ 1.3 billion  MAUSER and SAI launch Intermediate Bulk Container venture in Monterrey, Mexico  Cardia Bioplastics sets up film and bag production in Sao Paulo  Tetra Pak completes € 65 million upgrade in Ponta Grossa, B ilBrazil  EBIH building HDPE pipe, fittings, agricultural film and geomembranes facility in El Alto, Bolivia  ADS and Tigre double HDPE pipe capacity in Maceio, Brazil P i it d ti i t dil PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Processing capacity and consumption growing steadily
  28. 28. O t itiOpportunities  Critical elements for success T ki d t f th ti f t– Taking advantage of the connecting factors • Languages • Trade agreements • LogisticsLogistics – Tailoring products – resins and processed products • Local traditions • Local circumstances L l li ti• Local applications  Recognize that business practices are not uniform – Even within a country!Even within a country!  Acknowledgements – Information and many photos from Braskem IDESA, Grupoy p p Texne, Mondelez, PlastiChem LatAm Consultants, Plasto International, Unisouth and IPA Polyolefins course students M b i t iti th h t th l h i PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com  Many business opportunities throughout the value chain
  29. 29. PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com
  30. 30. C t t Petro Chemical Consulting Contact g Alliance Jorge O. Bühler Vidal Polyolefins Consulting, L.L.C. 22 Hidden Lake Dr. No Brunswick NJ 08902No. Brunswick, NJ 08902 U.S.A. Telephone: 1 (732) 951 8710Telephone: 1 (732) 951-8710 e-mail: buhlerjo@polyolefinsconsulting.com PO 2015 February 22 - 25, 2015 Polyolefins Consulting, L.L.C. www.polyolefinsconsulting.com

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