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OPPORTUNITIES STILL ABOUND FOR POLYMERS IN SOUTH AND CENTRAL AMERICA

South and Central America has long been regarded as a region of considerable potential for strong growth in polymer demand. However, in reality this growth has been erratic with the development of the plastics processing industry often undermined by the economic fragility and political instability of many countries in the region. Such uncertainty derives from the high debt burden of many countries, a dependency on globally-traded commodities making it vulnerable to external economic shocks, burdensome import tariffs and regulations, high energy costs and infrastructure bottles necks.

However, despite these challenges the plastics industry in the region can continue to be positive about the contribution it makes to the development of local communities and there are notable opportunities in a number of countries where the pace of growth is accelerating on the back of economic expansion, foreign investment and rising incomes.

The winners and losers in terms of the development of polymer demand in South and Central America are detailed in the latest report in AMI Consulting's global polymer demand series. Polymer demand in South and Central America, which has just been published, details the size, nature and future prospects for both commodity and engineering plastics.  The region represents a varied market of more than 20 countries which have quite differing prospects for polymer demand. It has a large and youthful population of nearly 500 million people, already highly concentrated in urban areas. Growth is not only fuelled by its natural resources, minerals and commodities, but also by its increasing consumer markets giving rise to a growing demand for a wide range of products requiring plastics.  There continues to be significant investment in plastics processing operations aimed at replacing imported products, driving strong growth in polymer demand for some applications and markets. 

True the region is currently experiencing particularly weak economic growth. The economic output of South and Central America is largely determined by the larger nations of Brazil, Argentina and Venezuela all of which have been experiencing weak economic fundamentals in 2014 and 2015. For 2015 the region is expected to have its worse economic performance since the global financial crisis of 2009. The general consensus is that the region"s economy will expand by less than 1% for 2015, with a more robust economic performance expected for 2016 of around 2% GDP growth.

Demand for polymer in South and Central America recorded a drop of nearly 2% compared with 2013 and the market is expected to continue flagging in 2015 with AMI anticipating a further drop in polymer consumption of up to 3%. The weak state of the market is largely because of declining demand in Argentina, Brazil and Venezuela, which together account for almost 70% of total polymer consumption in the region.

However, if one excludes these countries then polymer consumption is growing at a rate of about 5%/year, albeit on much smaller volumes.  Colombia continues to be the most stable market in the region while Peru and Chile have been identified as two of the fastest growing markets among the six largest countries. The markets of Central America are also proving to be particularly robust driven by growing investment in manufacturing aimed at servicing both North and South American markets.

In addition to detailing demand by polymer AMI's report also assesses the end uses applications for polymer by process (extrusion, moulding, etc) and by major market (packaging, building, automotive, etc).  AMI's analysis shows that polymer demand in South and Central America is characterised by a high volume of commodity resin usage which accounted for over 97% of all plastics processed in 2014. Almost three-quarters of all polymer processed in the region is accounted for by either packaging or building products. Injection moulding accounted for just over one-quarter of polymer demand but injection moulders account for two-thirds of processors.

Polymer Demand in South and Central America is an AMI consulting data report. It provides detailed statistical data on the demand and end uses for all major thermoplastic materials on a country by country basis. For further information please contact Cristina de Santos at: cds@amiplastics.com or fax to: +44 (0) 117 311 1534.