15 November 1999 00:00 [Source: ICB]
Latin America must address its macro-economic problems if it is to attract investment and reduce its trade deficit in petrochemicals.
Speaking at the Latin American petrochemical meeting (Apla) in Margarita Island, Venezuela, Pedro Wongtschowski, managing director of Brazilian ethylene glycol producer Oxiteno, told delegates that all Latin American economies have a negative chemical trade balance and together account for only 2% of global chemical exports.
Latin America has a trade deficit with the US of $11bn or 57% of the total US chemical surplus, he added. Brazil's trade deficit in chemicals excluding pharmaceuticals, synthetic fibres and photographic materials totalled $5.1bn in 1998 while Mexico and Argentina have deficits of $4.3bn and $2.7bn respectively.
Jose Luis Zepeda, head of Mexico's polyols producer Polioles, which is part of Grupo Alpek, blamed Mexico's growing trade deficit in chemicals on the government's failure to privatise the industry over the last six to seven years. The government has since said it will not privatise the industry in the next two years, forcing the industry to look at ways of attracting much-needed private investment.
Zepeda told delegates that at the heart of Mexico's problems is the lack of a truly integrated petrochemical production.
Speakers from Argentina, Chile and Venezuela outlined new investments for the region. Chile is considering either a new naphtha-based cracker for Talcahuano or an ethane-based cracker in Magallanes in the south, together with associated downstream units. A new cracker is also being considered for San Lorenzo, Argentina. In Venezuela, Fertinitro, a venture between Koch (35%), Snamprogetti (20%), Empresas Polar (10%) and Pequiven (35%), has announced the construction of a second fertiliser complex, Fertinitro II, for startup in 2005 (see page 43).
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