Venezuela struggles with plastics shortage

21 February 2008 20:12  [Source: ICIS news]

CARACAS (ICIS news) -- High (HDPE) and low density polyethylene (LDPE) are in short supply in Venezuela because state supplier Petroquimica de Venezuela (Pequiven) has run short of imported inventories, an industry source said on Thursday.

Attempts to substitute with other grades have so far been unsuccessful.

"HDPE is a very big issue," said Carlos Celis, president of the local plastics association, AVIPLA.

"They [Pequiven] have been trying to supply the industry with other grades as substitutes with little success," he said in an e-mail message.

Imported stocks of LDPE have also disappeared, and Pequiven is unable to make enough to meet local demand, he said.

Polypropylene (PP) for blown material is also running short, prompting concerns about a possible shortage. Pequiven has tried to replace it with pipe-grade PP, but not many factories have been able to use it, Celis said.

Polyvinyl chloride (PVC) and linear low density polyethylene (LLDPE) supplies are stable.

"LLDPE is not yet a concern since the capacity of the plant is larger than local demand," Celis said.

In the midst of an economic boom, Venezuelan transformers are unable to satisfy local demand because aging equipment and insufficient production capacity have left Pequiven unable to meet demand for plastic resins.

Additionally, currency and exchange controls as well as high duties on imports have made it prohibitive for most transformers to make capital investments and buy their own resins abroad.

AVIPLA recently published an open letter in a national daily, warning that some plastic transformers were within weeks of shuttering their operations due to the lack of resins.

While praising Venezuela's commitment to expand its petrochemical industry, the trade association called on the government to ease its import restrictions until Pequiven can produce more resins.

"AVIPLA is pressing to obtain from the government a total elimination of import duties and IVA (on imports of all plastic resins) for a period of at least two years," Celis said in the e-mail.

The state recently announced in its Official Gazette that it would allow some imports of plastic resins in specific cases, but Celis said that the move was made without consulting the industry and falls far short of its needs.

For more on PE visit ICIS chemical intelligence

By: Jasmina Kelemen
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