FocusArgentina auto industry boosts coatings

21 August 2008 22:12  [Source: ICIS news]

By Cristina Kroll

BUENOS AIRES (ICIS news)--Argentina’s rising automotive industry is benefiting local coatings businesses, a source said on Thursday.

“The upturn of the Argentinean automotive sector will surely have very positive effects for other companies of the value chain, such as coating manufacturers, and raw material providers for this industry”, said Hugo De Notta, president of the Sociedad Argentina de Tecnólogos en Recubrimientos (SATER,) a member of Coatings Societies International..

Other executives said they agree with his assessment.

Gustavo Illas, sales manager for South America - except Brazil - of Cristal Millennium, said that he foresees sustained growth for raw materials producers for the automotive paint industry due to the increase in car manufacturing in Argentina.

According to Argentina’s Automotive Manufacturers Association (ADEFA), the automotive industry plans to increase production by 120% during 2008-2013 and will reach 1.2m units/year.

BASF leads the Argentinean automotive coatings market, concentrating 80% of the market share, according to industry sources.

 “Having a manufacturing plant in the country, it’s an important element for BASF’s leadership, especially in an industry where the ‘just in time’ is essential”, an industry source said.

Another major player in the automotive paint sector is PPG Industries, which holds 10% of the market share. PPG leads the automobile repainting business, which, according to consulted analysts, demands between 300,000 and 400,000 litres of paint a month.

Other repainting companies operating in Argentina are Sherwin Williams, Tersuave, Sinteplast and Colorín.

In raw materials, DuPont and Cristal Millennium lead the titanium dioxide business.

Resins, solvents and additives manufacturers would also be benefit from the rising Argentina automotive industry, sources said.   

Although Brazil is the regional leader in the automotive business, Argentina is gaining ground, since several important car manufacturers have announced investments for $4bn, according to official statistics.

PSA - Peugeot and Citroen - started production this year of its new C4 model at its plant in Villa Bosch, in the Buenos Aires province. The company earmarked $230m (€156m) to expand this plant.

General Motors (GM) invested $200m in its plant of Rosario City, in the Santa Fe province, to manufacture a new compact car that will reach the market in 2010.

Ford invested $160m to develop two new models that will be available in 2011.

French company Renault is preparing to launch a new medium size car, manufactured in its plant in the Cordoba province. The launch required a capital outlay of $70m.

Germany’s Volkswagen announced a $300m investment in its General Pacheco factory in the Buenos Aires province to manufacture the firm’s first pick-up truck.

The expansion of the automotive business also caused new arrivals in the region. Cherry Automotive, for example, said it would invest $500m in a new manufacturing plant with a nameplate capacity for 150,000 units a year.

Also, Japan’s Honda announced an investment of $100m for a facility in the city of Campana, in the Buenos Aires province, with capacity for 30,000 units/year, which would be ready to start operations by the last trimester of 2009.

Finally, German company Mercedes Benz added $12m to its initial investment of $98m to expand its manufacturing facility in Virrey del Pino, Buenos Aires province.

BASF owns a production plant in the city of Tortuguitas, in the Buenos Aires province, from where it satisfies the demand for clients such as Ford, General Motors, Renault, and Mercedes Benz.

PPG Industries imports its products into Argentina from its manufacturing plants located in Brazil.

($1 = €0.68)

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By: Cristina Kroll
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