Venezuela converters concerned at slow pace of petchem projects

08 October 2009 22:22  [Source: ICIS news]

CARACAS (ICIS news)--Venezuela’s plastic converters are concerned about the slow pace of progress of the nation’s much-publicised plans to expand its petrochemical sector and called for greater support of their industry, the local plastics association said on Thursday.

“The transformer sector is worried by the slowness with which the projects for new plastic resin plants are advancing,” said Carlos Celis, president of the Venezuelan Plastic Industry Association (AVIPLA)

Celis made his remarks in Spanish in prepared remarks to a local industry gathering that were recently made public.

The global economic recession, among other factors, has caused many would-be investors in the industry to cut back or delay funding. Most notably, large-scale joint venture projects between state producer Pequiven and Brazil’s Braskem have been delayed.

Additionally, the government’s plans to vastly expand its petrochemical capacity do not do enough to support the local plastics industry.

“It seems to us extraordinary the idea of turning Venezuela into a petrochemical power, but we also want it to be a transformer powerhouse,” the group said.

According to AVIPLA, the government has rejected nearly two dozen investment proposals intended to support the private plastics manufacturing sector.

In the past, the government has expressed its intention to build a new plastics manufacturing chain that would be aligned with the state alongside its new chemical plants.

Chief among the plastic sector’s requests for support is the reinstatement of a policy that would guarantee Pequiven’s prices were among the most competitive in the region.

Local transformers have been saddled with some of the highest-priced resins in the region, which they say, combined with currency-exchange restrictions, severely undercuts their competitiveness.

Last year, amid a shortage of resins, Pequiven was forced to import supplies as oil prices approached $150/bbl.

Internal demand has dropped sharply due to the economic recession, leaving a surplus of high-priced product in inventory, estimated by some to be 6,000 tonnes.

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By: Jasmina Kelemen
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