Brazil plastic industry group decries tariff hikes

06 September 2012 00:27  [Source: ICIS news]

CAMPINAS, Brazil (ICIS)--Plans to raise Brazil’s import taxes on a number of petrochemical products later this month are a “hard slap” to local plastic processors, the Brazilian Plastic Industry Association (Abiplast) said on Wednesday.

"All plastic products, including packages for food and for the basic food basket as well, medicines and civil construction will be impacted by the increase of the [tariffs] on resin imports, which will increase costs for plastic processors," it said.

Abiplast said the finished plastic goods sector was caught by surprise when the government announced it would increase the tariff for polyethylene (PE) resins, including low density polyethylene (LDPE), linear low density polyethylene (LLDPE) and high density polyethylene (HDPE).

"These resins are used to produce, among other items, one of the main packages for the basic food basket, food, drinks and cleaning products that are used for health and civil construction", Abiplast said.

The tariffs on epoxy resins and ethylene polymers in primary forms will also increase from 14% to 20%, which is much higher than the average for the international market, Abiplast said.

Abiplast said the tariff hikes would only benefit Brazilian petrochemical major Braskem.

"A sector so important for the national economy was hit by a hard slap, which is represented by the raising of feedstocks in a moment  the industry faces a 6.37% fall in production in the first semester of this year, in comparison with the same period of 2011, one of the worse performances of all processing industry", said Abiplast.

The sector cut by 41% its investments in machines and equipments in the first half of 2012, Abiplast said.

"Decisions like this help one company in a determined moment, but have a devastating effect in the supply chain", said Abiplast.

"There are a lot of sectors that must be protected. [These sectors] are the ones that are exposed to unfair international competition, which definitely is not the case of thermoplastics resins", it said.

By: Leo Siqueira
+1 713 525 2600

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