17 November 2013 17:30 [Source: ICIS news]
CARTAGENA (ICIS)--Colombia-based Grupo Mundial is continuing to look for mergers and acquisitions (M&A) opportunities in unsaturated polyester resins (UPR) in a fragmented Latin America market, its president said on Sunday.
“In UPR we are always actively looking for opportunities, but profitable ones – not just for growth or to plant our flag,” said Santiago Piedrahita, president of Grupo Mundial.
Santiago spoke to ICIS on the sidelines of the 33rd annual Latin American Petrochemical Association (APLA) meeting in Cartagena, Colombia.
Grupo Mundial has capacity of 80,000-85,000 tonnes/year of UPR capacity in Brazil, Colombia and Venezuela, with about 60,000 tonnes/year in Brazil alone, he noted.
“UPR is a very fragmented market, especially in Brazil with around 12 producers. Other Latin America countries typically have two or three each,” said Piedrahita.
“The market needs to be consolidated and reorganised. The market will grow much larger than the current size, but we could destroy value if there is no consolidation,” he added.
The UPR market is growing at around two times GDP levels in Latin America, said Dario Mello, general manager of the chemical business.
Grupo Mundia has invested around $7m (€5m) over the last two years on developing UPR sheet moulding compounds (SMC), he said.
“This will compete with PE [polyethylene], PP [polypropylene] and ABS [acrylonitrile-butadiene-styrene], mainly in civic construction,” said Mello.
Civic construction includes residential buildings, which use UPR in tubs, pool, pipes and flooring.
“The big challenge is to replace other plastics with UPR’s temperature, chemical and mechanical resistance properties. Usually, it is mixed with fibreglass,” said Mello.
The APLA conference ends on Tuesday.
($1 = €0.74)
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