The Colombian Plastic equipment, Materials and Resin Industry remains one of the key growth sectors within the Colombian Economy.
Despite having been impacted by the economic crisis of 2008 – 2009, which led to a substantial decrease in the amount of plastic manufacturing exports, the domestic consumption of raw material and plastic goods led the industry to a year on year growth in terms of overall sales and production. 2011 was recorded as a historic year in this industry with an increase of more than 6% versus 2010 comps (which was a record year in itself1). Exports in this sector were more than 14% above 2010 levels. Domestic consumption, to support the construction boom which Colombia has been experiencing for the last 2 to 3 years, has had a significant impact on industrial and construction related plastics (and raw materials). The Colombian plastic industry has a relatively important impact on the Colombian manufacturing output, as employees in this industry account for approximately 14% of the industrial workforce in Colombia2. Acoplasticos, which is the Colombian plastics trade association, breaks down the plastic activity in 7 main categories, among which Rubber, plastic products and chemical substances accounts for a large portion of dollar sales value.
In terms of economic partners, U.S. is currently one of the key suppliers to Colombia of raw material (resins). Colombia currently imports twice as much plastic raw material as it exports to other countries. Polyethylene and PET have account for the largest share of resins. In terms of machinery, Colombia is net importer, as it has yet to develop a domestic industry for machinery and equipment manufacturing. The key players in this arena are China, Italy and Germany, which make up for over 50% of the machinery imports in Colombia (for plastics)3.
The Colombian plastic market is very fragmented in terms of suppliers, manufacturers and buyers. Although there is a coincidental trait in each sub-segment, where 2 to 3 companies dominate the market share, there are hundreds of secondary players that make up the plastic industry directory. With a growing economy, pulled by strong commercial exports, record breaking foreign investment (mostly in mining and petroleum) and renewed sense of political stability, Colombia is poised to be one of the most important players in the Latin American economy. Also, as Goldman Sachs analyst, Jim O’Neill, has recently named the new set of BRIC countries as CIVET’s, Colombia is one of the 5 most interesting market moving forward, as it was included in this list of emerging markets.
The Plastic sector has been performing at high growth rates, mainly due to the construction boom, which Colombia has been experiencing over the last 2-3 years. This boom, at both residential and industrial levels, has increased the usage of a variety of plastic components and raw materials, such as tubes and resins. At the same time, the high international prices for processed plastic goods, the increase in production and the higher exports that are being made to international markets, have set the tone for a positive performance for this sector in early 2012.
In 2010, the Colombian plastic exports grew 14%, as the consumption in Brazil, Ecuador, Peru and the USA, led this increase in demand4. In the first semester of 2011, the plastic sector had outgrown the 2010 comps by more than 6%5, and which made 2011 a historic year in terms of growth and sales for this sector6. Within Colombia, the plastic sector products that have the highest sales among plastic resins are the propylene polymers. Regarding the non-construction plastic products, the flexible plastic films and the packaging products remain the largest markets, in terms of sales, within Colombia.
To put into context the size and dimension of the plastic sector within Colombia’s industrial landscape, this sector directly hires approximately 90,850 employees, accounting for 14.2% of the total industrial employees of Colombia7. Within this industry, the Colombian plastics association (Acoplasticos) has broken down its reporting in 7 subcategories (each with a specific import tariff code CIIU). Overall, the industry had a positive performance in 2010, as production grew 4.6% and sales grew 3.8% vs. 2009 comps.
It is important to highlight that although there is a trade disparity, the Colombian economy outgrew its trade partners – in this industry – in terms of consumption and overall production. As most countries in the world contracted or remained flat in 2010, Colombia grew in mid single digits – as this growth in imports show.
Among the countries that Colombia exports and imports its plastic and plastic derivative products, USA remains the main commercial partner.
Regarding plastics resins, the categories that have the highest volume of usage in Colombia are:
• Propylene copolymers
• Polyvinyl chloride
• Polythene teriphlate