Polyurethane production in South America is forecast to grow by 4.6% annually up to 2016 when it will reach 906,500 t, according to a recently published report – “Polyurethane chemicals and products in South America” – from IAL Consultants (London / UK; www.ialconsultants.com). Production in the region began recovering in 2010 and since then has experienced overall growth, with total output of PU products reaching 725,300 t in 2011.

Flexible foam is the largest market for PU chemicals in South America, accounting for 58% of production and growing at around 4.5% annually, the study says. Flexible foam production is consolidating and becoming more competitive, with new companies being established in some Latin American countries including Peru and Paraguay. Specialised foams, such as those containing fire retardants, are not in great demand, IAL says, adding that South America remains one of the most traditional regions of the world and implementation of innovative applications tends to lag behind.

The study says that rising awareness of energy efficiency, followed by more stringent local legislation, will contribute to an increase in demand for PU insulation systems. However, these will still face competition from other less expensive and readily available insulating materials. Rigid foam is consequently expected to see more dynamic annual growth of around 5.1%, stimulated by the construction of retail outlets and shopping malls, where the building standards are higher and PU is a preferred material, IAL says.

Elastomers are forecast to have the slowest growth rates of all PU products, despite countries, including Brazil and Argentina, having significant production of footwear. PU coatings are recognised for their enhanced performance but their use continues to be limited because of their higher price. However, PU coatings have seen increased use in Colombia’s OEM sector and in Chile’s architectural sector following investments in reconstruction after the earthquake of 2011. The demand for PU adhesives and sealants in South America is relatively small and related to the construction sector. PU binders face competition from alternative products.

Brazil is by far the largest producer of PU products in South America and uses around 72% of the associated raw materials consumed in the region. The country has one of the fastest developing economies in the world with an annual average GDP growth over 5%. In addition, the upcoming 2014 World Cup and the 2016 Olympic Games to be held in Brazil have boosted construction levels with investments being made in infrastructure as well as hotels and other facilities.