The biggest problem faced by Brazil’s plastics processing industry is its splintered nature, José Ricardo Roriz, president of the industry association Associação Brasileira da Indústria do Plástico (Abiplast; www.abiplast.org.br), remarked recently. To better position itself in negotiations on prices and supply conditions, Roriz said, the sector will have to consolidate and build more powerful companies. This would boost its export chances.

Most plastics processors in Latin America’s largest nation are small and medium-sized companies. Less than a third (35%) of the 11,526 Abiplast members at the end of 2009 (11,329 in 2008) had a workforce of four employees or less. Only 47 companies employed more than 500 workers. Overall, some 324,000 people were employed in Brazil’s plastics sector in 2009, up from 318,000 in 2008.

Some 9,000 companies employing more than 250,000 workers are located on the country’s southern coast – in Rio Grande do Sul, Santa Catarine, Paraná, São Paulo and Rio de Janeiro. By contrast, less than 20 companies are based in each of the more remote states of Amapá, Roraima, Acre and Rondónia.

Brazilian plastics converters consumed about 5.19m t of standard thermoplastics in 2009 – a year-on-year increase of 1.6%. Despite this rise, the processing sector saw sales revenues drop back 12% to EUR 13 bn, Abiplast says in its annual report “Plástico – O Perfil da Indústria Brasileira de Transformação de Material Plástico 2009”. Polypropylene (PP) accounted for some 26% of standard thermoplastics processed in Brazil in 2009, polyethylene (PE) for 44%. HDPE had a 19% share of the total, PVC 14%. LDPE had a share of 12% and LLDPE accounted for 13%. Abiplast’s figures indicate that demand for PET, polystyrene (PS) and EVA was much lower. The association does not provide data on consumption of engineering thermoplastics and thermosets.

Some 57% of standard thermoplastics converted in Brazil last year were extruded, 19% injection moulded. The third most common processing method was blow moulding, which accounted for 16%. Among plastics applications, packaging led, with food packaging taking a share of 17.5%, non-food 14.5%. Other fields of application include construction (15.6%), agriculture (10.6%), household goods (9.3%) and the pharmaceutical, hygiene and cosmetics sector (9.1%).

Abiplast’s report reveals that 5.56m t of plastics were produced in Brazil in 2009. According to the Brazilian chemical organisation Associação Brasileira da Indústria Química (Abiquim; www.abiquim.org.br), the country’s total plastics manufacturing capacity currently stands at 7.5m t. Following its takeover of Quattor (see Plasteurope.com of 27.01.2010), Petroquímica Triunfo (Plasteurope.com of 21.05.2009) and Politeno, the industrial powerhouse Braskem (São Paulo / Brazil; www.braskem.com) has swallowed up all the country’s PE, PP and EVA capacities. Braskem divides the Brazilian PVC production sector with Solvay Indupa (São Paulo / Brazil; www.solvayindupa.com). Small companies have dominated both the PS and the PET segment since Braskem pulled out in 2009 – see Plasteurope.com of 15.01.2009.

Braskem, Solvay and Dow Brasil are increasingly setting their sights on the market for bioplastics, including sugar cane-based products – see Plasteurope.com of 26.11.2009. A study by the international market research group Frost & Sullivan (www.chemical.frost.com) forecasts that the Brazilian market for bioplastics will reach USD 618m in 2015 – see Plasteurope.com of 15.06.2010 – up from USD 4.4m in 2009. This would see capacities grow from 1,300 t/y to more than 250,000 t/y.

Despite intensified efforts by Brazil’s plastics processors in recent years to close the gap between imports and exports, the export deficit has now reached nearly USD 1 bn. In 2009 the country imported plastics products worth USD 2.1 bn (EUR 1.5 bn), compared with USD 2.4 bn in 2008, while exports generated about USD 1.2 bn (USD 1.4 bn) in revenue. In tonnage terms, imports totalled 469,000 t (487,000 t), exports 280,000 t (332,000 t). “Brazil’s imports of plastics products are almost double its exports. This makes no sense for an oil-rich country,” Abiplast president Roriz said. Brazil has been a net exporter of oil since 2006. After increasing output by 7% to 100.4m t, it is now the world’s 13th largest oil producer, according to BP figures.

For PVC, PET and EVA, Brazil’s imports by far exceed its exports. Colombia is the most important importer of these Brazilian-made polymers, closely followed by neighbouring Argentina. More than half the PET imported by the country comes from Taiwan. Some 61% of its EVA imports originate in the US, 18% in western Europe. Exports of PP, PE and PS exceed imports, with important end markets located in China, Argentina and Belgium.

Exports of plastics and rubber machinery to Brazil completely collapsed in 2009, with imports from worldwide sources down 37% against the 2008 record. Imports of machinery from leading producer Germany tumbled by a dramatic 52% to EUR 51.1m last year, according to figures of the plastics and rubber committee in the German machinery manufacturers association VDMA (Frankfurt; www.kug.vdma.org). Despite this massive decline, Germany remains Brazil’s most important trade partner for plastics and rubber machinery, accounting for 20% of imports, followed by China and Italy.

Roriz predicts that Brazil’s plastics consumption will increase by 8-10% in 2010. Looking farther ahead, future growth is expected to be spurred by spending on the 2014 football (soccer) World Cup, which Brazil will host, and the 2016 Olympics in Rio de Janeiro. For the present, the strong local currency is attracting imports.

Plastics Processing in Brazil
Material	Company	Capacity (t/y)
LDPE	Braskem (incl. Quattor)	805,000
	Total	805,000
LLDPE	Braskem (incl. Quattor)	1,380,000
	Total	1,380,000
HDPE	Braskem (incl. Quattor)	2,080,000
	Total	2,080,000
PP	Braskem (incl. Quattor)	1,915,000
	Total	1,915,000
PS	Dow Brasil	190,000
	Innova	150,000
	Unigel	190,000
	Videoloar	120,000
	Total	650,000
PVC	Braskem	510,000
	Solvay Indupa	300,000
	Total	810,000
EVA	Braskem	440,000
	Total	440,000
PET	M&G Fibras e resinas	292,500
	M&G Polimeros	550,000
	Total	842,500

Source: Abiquim