Specialty Chemicals - Distribution - Logistics Brazil Will Be a Name That We Will Be Hear- Tor
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Economy - Petrochemicals - Specialty Chemicals - Distribution - Logistics Brazil will be a name that we will be hear- tor. Meanwhile, as the world’s demographics ing a lot more often than we usually do over continue to rise, Brazil will only reinforce its Dear the next three years, with both the 2014 FIFA global food-producer status, thus stimulating World Cup and the 2016 Olympic Games its crop protection and food-additive markets. taking place in the beautiful South-American With so many end-market opportunities then, readers, country. Beyond the billions of sports fans that what is holding back the world’s sixth largest they will attract in front of TVs worldwide, chemical market? Tracing the cord back to the these mega-events also constitute one of the wall, we find that Brazil’s primary raw mate- keys to understanding the current social and rial and energy prices are dramatically higher economic climate of Brazil. compared to those of other jurisdictions, fact Brazil was one of the world’s best performing which subsequently affects the entire sup- countries three years ago, coming out of the ply chain; historically high capital costs and recession in 2010 with a strong GDP growth interest rates make the situation even more rate of 7.5%. This fact, coupled with the ex- difficult. These realities, alongside the recent pectations for progress that the upcoming WC shale gas boom in the US have made the and Olympics generated, put Brazil on a high- country unattractive for major petrochemi- horse of confidence for future development. cal investments, at least for the moment, fur- It is therefore no surprise that the 2.7% GDP ther perpetuating its high-cost environment. growth rate of 2011 and the 0.9% of 2012 Additionally, according to ABIQUIM, Brazil’s (the lowest of any of the BRICs during that chemical industry invests, on average, only year) came as big disappointments, creating 0.87% of its revenues in R&D, as opposed to a wave of discontent across Brazil. The people the USA’s 1.5%, and this lack of interest for went out on the streets asking for strategic in- innovation is one of the causes for which the vestments not only in $400 million stadiums, sector is still dominated by low-added value but in infrastructure, health and education: players. However, where there is will, there is the foundations of a healthy economy and of a way and national giants and success-stories a strong country. Braskem and Oxiteno are paving the way in It is within this social-economic climate terms of innovation, leading by example. The that Brazil’s Chemical Industry, the country’s key moving forward will be to find a solution fourth most important sector, is trying to re- for Brazil’s excessive raw material costs and vitalize itself and gain international competi- given the natural resource richness the coun- tiveness. The industry’s tremendous versatility try possesses, it is only a matter of time until and virtually infinite pool of end-applications this will occur. puts it in a privileged position, which allows This book is a microcosm of the diversity of it to take advantage of the country’s best per- players active in Brazil’s chemical industry, forming market segments. Over the last 10 ranging across the supply chain, from up- years, Brazil has seen 30 to 40 million of stream basic petrochemicals producers all the its citizens advance from the D and E social way down to the country’s bustling chemi- classes to the midlevel C class. The majority cal distributor market players. From Rio de of this shift occurred in the NE of the coun- Janeiro, to Sao Paulo, to Campinas and be- try, a region that hosts 28% of Brazil’s pop- yond, our team has had the pleasure of in- ulation, but accounts for only 13.5% of the terviewing companies that made history for nation’s GDP. The newly formed middle class Brazil’s chemical industry and that will con- is now seizing life’s small luxuries one step tinue to forge the sector’s present and future. at a time: from better personal care items to We would like to extend our gratitude to all basic cars, people are gradually getting locked those who shared their insights and expertise into the consumerist lifestyle. Furthermore, with us. although implemented at a slow rate, govern- mental programs such as “Minha Casa, Minha Razvan Isac, Ana-Maria Miclea, Vida” are boosting the construction market Clotilde Bonetto Gandolfi and Nathan Allen, and implicitly, the paints and coatings sec- Global Business Reports 50. Food and Personal Care Overview BACK TO BASICS Industry The Giant of South America 52. Interview with ITW Chemicals MARCELO PUPO NOGUEIRA, GENERAL DIRECTOR Interviews 8. An Introduction to Brazil 54. Interview with Dow Corning Exclusive interviews with major chemical A BRIEF OVERVIEW OF THE COUNTRY AND ANGELO BIANCHINI, REGIONAL PRESIDENT LATIN manufacturers such as Petrom, Oxiteno, ECONOMY AMERICA AND MARCO JORDÃO, COMMERCIAL 10. Interview with the Ministry of Development, DIRECTOR BASF, Dow Corning, Evonik and Linde 56. Interview with Evonik South America Gases reveal the true opportunities and Industry and Foreign Trade DR. FERNANDO PIMENTEL, MINISTER OF WEBER PORTO, PRESIDENT challenges of Brazil. 58. Interview with Taminco DEVELOPMENT, INDUSTRY AND FOREIGN TRADE 11. Chemicals in Brazil JEAN-MICHEL DENIS, REGIONAL VICE PRESIDENT LATIN AMERICA; PEDRO MAURO PITA, SALES AND A BUMP IN THE ROAD TO GROWTH 13. Interview with Associação Brasileira da MARKETING DIRECTOR SOUTH AMERICA; AND Indústria Química (ABIQUIM) WERNER GURTNER, SALES AND MARKETING MANAGER SOUTH AMERICA FERNANDO FIGUEIREDO, EXECUTIVE PRESIDENT 18, 26, 41, 54, 56, 63 59. Pulp and Paper ORGANIC GROWTH 60. Interview with Peroxidos do Brasil Analysis Processing BRUNO JESTIN 61. Industrial Gases Viewpoints from the GBR on-the- Hydrocarbons SAFETY IN NUMBER OF MARKETS SERVED ground team on the subjects of mining Petrochemicals and Biofuels 63. Interview with Linde Gases opportunities in Mexico and security MAGNUS KARLSON, GENERAL MANAGER concerns affecting operations in the in Brazil 64. Interview with Air Liquide MARCELO FIORANELLI, GENERAL DIRECTOR country, taken from our weekly newsletter 65. Interview with Air Products the GBRoundup. 16. Brazilian Petrochemicals IN THE SHADOW OF THE US SHALE GAS BOOM RENATO MONTAGNINI, MANAGER 18. Interview with Petrom PEDRO ROQUETE, COMMERCIAL DIRECTOR 21. Baerlocher Brazil Reaching Demand JUAREZ S. COSTA, PRESIDENT AND HELBER SOLITÃO, FINANCIAL DIRECTOR Distribution and Logistics in 22. Interview with Elekeiroz 32, 76 MARCOS DE MARCHI, CEO Brazil’s Chemical Industry 24. Environmental Initiative TURNING HYDROCARBONS GREEN 68. Chemical Distribution Expert 26. Interview with Oxiteno REACHING THE END USER JOÃO PAROLIN, CEO 70. Interview with Bandeirante Brazmo Opinions 27. Ethanol 2G and Biochemicals JOAO MIGUEL CHAMMA, CEO Brazil’s industry leaders give their ORGANIC SOLUTIONS 72. Interview with D’Altomare Quimica thoughts on the increasing importance 29. Interview with Amyris ENDVAR ROSSI, DIRECTOR LIFE SCIENCES AND of environmental sustainability in their ADILSON LIEBSCH, COMMERCIAL MANAGER ALINE ZOPETTI, MARKETING DIRECTOR LIFE products and operations and the 30. Interview with GranBio SCIENCES 73. Interview with Univar Brasil infrastructure challenges facing Brazil. ALAN HILTNER, EXECUTIVE VICE-PRESIDENT 32. Analysis MARCO ANTONIO QUIRINO, PRESIDENT BIOTECHNOLOGICAL INNOVATION IN BRAZIL 74. Interview with Quimica Anastacio JAN FELIX KRUEDER, GENERAL MANAGER Toiletry and Cosmetics: Exports by Type 76. Analysis Source: ABIHPEC CHEMICAL DISTRIBUTION IN BRAZIL Favorable Demographics: Projected GDP per Capita Source: PwC Innovation for 78. Interview with M. Cassab % CHANGE PER ANNUM 25, 828 FERNANDO ABRANTES, DIRETOR Growing Needs SUPERINTENDENTE 6 Specialty Chemicals in Brazil 79. Interview with Gafor Distribution Quantitative SILVIO FAGUNDES, DIRECTOR GENERAL 25.6% 4 80. Interview with Makeni Chemicals Hair Care Products 20.7% 36. Paints and Coatings Oral Hygiene 19.3% REINALDO MEDRANO, DIRECTOR COMMERCIAL Data Soap 8.9% THE COLOR OF SUCCESS 2 8.7% y Deodorants n 81. Transportation and Storage man rea Italy o Japa 16.8% 38. Interview with Associação Brasileira dos UK Ger Spain K Disposable US a nd The most relevant quantitative data France a ssi u Canada R Pola o azil stralia Others TRANSFORMINING INFRASTRUCTURE r u a B A rgentin a bi frica exic Turkey a A Fabricantes de Tintas (ABRAFATI) M China GDP growth (PPP) India alaysi h presented in the most easily accessible M South A Indonesia Saudi Ar Nigeria Vietnam Average population growt UNDERDEVELOPMENT INTO OPPORTUNITY Agrochemicals: Land Use in 2011 DILSON FERREIRA, EXECUTIVE PRESIDENT Average growth in GDP per capita format, allowing you to view economic Source: World Bank 84. Interview with Mammoet Agricultural 40. Interview with AkzoNobel Land MICHEL BOODEN, GENERAL MANAGER and market statistics, identify trends and Agrochemicals: Cereal Yield JAAP DE JONG, REGIONAL DIRECTOR LATIN Source: World Bank 32.5 % 86. Interview with Vopak Brazil visualize infrastructure. E AMERICA AND EULER NEDER, COMMERCIAL KG/HECTAR Arable Land 5000 MANAGER FUNCTIONAL CHEMICALS SOUTH DANIEL LISAK, MANAGING DIRECTOR 4500 8.5 % AMERICA 4000 Permanent Cropland 41. Interview with BASF 3500 2012-2013 2011-2012 % 2010-2011 0.8 ALFRED HACKENBERGER, PRESIDENT SOUTH 2009-2010 Appendix 3000 2008-2009 2007-2008 2006-2007 America 9, 39, 53, 83 2005-2006 AMERICA 2004-2005 Brazil World ) Toiletry and Cosmetics: Sector Growth 42. Interview with Arkema Quimica & Arkema Into the Future Source: Associação Brasileira da Indústria de Higiene Pessoal, Perfumaria e Cosméticos (ABIHPEC Coatex Toiletry and Cosmetics: Trade Balance of Personal 30 Hygiene, Perfumery and Cosmetics ERIC SCHMITT, PRESIDENT, ARKEMA QUIMICA AND 90. Final Thoughts Source: Associação Brasileira da Indústria de Higiene Pessoal, Perfumaria e Cosméticos (ABIHPEC) 25 D MILLION US PEDRO MEDEIROS, GENERAL MANAGER SALES AND 92. Travel Guide 1000 20 Final MARKETING FOR CENTRAL AND SOUTH AMERICA, 800 15 93. Interview with HB Hotels ARKEMA COATEX Thoughts 600 10 HERMES BEZNOZ, DIRECTOR 2011 2010 2009 400 5 2008 2007 43.