Dear Reader, We cordially welcome you to the Argentina Petrochemicals and Chemicals Industry Exploration 2016, the first book in a series of Industry Explorations between GBR and APLA, released exclusively at the 36° Latin American Petrochemical Annual Meeting. The 36th edition of the traditional point of meeting of the leaders and decision makers of the industry has been declared of National Interest by the Presidency of the Nation, confirming that this activity represents for both the host country and the entire region a magnificent opportunity to show the progress of the industry, its development and expansion in Latin America, an environment conducive to attracting new investment scenario. The aim of this cooperation work is to provide an investment guide, highlighting the opportunities for investment in Argentina’s petrochemical and chemical industries, particularly in light of the new government administration and the country’s upstream potential. A series of interviews with the key players from across the petrochemical and chemical industries in Argentina, as well as some of the companies providing key support services, such as distribution, third party and integrated logistics, and emergency response, are contained in this edition. You will also find insights from not only the country’s biggest petrochemical producers, including YPF and Dow Argentina, but also comparisons between Argentina and its largest competitors in Latin America, such as Mexico and Brazil. We explore the potential for a shale revolution here, hopefully similar to what happen in the United States, and discuss Argentina’s goal of producing enough petrochemicals to satisfy both domestic and regional demand. Additionally, we deeply discuss Argentina’s chemical distribution environment, in which more than 120 companies operate, and the potential for M&A activity now the country has removed international import restrictions. Please join us in reviewing the opportunities present in Argentina! Jose Luis Uriegas President, APLA PERU Exclusive Data and Interviews Maps BOLIVIA Leaders from both the Quantitative data help private and public sector readers better understand delve into the nuances and the position of Argentina, 72 64 56 48 nascent developments that especially relative to its PARAGUAY are shaping the industry. global competitors. JUJUY San Salvador 10, 14, 20, 28 9, 29, 34, de Jujuy Salta and many more 43, 58 FORMOSA SALTA 24 24 Asuncion BRAZIL Formosa TUCUMAN CHACO San Miguel Santiago de Tucumán del Estero Resistencia Posadas MISIONES CATAMARCA Corrientes Catamarca SANTIAGO Editorial La DE ESTERO CORRIENTES Rioja LA RIOJA SANTA Content FE SAN JUAN Global Business Reports’ 80 Córdoba journalists provide on-the- San Juan Santa Fe Paraná ENTRE ground analysis of the trends Mendoza CORDOBA San Luis RIOS that are shaping Argentina’s 32 32 URUGUAY oil and gas industry. Santiago SAN LUIS South MENDOZA Montevideo Pacific Buenos 8, 24, 48, 56, Aires La Plata Ocean South 82, 87, 98 CHILE Atlantic Ocean Santa Rosa BUENOS AIRES LA PAMPA NEUQUEN Neuquén An introduction to Chemicals Specialty Chemicals Services and Technology in Argentina RIO 48. Speciality Chemicals 82. The only way is up: Argentina’s EPC NEGRO Argentina Petrochemicals and Chemicals 2016 Viedma 40 8. Argentina’s Year of Change 50. Interview with Meranol providers give their view Industry40 Explorations 10. Interview with Argentina Investment and 51. Interview with DuPont Latin America 84. Interview with AESA Global Business Reports Trade Promotion Agency (AAICI) 52. Interview with Plaquimet and with Reagens 85. Interview with Techint Engineering and 11. Interview with APLA Varteco Construction Rawson 12. Interview with APLA 53. Interview with Lanxess 86. Interview with Odebrecht Argentina 13. Interview with Instituto Petroquimico 87. Argentina’s chemical Services sector: Seeing Area CHUBUT Argentino (IPA) new opportunities in sustainability • Total 2,780,400 km2 (*) 14. Interview with Camara de la Industria 88. Interview with Bolland Quimica y Petroquimica (CIQYP) Agrochemicals 90. Interview with Odfjell Terminals Considering 1,084,386 km2 of the Exclusive Economic Zone area, Argentina 15. The case for chemicals: Argentina’s growth 91. Interview with Emerson Process Management Argentina is 3,939,463 km2 prospects 56. Agrochemicals and Fertilizers: Enabling the 92. Interview with GE Water and Process In this figure the areas claimed are not included. 18. Interview with Instituto Petroquimico growth of Argentina’s agriculture Technologies 8th largest country International Boundary Argentino 63. Interview with Croplife Latin America 93. Interview with Siemens • Water (%) 1.57 SANTA Province Boundary CRUZ 19. Interview with IHS Markit 64. Interview with CASAFE 94. Interview with Restec National Capital 20. Interview with ICIS 65. Interview with Chamber of Fertilizers and 95. Interview with Intertek Population Province Capital 21. Interview with EY Agrochemicals (CIAFA) 48 • 2015 estimate48 43,431,886 Falkland Islands 66. Interview with Aapresid • Density 14.4/km2 Islas Malvinas 67. interview with Chemotecnica administred by U.K., claimed by Argentina N Rio 68. Interview with NOVA Distribution and Logistics ( ) * Area does not include territorial claims in Antarctica Gallegos Petrochemicals 69. Interview with Grupo los Grobo (965,597 km2, including the South Orkney Islands), the Falkland Islands (11,410 km2), the South Georgia (3,560 km2) 70. Interview with Arysta Lifescience Argentina 98. A unique situation: Chemical distribution in and the South Sandwich Islands (307 km2) Strait of 24. Partnerships create opportunities for 71. Interview with Rizobacter Argentina Magellan petrochemical dominance 72. Interview with Nufarm 103. Interview with Celsur Logistica TIERRA DEL FUEGO, ANTARTIDA E 28. Interview with YPF 73. Interview with Gleba 104. Interview with Brenntag Argentina ISLAS DEL ATLANTICO SUR 32. Interview with Dow 74. Interview with Agroservicios Pampeanos 105. Interview with BDP International Ushuaia 34. Map of petrochemical plants 75. Interview with Insuagro 106. Interview with Henry Hirschen This research has been conducted by 36. Interview with Braskem Argentina 76. Interview with UPL Argentina 107. Interview with Arubras Alice Pascoletti, Laura Brangwin, 37. Interview with Petroquimica Cuyo 77. Interview with Brometan 108. Interview with Grupo Simpa Harriet Bailey, Katherina Prügel 72 and Francis Lister 80 56 64 56 48 39. Interview with Compania Mega 78. Interview with Rotam 109. Interview with Mcassab Argentina 40. Interview with ExxonMobil Exploration 79. Interview with Reopen 110. Interview with Logistica Milo Edited by Mungo Smith Graphic design by Designa Argentina 111. Interview with Mesucan 41. Interview with Petrobras A Global Business Reports Publication 0 100 200 300 Kilometers For updated industry news from our 42. Interview with Carboclor 114. Final Thoughts on-the-ground teams around the world, 0 100 200 300 Miles 44. Interview with Refinor 116. Index please visit our website at gbreports.com, subscribe to our newsletter by signing up 45. Interview with YPF Tecnologia to our VIP list through our website, 60 or follow us on Twitter: @GBReports 74 Industry Explorations ARGENTINA PETROCHEMICALS AND CHEMICALS 2016 Global Business Reports ARGENTINA PETROCHEMICALS AND CHEMICALS 2016 Industry Explorations • GBR • AN INTRODUCTION TO CHEMICALS IN ARGENTINA "Argentina is now at the right stage to focus on foreign investment and therefore should be of interest to U.S., European and Asian investors attending our Annual Meeting. Attendees from North America are looking for opportunities that could arise from Latin America, both as a potential market for their extra capacity, and as an opportunity for new production projects across the region." - Jose Luis Uriegas, President, APLA Image: Profertil EDITORIAL Global Business Reports Global Business Reports FACTSHEET PETROCHEMICAL PRODUCTION Source: IPA Thousand Tons 8.000 Argentina’s year 7.000 of change 6.000 5.000 4.000 By Harriet Bailey 3.000 2.000 1.000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Transition. This one word sums up much that there is to say about the huge upheavals years of Argentina’s economic decisions so rapidly. “The big questions now surround taking place in the politics, economics and foreign policy of Latin America’s third largest Argentina’s fiscal deficit, along with inflation levels. We need to recover credibility from country, Argentina, in 2016. President Mauricio Macri was voted in on December 10th, the international community, which is a challenge for Argentina as we need foreign in- 2015. To say that the Cambiemos coalition government found itself at the bottom of a vestment going forward,” explained Miguel Morley, president of agrochemical company -1.6% very long uphill climb would be an understatement. Agroservicios Pampeanos, part of Canada-based Agrium. “The government is attempting Current account Macri faced three big issues at the start of his four-year term: rocketing inflation, mount- to solve this problem whilst protecting the weakest segments of society. One in three balance (% of GDP) 8 ing international debt and an overvalued peso. In what has been dubbed his “macri- 22,303 Argentines are below the poverty line and it is challenging to take action while also pro- Source: IMF (2016 estimates) 9 economic shock treatment”, his first move was to abandonel cepo, “the clamp”, pegging USD tecting this segment.” the peso to the dollar, allowing Argentina’s national currency to float