Colombia Petrochemicals Report 2012
Business Monitor International, November 2011, Pages: 40
Business Monitor International's Colombia Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Colombia's petrochemicals industry.
Strong economic growth will continue to support the Colombian petrochemicals market. Coupled with the feedstock potential offered by refinery expansion, this could prompt further investment in capacity, according to BMI’s latest Colombia Petrochemicals Report.
The Colombian petrochemicals market experienced healthy growth in 2011 across a broad range of products. In H111, market fundamentals helped boost local PVC prices. The raising of PVC import tariffs from 5% to 10% also helped drive prices upwards, increasing margins for local producer Mexichem Resinas Colombia (MRC), which represents 90% of the domestic market as well as exporting 60% of its output. Ecopetrol subsidiary Propilco reported in September 2011 that its PP sales were running at 430,000-450,000tpa, indicating that capacity utilization was at 86-90%. PS supply was disrupted by outages and a truckers strike in Q111, but the tightening of the domestic market was only temporary.
On the downside, BMI emphasises the possibility of the Ecopetrol sale falling through - it has already stalled several times in 2011 and there are numerous legislative and regulatory difficulties in selling state-owned assets in Colombia. Privatisation of the firm will be crucial to injecting new investment in downstream sectors and securing indigenous feedstock resources.
The Colombian government is currently in the middle of a refinery expansion programme, hoping to turn a small oil products import requirement into an equally small export flow. It opens up opportunities for increasing naphtha feedstock availability for the downstream petrochemicals industry. Ecopetrol's 2011- 2020 Strategic Plan includes plans to carry out upgrades and expansions at both its major refineries. The company plans to invest US$2.9bn in the Barrancabermeja refinery and US$1.3bn in Cartagena.
Although Ecopetrol's current 2015 plan is particularly aimed at refining capacity, the 2011-2020 plan will focus on improving existing operations by improving margins, thereby raising its ranking in the Solomon index (which benchmarks refineries by performance and rank). The plan also calls for the two refineries to ensure a regular supply of feedstock for the country's petrochemicals industry. Another large, private initiative is a new refinery in Sebastopol, funded by the Exim Bank and the IFC. Overall capacity is forecast by BMI to reach 346,000b/d by the end of 2014. However, BMI does not believe that any further petrochemicals expansion is viable until the completion of the expansion of the refineries at Barrancabermeja and Cartagena, which is due to be completed in 2014 or 2015.
In 2011 Colombia’s petrochemicals facilities included capacities of 120,000tpa ethylene, 45,000tpa benzene, 20,000tpa toluene, 35,000tpa xylenes, 45,000tpa PET, 60,000tpa LDPE, 103,000tpa PS, 400,000tpa PVC, 455,000tpa PP, 115,000tpa ammonia and 185,000tpa urea. These capacities are unlikely to change over the next five years, unless Ecopetrol’s plans come to fruition within this time.
In BMI’s Americas Petrochemicals Business Environment Rankings, Colombia is in eighth place with its score increasing just 0.1 point since 2011 to 38.2 points due to a slight improvement in its country risk score. Colombia’s petrochemicals industry is well integrated with suppliers and was operating at high rates in 2011. Growth in refining capacities offer the opportunity for further growth based on increased naphtha feedstock potential.
Executive Summary
SWOT Analysis
Colombia Petrochemicals Industry SWOT Analysis
Colombia Political SWOT Analysis
Colombia Economic SWOT Analysis
Colombia Business Environment SWOT Analysis
Global Petrochemicals Overview
Petrochemicals Market Overview
Table: World Ethylene Production By Country, 2011 And 2015 (‘000 tonnes capacity)
Financial Results
Table: Financial Results Of Major Petrochemicals Companies, 2010
Global Oil Products Price Outlook
Latin America Overview
Colombia Market Overview
Table: Colombia’s Petrochemicals Facilities
Regulatory Structure
Industry Trends And Developments
Petrochemicals Business Environment Ratings
Limits Of Potential Returns
Risks To Realisation Of Returns
Industry Forecast Scenario
Table: Colombia’s Petrochemicals Sector, 2007-2015 (‘000 tpa, unless otherwise stated)
Macroeconomic Outlook
Company Profiles
Empresa Colombiana de Petroleos (Ecopetrol)
Mexichem Resinas Colombia (MRC) (Petroquímica Colombiana (Petco))
Polipropileno del Caribe (Propilco)
BMI Methodology
How We Generate Our Industry Forecasts
Chemicals And Petrochemicals Industry
Cross Checks
Business Environment Ratings
Table: Petrochemicals Business Environment Indicators And Rationale
Weighting
Table: Weighting Of Indicators
- Empresa Colombiana de Petroleos (Ecopetrol)
- Mexichem Resinas Colombia (MRC)
- Petroquímica Colombiana (Petco)
- Polipropileno del Caribe (Propilco)
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