BUENOS AIRES, ARGENTINA — Moved by the ambitious goal of preparing the Latin American industry for integration with the Free Trade Area of the Americas, plastics leaders got together April 6-8 in Buenos Aires for the first Plastics Industry Congress of the Americas.
The meeting was organized by the Latin American Plastics Industry Association, Aliplast, as a parallel event to the Argenpl s 98 show, which took place in the Argentine capital from April 2-8.
``The congress is a result of the desire of plastics industry chambers of the region — Aliplast members — to identify mutual problems concerning the supply of raw materials, globalization and environmental trends,'' said Aliplast President Hector Mendez, who is also president of the Argentine Plastics Industry Chamber. ``This is one of the several preparatory meetings the group will have until the FTAA becomes reality.''
Aliplast formed in November 1996 and its country members include Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela. Bolivia is in the process of joining.
The congress joined industry leaders from 14 countries of the Americas including Canada, as well as four officials from the plastics sector in Europe. The Society of the Plastics Industry Inc. in Washington was invited, but did not attend.
During the event, Aliplast members and Canadian officials made presentations about the plastics industry situation in their countries, providing an overview of the region that revealed a series of common issues.
In general, the main concerns of the Latin American block refer to the still-informal business performance on the part of a significant portion of processors; the lack of competitiveness to survive in a global market; improper importing practices of manufactured products; the demand for better qualified and trained labor; the need to reduce import tariffs for importing capital goods and raw materials and making local prices more in line with those practiced in other countries.
``We must seek situations which allow us to better compete with other nations instead of being just mere consumers of product-exporting countries,'' said Francisco Massott, president of the Venezuelan Association of Plastics Industries, AVIPLA.
``For example, in Venezuela we pay 60 percent more than processors in Portugal pay for a ton of polypropylene and, considering the average numbers among the several types of resins, raw material represents 62 percent of the cost of a plastics product manufactured in Venezuela,'' Massott said. ``This is a complete paradox, in view that Venezuela is a significant exporter of petroleum.''
Andrew Reynolds, research director at consulting firm Applied Market Information Ltd. of Bristol, England, said the plastics sector at the turn of the century points to a global market with more than 250 resin manufacturers and more than 100,000 processors.
Armed with that information, Massott asked: ``Until when will this blindness persist: protecting 250 companies vs. 100,000 converters?''
According to Michael Mortimore, member of the Economic Commission for Latin America and Caribbean, CEPAL, the countries that are achieving success are those in which there is an important industrialization process, with a high export level of manufactured products, as well as a growth strategy.
``What we see in Latin America is the arrival of highly competitive multinational organizations who take away the market share of local companies, while the natural route toward growth should point to the creation of national companies which in a subsequent phase would become multinationals,'' he said.
Organizing the Latin American plastics industry through an association such as Aliplast is a step toward changing this scenario, said Antonio Paolini, secretary of the foreign trade committee from the Argentine Plastics Industry Chamber.
``We are repeating a successful experience of the plastics industries of the Mercosul member countries, which got together and participated in defining the basic guidelines for establishing this commercial agreement, since they know the business a whole lot better than the governments,'' Paolini said. ``We must be aware of the sector differences between each country, weigh the advantages and disadvantages, in order to seriously proceed with a commercial integration process in the Americas.''
Merheg Cachum, Aliplast's vice president and a senior industry leader in Brazil, said the smaller economies of Latin America need to be prepared when they are heading toward an agreement as important as the FTAA, which includes the United States.
``Otherwise, it is possible that certain industrial sectors simply disappear in some countries,'' he said.