SAO PAULO, BRAZIL — The three most important economies in the Mercosul trade region — Brazil, Argentina and Chile — begin the year 2000 predicting an annual growth of 4-10 percent in the plastics sector. In Brazil and in Chile, the forecasts point to a real increase in resin consumption in comparison to historical levels, while in Argentina it will be more a sign of recovery after a difficult 1999.
Industry analysts in Brazil expect a 10 percent jump in resin consumption this year, as a reaction to the inertia that took over the country after the devaluation of the Brazilian currency, the real.
"There are basically two reasons to be optimistic: First of all, the currency exchange rate has apparently stabilized; secondly, the inflation pressure suffered in late 1999 seems to be over," said Jean Daniel Peter, president of SIRESP, the trade association of resin producers of the state of Sao Paulo.
Merheg Cachum, president of the Sao Paulo-based molders association ABIPLAST, foresees a good year for plastics in the domestic market in 2000 as well, but declined to pinpoint any growth figures. He said plastics consumption increased 3.84 percent in Brazil last year, totaling 7.4 billion pounds.
Official gross domestic product projections for Brazil indicate a 4 percent growth this year. But packaging industry leader Sergio Haberfeld said he is working with a 2-2.5 percent growth prognosis for the GDP.
"A 4 percent growth rate could cause consumption to take off, bringing back inflation and higher interest rates. With Brazil growing 2-2.5 percent, the packaging industry should increase between 3-4 percent," he said.
Haberfeld is president of the Brazilian packaging association (ABRE), the Latin American packaging trade association and the World Packaging Organization (WPO).
Automotive sector officials calculate that vehicle production in Brazil will total 1.5 million units in 2000, compared to 1.36 million units last year.
In Chile, the plastics industry association ASIPLA estimates that the sector will expand 7 percent this year, at par with the rates achieved during the 1992-97 period. In 1999, plastics consumption in Chile totaled 1 billion pounds, 4 percent more than the previous year.
According to ASIPLA's president, Julio Compagnon, the factors contributing to the organization's prognosis include the launching, in January 2000, of Petroquim SA's 220,460-pound-per-year polypropylene plant, the reactivation of the economy as of late 1999 and the start of a new presidential term.
"We always experience strong economic recoveries during the first years of a new government," Compagnon said.
GDP in Chile is expected to increase 5.5 percent in 2000, after shrinking 0.3 percent in 1999.
In Argentina, 1999 was a recession year for the entire economy, ending the year with a 10 percent reduction in the volume of plastic resins processed, which amounted to 2.21 billion pounds.
"In 2000, we expect moderate growth [over 1999] of around 4-5 percent, stimulated by a 3.5-4 percent evolution in GDP," said Hector Mendez, president of CAIP, the Argentine Chamber of the Plastics Industry.
Mendez said that, as a result of the devaluation in the real, exports of Argentine plastic goods to Brazil fell 50-60 percent in 1999, while sales of Brazilian finished and semifinished plastics goods to Argentina grew roughly 8-10 percent in volume and decreased 10-12 percent in value.
"We hope this situation improves for both countries, but without returning to the same level of trade that existed prior to the real devaluation," Mendez said.