A lot of countries wish they could face the “challenges” that the Brazilian plastics market is facing right now.
Annual growth of at least 5 percent? More companies entering the field every day? Almost more work than resin available? North America and Western Europe would take that in a heartbeat.
(It also doesn't hurt that all of this business is being conducted amidst a backdrop of all the meat you can eat and tasty-but-potent caipirinha drinks. Plus the Brasilplast trade show — which I attended a few weeks ago — doesn't open until 11 a.m. each day, making it easier to recover from the excesses of the previous evening. But I digress.)
From walking the floor of the show and talking to people in the industry, it sounds like the Brazilian market is in roughly the same place that the North American field was during the 1980s. There are still a lot of basic applications transitioning into plastics. This is the low-hanging fruit that North American market veterans speak of wistfully: low-tech, easily duplicated, easily entered markets that made a lot of ambitious businessmen a lot of money, even if they can't tell a polyethylene from a polyetheretherketone.
Of course, at some point, the Brazilian market will need to move beyond that, but how long will it take? Five years? Ten? And how much money will be made before that happens? With large chunks of Brazil's population (estimated at about 200 million) just now entering the middle class, it could take a while. That's a lot of washers, dryers, TVs and refrigerators that use up a lot of plastic. Not to mention electronics equipment and construction applications.
Construction especially could provide a big boost, thanks in no small part to the near-miraculous confluence of the 2014 World Cup and 2016 Summer Olympics both being held in Brazil. That double feature is going to create a windfall for plastics in new construction, stadiums and roads, not to mention souvenirs, cups, cutlery and giant “We're #1” hands made of polyurethane foam.
If it seems like I've intentionally avoided talking about plastic opportunities in Brazil's automotive market, that's because I have. After several days of being a passenger in taxis that narrowly missed suicidal motorcycle drivers on the highways of São Paulo — one of the world's 10 most-populous cities — I'm not sure if that locale needs more cars right now. I've been assured that other parts of the country aren't as hectic. That's a relief.
The wild card in Brazil is Braskem SA, a resin giant that now controls all of the nation's PE and polypropylene production and is one of its two PVC suppliers as well. Those facts would raise eyebrows in North America and Western Europe about a lack of competition. Let's hope Braskem can continue to function like a benevolent leader, somewhat like Reliance Industries in India.
As my memories of Brazil recede (maybe it was the caipirinhas), I'd like to urge Brazil's plastics market players to enjoy the here and now. The road might not be this smooth in the future.
And to end on a lighter note: Go Seleção Brasileira! (It's a soccer — I mean fútbol — thing.)
Esposito is a Plastics News senior reporter covering materials.