Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • K Show
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Processor of the Year
    • Best Places to Work
    • Women Breaking the Mold
    • Rising Stars
    • Diversity
    • Most Interesting Social Media Accounts in Plastics
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • Pellets and Politics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • K Show Livestream
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • PN Live: Mergers and Acquisitions
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Resin Prices
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Custom
    • Sponsored Content
    • LS Mtron Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
May 19, 2015 02:00 AM

Brazilian currency devaluation benefits plastic machinery exports

Anna Flávia Rochas
Correspondent
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    BNDES
    BNDES President Luciano Coutinho at the Feiplastic opening ceremony.

    SÃO PAULO — Brazil's currency devaluation against the U.S. dollar is helping national machinery producers become more competitive and boost exports.

    But international sales alone won't compensate for the steep drop expected this year in domestic demand, as plastic processing companies struggle to finance equipment and cope with rising output costs.

    Brazil's National Development Bank (BNDES), which plays a key role in financing investment by domestic plastics processing companies, raised rates for some loans this year to reduce expenses, in response to tighter fiscal policy.

    There was no formal announcement of a reduction in the bank's budget for the plastics industry, but approval of loans this year is slower than it used to be, said Gino Paulucci Jr., vice-president of Brazil's trade association for the machinery industry, the São Paulo-based Abimaq.

    “We have news that this is happening frequently this year,” Paulucci said in an interview at Feiplastic 2015 in São Paulo, which took place May 4-8.

    BNDES finances machinery purchases indirectly through intermediary commercial banks. Those banks assume the risk, accept or reject credit applications, and are also restricting lending this year, leaving plastics companies with nowhere to turn for financing, said Paulucci, who's also a director at Polimáquinas Indústria e Comércio Lta., a Bauru, Brazil-based machinery manufacturer for the plastics packaging industry.

    BNDES President Luciano Coutinho, who spoke at the Feiplastic opening ceremony, said the national bank was willing to talk to plastics industry leaders about alternatives to the current credit shortage. 

    “It's the viability of the plastics chain that ensures the viability of the entire petrochemical complex in the country,” he said. “Without a competitive capacity in the final processing chain, the whole system of competitiveness is at risk.”

    While conditions for domestic sales worsen, the U.S. dollar's appreciation has increased Brazilian machinery manufacturers' ability to compete in international markets.

    However, the devaluation of Brazil's currency, the real, hasn't fully offset the increase in output costs as inflation soars, Paulucci said. The real has dropped about 50 percent in value against the dollar in the last two years.

    Most potential clients at Feiplastic interested in new machinery from Polimáquinas were foreigners, Paulucci added.

    “Oddly, different from what is being said, all the countries neighboring Brazil are doing good [in demand for new plastics machinery],” he said. “Argentina is buying a lot, as well as Mexico, Chile, Peru and Colombia.”

    Eighty percent of Polimáquinas production was exported in February, and Paulucci expects international sales to account for a much bigger slice of its total production this year in comparison with 20 percent last year.

    Paulucci said domestic clients still order machines, but are not completing purchases because of financing restrictions.

    Brazilian injection molding machinery group Indústrias Romi SA has also seen an increase in international interest for its machines, as the dollar appreciation helped their product became more competitive.

    “Some say: your machine is expensive, but now that the dollar is appreciated, let's talk,” said William dos Reis, Romi's director of plastic processing machines.

    Santa Bárbara d'Oeste-based Romi said new orders in its plastics machinery unit fell 22.8 percent in the first quarter of 20115, compared with 2014, and operating sales dropping 13.2 percent.

    While a stronger dollar helps Brazil's machinery sector, it's hurting plastics processors when it comes to acquiring raw  materials, because Brazilian producers still import a majority of their resins and naphtha.

    Plastic processors also can't transfer those rising costs into their sales price fast enough to match inflation, which is slowing consumer demand.

    “Regarding raw materials, the processing industry has no gain with dollar valuation. On the contrary, when the dollar appreciates, we immediately suffer with rising costs but we have no counterpart in revenue,” said José Ricardo Roriz, president of Brazil's plastics industry trade association, Abiplast, in São Paulo.

    In addition to the currency challenge, Brazilian processors are facing a 40 percent rise in energy prices since 2014, as well as an increase in labor costs as the government cuts payroll tax incentives.

    RECOMMENDED FOR YOU
    Georgia home to new PET chemical recycling plant
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    OSHA: Worker died at plastics firm after duct tape covered safety guards
    2
    Tornadoes, severe weather impact Texas resin plants
    3
    China-owned parent company of GD Medical Inc. is buying Trademark Plastics for $42M
    4
    Plastics firms work to eliminate PFAS use as pressure mounts
    5
    Eastman posts lower profit, plans job cuts
    SIGN UP FOR OUR FREE NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Tire Business
    • Urethanes Technology
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • K Show
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • Processor of the Year
        • Best Places to Work
        • Women Breaking the Mold
        • Rising Stars
        • Diversity
        • Most Interesting Social Media Accounts in Plastics
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • Pellets and Politics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • K Show Livestream
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • PN Live: Mergers and Acquisitions
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Resin Prices
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Custom
      • Sponsored Content
      • LS Mtron Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified