"Even during the pandemic, the chemical sector performed relatively well compared to other areas of the Colombian economy, and was one of the few industries that had a positive growth rate in 2020."
What have been the main themes impacting the Colombian chemicals industry over the past year?
2020 was a challenging year for Colombia and the country saw a significant decrease in GDP, but 2021 has been positive, and we expect to see high growth rates. Even during the pandemic, the chemical sector performed relatively well compared to other areas of the Colombian economy, and was one of the few industries that had a positive growth rate in 2020.
Over the last year, there has been a lot of volatility in commodity prices and different events have affected the supply of many chemical products. These include environmental issues in the Gulf of Mexico, protests that brought the Port of Buenaventura to a temporary halt, and the situation of the containers in Asia.
Which sub-segments of the industry are performing strongly?
In terms of recovery, the sectors that saw the most decline are currently recovering faster. The construction sector started to recover in November 2020 and has been doing quite well since then. We are also seeing positive numbers in the plastics sector. Comparing production figures of January to April 2020 to that of January to April 2021, basic chemicals, which include plastics raw materials, have grown by 23%. Other specialized chemical products, which include paints, pharmaceuticals, and cosmetics, have seen a growth rate of 15% in the same time frame, with plastic products growing by 22% and rubber products by 26%.
Chemical exports are also doing quite well. Comparing figures of January to April 2020 to that of Q1 2021, exports grew by 29%. Exports even grew by 3.8% from 2019 to 2020, in spite of the pandemic. Investments in machinery and equipment experienced 27% growth comparing January 2020 to January 2021.
Do you think social unrest, such as the 2021 protests Colombia has experienced, could impact the country’s standing as a destination for foreign investment?
In May 2021, Colombia experienced strikes that lead to problems at the Port of Buenaventura and the departmental state of Valle del Cauca, which is quite important for the chemical sector. In total, approximately US$100 million was lost in the chemicals and plastics industries due to political unrest. Furthermore, Colombia lost its investment grade based on the fiscal and macroeconomic soundness of the country. However, I am confident that the Colombia will remain an attractive investment destination as the country has many positive aspects. For over 40 years, we have had a stable economy, stable governments and a disciplined fiscal regime.
Can you describe Acoplásticos’ five pillars of sustainability?
Acoplásticos’ sustainability strategy is separated into five pillars because we understand that this is a complex issue. We have a research and training institute, ICIPC, where we are developing eco-design labels for companies to be more aware that if a product is well designed, it will be easier to recycle, contributing to a circular economy. The second pillar encompasses sensibilization or cultural awareness of consumers in adequately disposing of waste. In this regard, we roll out campaigns and do cleanups at schools and festivals to create awareness and teach society how to sort and separate waste. Thirdly, we are focused on sustainability regulations and work closely with the government, congress, and local authorities in proposing regulations to accelerate our transition to a circular economy. Recently, the government announced the National Plan for the Sustainable Management of Single-use Plastics. Within this plan, lifecycle analysis will be done to determine if there are more sustainable substitutes for single-use plastics. The plan also sets out certain circular economy and recycling goals we have to achieve. Acoplásticos’ fourth pillar is focused on stimulating the recycling markets with financial activities, business rounds, research, and training to develop this market in any way that we can. Our final pillar aims to create awareness about recycling markets through market analysis, research and innovation, and to provide as much information as possible available to society.
