Werner Watznauer President, CHILEAN CHEMICAL INDUSTRY ASSOCIATION (ASIQUIM)
"The industry workforce should be our ambassadors. If they do not have a good opinion about something in the industry, we cannot ask the public to have a good opinion."
How has Chile’s chemical industry performed in the last 12 months?
ASIQUIM was fortunate to see good performances in 2020 and 2021 for the chemical industry in Chile. Increased oil prices related to Covid and the crisis in Ukraine brought some challenges to the market, but companies have been resilient and are performing as strongly as they did pre-pandemic.
In terms of COMEX 2021, importations show an increase of 59% in US$ compared with 2020, with a total close of US$12.550 million, which represents 13% of Chilean total imports. Exports also increased 39% compare with 2020, to a total of US$3.425 million, which represents a 4.8% of Chilean total exports.
According with the statistics of the Chilean Central Bank, the chemical industry contributed 2% of Chile’s total GDP in the first quarter of 2022.
Inflation and supply chain disruptions have caused many materials and logistics to become extremely expensive. For example, two and a half years ago, shipping a 40-foot container from China to Chile cost approximately US$2,000, whereas today it can cost from US$12,000 to US$15,000, if you want it express. In addition, raw materials in general have shown an increase along with volatility in the selling price of the final products, which often generate an overpriced inventory. Today in Chile, inflation is over 10%, whereas it was normally around 2% or 3% at the maximum. These cost increases and inflation are passed down to clients but fortunately have not resulted in noticeably decreased demand yet.
Which sub-segments of Chile’s chemical industry have been most resilient in 2022, and which have the strongest potential for growth in 2023?
We have seen strong growth and development in industrial gases, adhesives, pigments, and especially construction chemicals. There has also been growth in the mining and pulp and paper segments. We do, however, expect a decrease in growth in some sectors in the years to come due to inflation.
Can you give details regarding ASIQUIM’s latest sustainability-related initiatives and focus on Responsible Care?
ASIQUIM works with Responsible Care, the global chemical industry’s environmental, health and safety (EHS) initiative to drive continuous improvement in performance. We are proud to say that in the last year, not one of our member companies incurred any major issue or incident. We put in the effort to get information to our members and encourage safety protocols and measures to be put in place in line with our focus on Responsible Care. Chile has high safety standards that are audited and monitored regularly. ASIQUIM has also implemented a university course on Responsible Care that over 500 students of six Universities have passed, and we intend to grow these figures.
Do you think there are misconceptions about the modern chemical industry in Chile, and what could be done to start changing outdated views?
In 2021, ASIQUIM, in collaboration with CADEM, made a study on how people see our chemical sector. The feedback demonstrated that people in Chile associated chemical companies with negatives concepts, such as pollution and accidents. Subsequently, ASIQUIM has started a campaign to let society know what we are doing and the advantages of the chemical industry so they can better understand the importance of the sector.
The campaign comprised of four stakeholder groups – leaders, authorities, industry and public. This also included the industry workforce and interestingly, although they have a much higher appreciation of the industry than the public, there were still some workers who had a negative opinion, especially from an environmental performance of their own companies, compared with other chemical companies in Chile. The industry workforce should be our ambassadors, and if they do not have a good opinion about something in the industry, we cannot ask the public to have a good opinion. Therefore, we hope that our campaign will allow both public and industry workers to understand the sector better and see the benefits it brings to the Chilean economy and society.