What is your assessment of the current state of the petrochemical industry in Latin America?

The petrochemical industry in Latin America is navigating a critical period marked by the global overproduction of petrochemicals and declining demand in Asian markets. This has allowed Asian companies to seize the opportunities in the region, which has significantly reduced profitability for every country, with Brazil being the most affected due to its size and relevance. What are APLA’s main initiatives to support companies in this current context?

On the one hand, associations like Abiquim in Brazil, CIQyP in Argentina, and ANIQ in Mexico focus on local regulatory frameworks and government consultations. Abiquim, for instance, has done an excellent job of raising awareness within the Brazilian government about the current geopolitical situation and its impact on the industry and highlighting the necessary measures to safeguard the sector.

On the other hand, our approach at APLA is different. We collaborate closely with these local associations but refrain from direct involvement in their domestic policy-making processes. Instead, our mission is to promote broader and more strategic initiatives by establishing global regulatory norms, fostering dialogue among key industry players, and working with the governments to analyze regulatory trends in Latin America, the US and Europe. We want to create a platform for constructive discussions that can drive the holistic development of the sector. What areas can Latin America’s petrochemical industry improve?

Latin America’s petrochemical industry has shown an impressive ability to adapt to new realities, and has consistently demonstrated resilience, overcoming challenges such as the Asian petrochemical oversupply, logistical bottlenecks created from disruptions in the Suez and Panama Canals, and regional political changes, such as Argentina’s 2023 elections and the transition following Claudia Sheinbaum’s election in Mexico.

Of course, there is always room for improvement. However, the industry is already addressing several critical areas. Key priorities include decarbonization, improving energy efficiency, and focusing on higher-margin niche segments. Many opportunities are coming from the nearshoring trend, particularly prominent in Mexico. Yet, Mexico alone cannot meet the demand surge driven by nearshoring activities. As such, it is likely that nearshoring will spill over into other South American countries, creating substantial opportunities throughout the region. It is crucial for the industry to position itself and build the necessary infrastructure to capitalize on these developments.

Moreover, Vaca Muerta’s development in Argentina has the potential to unlock a myriad of possibilities, particularly in the field of liquefied natural gas (LNG) and its byproducts. Such developments could benefit both large and small and medium-sized companies, paving the way for new partnerships and increased regional competitiveness. What will be the main themes at APLA’s annual meeting in Cartagena?

One of the key topics will be a comprehensive geopolitical analysis led by Carlos Pascual, senior vice president of global energy at S&P. Given that the meeting coincides with the US presidential elections, this session will focus on how the electoral outcomes could reshape the geopolitical landscape and influence the petrochemical industry in Latin America.

We will dedicate a panel to addressing the pressing issue of global oversupply, examining its implications, and discussing potential future scenarios. The goal is to understand how the sector can better navigate the current supply-demand imbalances and identify strategies for adaptation. Another panel will focus on nearshoring and its impact on Latin America. Experts will share insights on how companies can strategically position themselves to benefit from this trend and what logistical and infrastructural considerations need to be considered. Regarding logistics, we will discuss Latin America’s resilience in overcoming these hurdles. Unfortunately, issues like those seen in the Panama Canal will likely persist, so it is crucial to learn from them and prepare for the future.

That covers the first two days of the event. We will conclude the annual meeting with a session on sustainability, focusing on innovation. We will discuss how new projects must consider carbon footprints and product lifecycles, ensuring they are reusable or recyclable, all within the context of a circular economy and carbon footprint offsetting. What final message do you have for the readers of this report?

My final message is that, despite its challenges, Latin America has always managed to find great opportunities. Our goal is to identify and harness these opportunities for the world-class Latin American industry with a level of excellence that drives superior results.