Competitiveness of Brazil's plastic industry declining amid country's high production costs, new import barriers to raw materials, industry group says; Brazil's processed plastics imports up 7%, exports down 11% in first eight months of 2012

SANTIAGO, Chile , November 23, 2012 () – The president of Brazilian plastic industry association Abiplast, José Ricardo Roriz Coelho, has said the competitiveness of the sector is declining due to high production costs in Brazil and new import barriers to raw materials.

That is leading to increased market share for imports of plastic products into Brazil, and reduced exports of finished plastic products.

Coelho told ICIS that "we will see a 6% increase in the consumption of processed plastics in 2012. This increase in demand has been met by imports that have grown by around 7% this year."

In the first eight months of 2012, imports of processed plastics increased by 7%, while exports decreased by 11%. Coelho said that imports have risen from 9.5% of the Brazilian market in 2007 to 12% currently.

Following the decision by the Brazilian government to raise the import tariff on polyethylene (PE) to 20%, the company's only domestic producer of PE, Braskem (NYSE: BAK), has been able to push through price rises which have further damaged the sector's competitiveness.

Coelho called for measures to reduce taxes and the cost of credit in Brazil.

In 2013, he forecasts a rise in domestic plastics production of 4% compared with a 6% rise in demand. Imports will increase their share to 14% from 12%, he said.

(c) 2006

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.