"In general terms, compared to other sectors, the chemicals industry has had above-average results, especially in applications that are part of value chains of products considered essential in the food, beverage, health, sanitary and cleaning sectors."
To what extent has the COVID-19 pandemic impacted the Colombian chemicals industry?
The initial impact of the COVID-19 pandemic has had mixed effects on the chemicals industry. In general terms, compared to other sectors, the chemicals industry has had above-average results, especially in applications that are part of value chains of products considered essential in the food, beverage, health, sanitary and cleaning sectors. In other applications, such as construction, automotive, or home appliances, the negative impact has been harsh. The growth rate in Colombia from January to May 2020 compared to the same period in 2019, was -13% for the aggregated economy, +1.8% for basic chemicals, -7% for other chemical products and -11% for plastics products. We expect the second semester to improve, but this will depend on the spread of the virus, and the general impact the virus will have on the economy and consumption.
How have Acoplásticos and its members dealt with the disturbance caused by the virus, and how has this developed since lockdown started in March?
We estimate that about 70%-80% of the companies represented by Acoplásticos never stopped, since they produce goods within the value chains of basic needs which were excluded from the lockdowns. For these companies, we have basically focused on promoting the adoption of biosecurity protocols in the production plants and with employees and their families and surroundings. For those companies in which lockdowns were enforced, we focused on working with the government in order to provide support with their cashflow. Since April/May, all of the companies have been operating, some with more demand than others. In the last couple of months, we have helped companies with the measures adopted when workers are infected with the virus, and we have also promoted countercyclical measures by the government to accelerate growth.
Sustainability is one of the key focus areas for Acoplásticos. Do you think this will still be a priority for the industry in the context of a depressed economy?
Definitely. Plastic waste, that is literally generated in every city or municipality, has value which is generally wasted by being dumped in landfills. Our goal is to promote a more vigorous and dynamic plastics recycling market in Colombia and accelerate our transition towards a circular economy. Our strategy is centered in five pillars: improve eco-design, generate consumer awareness, promote regulation towards a circular economy, gather information, and accelerate initiatives and companies that demand recycled materials. We believe that by promoting plastics recycling opportunities, we can generate new sources of growth and job creation, which will be key for the post-pandemic recovery.
Have there been any sections of the industry that have shown particular growth in 2020, and which areas has Acoplásticos identified as having a strong outlook?
We have seen a sharp growth in companies that provide protection against the COVID-19, such as those that produce masks, gloves, non-woven fabrics for health apparel, protective masks, among others. Bags used for deliveries or for waste disposal have also had positive results, as well as disposable articles that serve as sanitary solutions. I would also highlight the positive results of companies that produce chemicals, raw materials and packaging for food, beverages, disinfectants, cleaning products, as well as parts of health equipment used to treat the virus.
What advantages do you think Colombia has compared to its Latin American counterparts as a chemicals and petrochemicals producer?
Compared to most Latin-American countries, Colombia has had a very stable economy during the last decades. We have had stable growth rates and very sound macroeconomic indicators. Investment rates are comparatively high, which means that companies have regularly updated their processes and machinery. Also, we have a mature chemicals industry, a highly trained workforce and a medium-sized internal market.
What is Acoplásticos’ vision for 2021, and what would you like to see the industry achieve in that timeframe?
We expect a slow recovery in the second semester of 2020, and a stronger recovery in 2021. Our main goal in the medium term is to develop new and dynamic markets that offer solutions in sustainability, especially in our goal to accelerate the transition towards a circular economy.