Market report on PU chemicals and products in South America

Flexible foam is by far the single most important market for polyurethane chemicals in South America, accounting for 65% of production in the region, whilst rigid foam accounts for almost 20%.

These are two of the key findings in IAL Consultants’ new report, Polyurethane Chemicals and Products in South America. This is the third edition of this report, with the previous edition being published in 2004.

South America remains one of the most traditional regions of the world, the implication being that long-established markets continue to hold sway, with innovative applications and ideas tending to lag behind in terms of implementation in this region. In addition, the market is sensitive to a number of factors, including cost, and cheaper competing materials. However, on the back of a booming economic period for the region between 2003 and 2008, rising affordability has put the quality of polyurethane goods such as mattresses and pillows in regional consumers’ rooms for the first time. However the global economic crisis has put this growth on hold somewhat.

Brazil is the dominant producer of polyurethane products, accounting for 378,500 tonnes of the total 558,480 tonnes output by the region in 2008 (about 67% in all). Unsurprisingly Argentina is a distant second, barely accounting for 10% of the total. The collective CASE applications represent the third-largest end-use segment after flexible and rigid foams, with production totalling 80,760 tonnes, as seen below:

South American Output of Polyurethane CASE Products, 2008 (Tonnes)

Application                                                             Production, 2008 (Tonnes)

Cast Elastomers                                                         1,500

Footwear                                                                  39,500

Synthetic Leather                                                       1,500

Spandex                                                                     8,000

TPU                                                                             6,000

Coatings                                                                   10,200

Adhesives and Sealants                                           14,060

Total                                                                        80,760

Once again, Brazil accounts for the vast majority of the output, accounting for 75% of the total.Although footwear is the largest subsegment of use, future projections suggest that this will find the slowest growth, up until 2013. Instead, the most rapid growth – albeit touching just 4% pa – will be in the coatings market. From the market perspective:

• Although Brazil is the third-largest producer of footwear in the world, demand for polyurethane from the sector has been static in recent years. However, tightening health and safety regulations are expect to drive the demand for safety shoes, bringing some growth to the sector.
• Chile is witnessing rising demand for insulation products as the effects of global warming on climate are becoming more noticeable. This bodes well for all insulation types, including polyurethane types.
• In Colombia, as with many other countries in the region, a buoyant secondhand car market is boosting the automotive refinish sector. In general, environmental awareness in Colombia is higher than in many other countries, which is affecting the choice of paint formulations.
• Strong growth is expected in Peru, stemming from both the refrigeration and and construction sectors. Rigid foams are therefore a key area of growth.

The report Polyurethane Chemicals and Products in South America is available from IAL Consultants. (Price: EUR 5,000 for a single hard copy edition)