Latin America Reports

Arkema Increases Investments in Brazil

By Charles W. Thurston, Latin America Correspondent | January 14, 2014

Arkema is augmenting its Brazilian investment this year in production technology at its recently acquired plant in Araçariguama, in Sao Paulo state, with plans to offer more of the companies’ global portfolio to customers in Brazil from local production. The company has already completed quality control upgrades at the plant, acquired in mid-2012, and is in the middle of installing a new technical service laboratory, said Eric Kaiser, Arkema Coatings Resins’ business director for the Americas, based in Cary, North Carolina.

The new investments will help the company offer more domestically-produced rheology additives and waterborne emulsions, which are substantially taxed as imports in Brazil. While Arkema declines to cite the dollar value of its existing or planned investments in Brazil, the acquisition was expected to contribute some $20 million per year to subsidiary Coatex. “South American sales in 2013 were three to four percent of our total global sales, and I do see that number growing,” said Kaiser. The company books Central American and Caribbean sales within its North America numbers.

At the same time that Arkema’s new facility has established local production in Brazil for both Coatex and Arkema Coating Resins, the company’s coatings resins business also is expanding into other new markets in Latin America. In late November, Arkema forged a strategic alliance with Miami-based Andes Chemicals for the distribution of Arkema products in the Andean region, as well as in Central America and the Caribbean.

“We see that certain countries in the Andean region, like Peru, have an attractive growth rate, and the region as a whole has a good growth rate, so an important first step for us was to establish a strong partnership with someone who can take our product to market there,” said Kaiser.

In 2013, Peru’s gross domestic product expansion was the third fastest in Latin America, at 5.2 percent, following neighboring Andean nation Bolivia at 6.4 percent, and Paraguay at a stunning 13 percent. The Latin American regional growth rate last year was 2.6 percent, according to the United Nations’  Economic Commission for Latin America and the Caribbean (ECLAC).

“The Andean region could be a hot market over the next few years, and Peru will lead growth for the region,” said Mauro Trevisani, the chief operating officer for Andes Chemical, based in Miami. “That is why last year we opened a subsidiary including a warehouse in Lima; a lot is going on there in terms of infrastructure,” he noted.
Arkema expects to serve the Andean countries from its U.S. grid of manufacturing primarily, since cross-continental logistics west from Brazil are difficult given the Amazon and the Andes mountains. “Having both east coast and west coast operations in the United States gives us the option of serving South America either from the United States or from Brazil. Arkema coatings resins supplied to clients in Brazil now are largely those being produced within the country.

Arkema’s PVDF, a paint additive with broad functionality enhancement and increasing demand, is marketed under the Kynar brand, and is among the company’s higher performance products gaining market share in Latin America. Among polyacrylate dispersing agents, Coatex markets the Ecodis and Coadis brands; among acrylic water-based paint thickeners, it markets the Rheotech, Thixol and Viscoatex brands. Coapur is the company’s polyurethane-based thickener brand.

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