Charles W. Thurston, Latin America Correspondent10.11.21
MC-Bauchemie is expanding its presence in the fast-growing Andean region with a new investment in Bolivia, complementing operations in neighboring Chile. The acquisition of Pinturas e Impermeabilizantes Linox adds to MC-Bauchemie’s South American footprint, also including Brazil, Paraguay and Uruguay.
“We want to further expand our activities in these countries as part of our Vision 2030,” said Jaques Pinto, the company’s regional director for Latin America, in a company statement in April, at the time of the acquisition announcement.
Linox, which specializes in waterproofing coatings, has Bolivian operations in Cochabamba, La Paz, Oruro and Santa Cruz. MC-Bauchemie, a specialist in concrete coatings, has a wide portfolio of waterproof coatings and sealants.
Robust Growth Expected in Bolivia
Economic recovery in Bolivia has been strong this year, following the October election of Luis Arce as president. The International Monetary Fund in June predicted a 5% increase in the country’s gross domestic product (GDP) this year, compared with an 8.8% contraction in 2020. That GDP contraction was the first in Bolivia in 25 years.
The projected ranking of the fastest-growing economies in Latin America placed Bolivia at No. 10, according to the United Nation’s Economic Commission for Latin America and the Caribbean (ECLAC). Peru and Guyana are the only other countries in South America on the Top 10 list.
Internally, Bolivia’s General Index of Economic Activity (IGAE) showed 8.7% growth during the first half of 2021, within which the construction industry expanded by nearly 33%, according to a statement by Marcelo Montenegro, the minister of economy and public finance (Economía y Finanzas Públicas) to MercoPress in September.
As one of the fastest-growing segments of the Bolivian economy, the construction industry is poised for a 20.4% overall expansion in 2021, up from a decline of 27.3% last year, according to GlobalData.
Indeed, Bolivia is on the road to recover to the 2019 GDP high of over $40 billion, which dropped to less than $37 billion last year. This recovery, however, may be increasingly based on private sector initiatives than on government entity growth.
The IMF reckons that “There is scope to raise long-run growth by phasing out preferential allocation of bank credit to state-run enterprises, improving the business environment to incentivize private investment in the non-hydrocarbon economy, and strengthening governance of core economic and regulatory institutions.”
Among limits to growth is the campaign to vaccinate the population against COVID-19, which has affected 440,000 individuals and caused some 17,000 deaths. About 11% of the country’s 12 million inhabitants have received up to two doses of vaccine, Reuters reported.
The government plan to beat the pandemic was accelerated in July, including ongoing orders for 1 million vaccine doses every 10 days, including supplies from Russia’s Sputnik V, China’s Sinopharm and J&J’s Janssen, the agency reported.
Housing Shortage Measures
The national housing shortage in Bolivia, estimated to affect nearly one-third of the population, may improve under Arce’s so-called “leftist” government policies.
Habitat for Humanity calculated that more than 67% of the population now lives in urban areas, concentrated primarily in La Paz. The organization estimated that 80% of the population will be urban by 2030.
“According to the government, the housing deficit is 250,000 houses across the country and they have set the goal to build 25,000 houses per year, which means this need will be supplied in 10 years,” Habitat for Humanity reported.
The growing economy is based in part on a 16.7% rise in the rate of urban employment in the country, fostering stronger consumer demand for paints and coatings.
While housing investment should spur demand for architectural paints, infrastructure investment will raise the demand for industrial coatings.
The General State Budget for 2021, approved in December 2020, allocated about $4 billion for public investments, 36.2% of which was earmarked for infrastructure projects.
Infrastructure Projects Targeted
The government’s plan to fuel the recovering growth of the country is based largely on increased spending on infrastructure through both government and private sector investment.
Major infrastructure projects underway include work to complete the $447 million Mi Tren light rail system in Cochabamba and the plan for a new geothermal power plant at Laguna Colorada. These will be complemented by a host of local developments, thanks to a new $290 million trust — called FARIP — set up to fund local projects.
Among recent high-profile construction projects in Bolivia, a new home for the government’s Plurinational Legislative Assembly was inaugurated in La Paz in August. The monolithic cube-shaped building of 25 stories is earthquake-proof with five stories underground.
In another high-profile move, the Inter-American Development Bank loaned more than $10 million for the expansion of the Cretaceous Park of Sucre, a dinosaur theme park. The project is part of the effort to increase international tourism, supported by the Cultural Heritage Tourism Management Program, which is primarily funded by the National Fund for Regional Development (FNDR), within the Ministry of Development Planning. This program has targeted projects in Sucre, La Paz, Potosí and Santa Cruz.
MC-Bauchemie’s Continental Presence
Prior to the Linox acquisition in Bolivia, MC-Bauchemie made several acquisitions in Chile. The company purchased Chile’s Bautek in 2015, following the purchase of PK Chile in 2014. During the same period, MC-Bauchemie purchased Brazilian tile adhesive manufacturer Argatex.
Among its notable projects in the region, MC-Bauchemie provided concrete coatings and other products for the 2014 opening of the new Allianz Parque soccer stadium, used by the São Paulo team Palmeiras, hosting 44,000 spectators.
“We are pleased to have taken another step in our expansion in Latin America. We see great potential in the Bolivian construction sector, both in the industrial and infrastructure sectors as well as in the building construction sector,” said Pinto, in a company statement.
“We believe that the regional expertise we have acquired in recent years in the Brazilian and Chilean markets is a perfect fit for the requirements of the Bolivian market. Together with our local production, the proximity to our Brazilian plants will also play an important role in being able to offer our complete product range in Bolivia quickly,” Pinto said.
MC-Bauchemie Müller GmbH & Co. KG is an international producer of building chemical products and technologies with a workforce in excess of 2,500 employees and operations in more than 40 countries around the globe.
“We want to further expand our activities in these countries as part of our Vision 2030,” said Jaques Pinto, the company’s regional director for Latin America, in a company statement in April, at the time of the acquisition announcement.
Linox, which specializes in waterproofing coatings, has Bolivian operations in Cochabamba, La Paz, Oruro and Santa Cruz. MC-Bauchemie, a specialist in concrete coatings, has a wide portfolio of waterproof coatings and sealants.
Robust Growth Expected in Bolivia
Economic recovery in Bolivia has been strong this year, following the October election of Luis Arce as president. The International Monetary Fund in June predicted a 5% increase in the country’s gross domestic product (GDP) this year, compared with an 8.8% contraction in 2020. That GDP contraction was the first in Bolivia in 25 years.
The projected ranking of the fastest-growing economies in Latin America placed Bolivia at No. 10, according to the United Nation’s Economic Commission for Latin America and the Caribbean (ECLAC). Peru and Guyana are the only other countries in South America on the Top 10 list.
Internally, Bolivia’s General Index of Economic Activity (IGAE) showed 8.7% growth during the first half of 2021, within which the construction industry expanded by nearly 33%, according to a statement by Marcelo Montenegro, the minister of economy and public finance (Economía y Finanzas Públicas) to MercoPress in September.
As one of the fastest-growing segments of the Bolivian economy, the construction industry is poised for a 20.4% overall expansion in 2021, up from a decline of 27.3% last year, according to GlobalData.
Indeed, Bolivia is on the road to recover to the 2019 GDP high of over $40 billion, which dropped to less than $37 billion last year. This recovery, however, may be increasingly based on private sector initiatives than on government entity growth.
The IMF reckons that “There is scope to raise long-run growth by phasing out preferential allocation of bank credit to state-run enterprises, improving the business environment to incentivize private investment in the non-hydrocarbon economy, and strengthening governance of core economic and regulatory institutions.”
Among limits to growth is the campaign to vaccinate the population against COVID-19, which has affected 440,000 individuals and caused some 17,000 deaths. About 11% of the country’s 12 million inhabitants have received up to two doses of vaccine, Reuters reported.
The government plan to beat the pandemic was accelerated in July, including ongoing orders for 1 million vaccine doses every 10 days, including supplies from Russia’s Sputnik V, China’s Sinopharm and J&J’s Janssen, the agency reported.
Housing Shortage Measures
The national housing shortage in Bolivia, estimated to affect nearly one-third of the population, may improve under Arce’s so-called “leftist” government policies.
Habitat for Humanity calculated that more than 67% of the population now lives in urban areas, concentrated primarily in La Paz. The organization estimated that 80% of the population will be urban by 2030.
“According to the government, the housing deficit is 250,000 houses across the country and they have set the goal to build 25,000 houses per year, which means this need will be supplied in 10 years,” Habitat for Humanity reported.
The growing economy is based in part on a 16.7% rise in the rate of urban employment in the country, fostering stronger consumer demand for paints and coatings.
While housing investment should spur demand for architectural paints, infrastructure investment will raise the demand for industrial coatings.
The General State Budget for 2021, approved in December 2020, allocated about $4 billion for public investments, 36.2% of which was earmarked for infrastructure projects.
Infrastructure Projects Targeted
The government’s plan to fuel the recovering growth of the country is based largely on increased spending on infrastructure through both government and private sector investment.
Major infrastructure projects underway include work to complete the $447 million Mi Tren light rail system in Cochabamba and the plan for a new geothermal power plant at Laguna Colorada. These will be complemented by a host of local developments, thanks to a new $290 million trust — called FARIP — set up to fund local projects.
Among recent high-profile construction projects in Bolivia, a new home for the government’s Plurinational Legislative Assembly was inaugurated in La Paz in August. The monolithic cube-shaped building of 25 stories is earthquake-proof with five stories underground.
In another high-profile move, the Inter-American Development Bank loaned more than $10 million for the expansion of the Cretaceous Park of Sucre, a dinosaur theme park. The project is part of the effort to increase international tourism, supported by the Cultural Heritage Tourism Management Program, which is primarily funded by the National Fund for Regional Development (FNDR), within the Ministry of Development Planning. This program has targeted projects in Sucre, La Paz, Potosí and Santa Cruz.
MC-Bauchemie’s Continental Presence
Prior to the Linox acquisition in Bolivia, MC-Bauchemie made several acquisitions in Chile. The company purchased Chile’s Bautek in 2015, following the purchase of PK Chile in 2014. During the same period, MC-Bauchemie purchased Brazilian tile adhesive manufacturer Argatex.
Among its notable projects in the region, MC-Bauchemie provided concrete coatings and other products for the 2014 opening of the new Allianz Parque soccer stadium, used by the São Paulo team Palmeiras, hosting 44,000 spectators.
“We are pleased to have taken another step in our expansion in Latin America. We see great potential in the Bolivian construction sector, both in the industrial and infrastructure sectors as well as in the building construction sector,” said Pinto, in a company statement.
“We believe that the regional expertise we have acquired in recent years in the Brazilian and Chilean markets is a perfect fit for the requirements of the Bolivian market. Together with our local production, the proximity to our Brazilian plants will also play an important role in being able to offer our complete product range in Bolivia quickly,” Pinto said.
MC-Bauchemie Müller GmbH & Co. KG is an international producer of building chemical products and technologies with a workforce in excess of 2,500 employees and operations in more than 40 countries around the globe.