MEXICO CITY—Four themes will drive the Latin America polyurethane industry in the 2020s, according to Jan Buberl, vice president at Huntsman Polyurethanes.
Buberl, speaking at UTech Las Americas in Mexico City, added that innovation and consumer preferences will continue to drive demand. But, he said, the landscape is changing. The polyurethane processing industry is maturing, and consolidation in the sector will continue.
The first factor that is driving growth is the U.S. shale gas revolution. This has significantly reduced the cost of producing petrochemicals in the U.S. Gulf.
Industry forecasts suggest shale gas production will continue to increase until 2025. It is then likely to plateau, and stay consistent until around 2040, he said.
Although cheap natural gas implies cheap petrochemicals, Buberl warned that raw materials prices for benzene and toluene likely are to remain volatile.
To meet the continued growing demand, Buberl said that new investments in chlor-alkali, MDI and propylene oxide are planned for the U.S. Gulf Coast region. This is good news for the growing Latin American PU industry, but it will take time to hit full capacity.
The process from planning to commissioning for a new greenfield MDI plant can take seven years. The plant likely is to run at about 80 percent capacity for the first year of operation, Buberl added. It can take a further three years to tune operation to 100 percent of nameplate capacity, he said.
Downstream from the large materials makers, he said that innovation will drive growth, but consolidation will continue.
At the same time, digitalization will become increasingly important in the region. This is an opportunity for the polyurethane industries to cut costs, improve margins, and for the early adopters, capture market share, he said.