The Latin American Petrochemical and Chemical Association (APLA) is a non-profit organization founded in 1980 to represent more than 100 member companies in the petrochemical and chemical industry.
How did your background in food engineering, economics, and business lead you to your role at APLA?
I initially studied food engineering before earning an MBA at the Catholic University of Chile. My career began in CO2 production, where I became the general manager in Paraguay. After Praxair acquired the company, I led its Paraguayan operations and later served as healthcare director for Argentina, Chile, Bolivia, Paraguay, and Uruguay.
I was then promoted to general manager of Praxair Chile in 2001 and later returned to Argentina as president of its subsidiary until I retired in 2012. Post-retirement, I transitioned into academia and consulting, directing an MBA program and advising CEOs, particularly foreign executives. I also held leadership roles in industry organizations before being invited to lead APLA.
Latin America’s chemical sector is hugely diverse. Which regions stand out as having the most demand and why?
Brazil is the largest and most developed market, but it faces pressure from global oversupply and lower prices due to weakened Asian demand. Unlike natural gas-based producers, Brazil relies on naphtha, making it less competitive. To counter this, the industry is focusing on cost reductions and improved logistics and advocating for higher tariffs through ABIQUIM. Despite these challenges, Brazil remains the most attractive market for Asian producers, with nearly 200 million people and a strong industrial base.
Mexico, which is naphtha-based, and Argentina, which relies more on natural gas, have their own competitive factors. Each country must address challenges like feedstock supply and trade policies to maintain its position in the regional market.
What are some key sustainability and green energy initiatives in the Latin American chemical industry?
Sustainability efforts vary across the region. In Brazil, Braskem leads with bio-based plastics from sugarcane, while Unigel is leveraging wind energy for the energy transition. The industry is also advancing circular economy initiatives. In Colombia, Ecopetrol is pioneering Latin America’s first sustainable aviation fuel and leading carbon bond and decarbonization efforts. Argentina is exploring plastic recycling through pyrolysis and chemical recycling, though market conditions impact progress.
A major challenge remains waste management, which is also a social issue, as many rely on waste collection for their livelihoods. Key investments include Braskem Idesa’s new liquid terminal in Mexico for more efficient ethane imports and Ecopetrol’s sustainable aviation fuel expansion. Additionally, Argentina’s Vaca Muerta shale development and Brazil’s economic recovery are opening new opportunities.
How do you see the Vaca Muerta project transforming Argentina’s petrochemical industry?
Vaca Muerta has been a significant development over the past decade, and Argentina now benefits from its output. The completion of a major pipeline has made it possible to supply natural gas to central and northern Argentina, reducing the country’s need for LNG imports. There are over 100 projects in Vaca Muerta and lithium. Foreign investment is definitely present, but the specifics vary by project.
The government has introduced the RIGI program to incentivize further development. There are two major natural gas projects: one focused on liquefaction via ship storage and another led by YPF for an onshore plant. These will allow Argentina to export oil and natural gas, particularly to Brazil, either via pipeline through Bolivia or as LNG. Vaca Muerta is a game-changer for Argentina and the region, offering abundant petrochemical feedstocks like ethane, propane, and butane.
What role does nearshoring play in Latin America's chemical sector, particularly in Mexico?
Nearshoring is a growing opportunity, with Mexico being the main beneficiary. The country is attracting investments in personal care, pharmaceuticals, automotive, and other industries. However, it likely won’t absorb all the demand, leaving room for countries like Colombia, Brazil, and Argentina to benefit.
While Mexico is the primary hub due to its proximity to the U.S., South American countries also stand to gain from this trend. Automotive manufacturers, for example, are setting up plants not just in Mexico but also in Brazil. This regional shift in production could create new opportunities for Latin America beyond traditional sectors.
There’s a new administration now in the White House. How do U.S. tariff changes affect Latin America’s chemical sector?
It’s difficult to predict exactly how the U.S. trade policies will evolve, but they will undoubtedly impact Latin America. If the U.S. positions itself as a strong economic partner, it could be beneficial for the region. However, if protectionist policies intensify, it could create challenges.
Mexico is most directly affected by U.S. policies, given their deep trade relationship. The broader concern is whether new executive actions will influence regional supply chains. If tariffs increase, some Latin American countries may need to adjust their strategies, but in general, the region is well-positioned to adapt.
You’ve described Latin America as ‘resilient and adaptable’, but it also faces high inflation and perceived investment risks. How do you counter these objections?
While Latin America experiences economic volatility, multinational companies have consistently found strong returns over the decades. The region’s resilience means that even during downturns, growth opportunities remain, and when economic conditions improve, sectors like automotive and personal care see rapid increases in demand. Brazil, for example, has vast untapped potential, with its market expanding quickly when consumer purchasing power rises.
Key growth industries include agriculture, with a sustained demand for fertilizers like urea due to global food production needs. Lithium, particularly in Chile, Argentina, and Bolivia, is another promising sector, with new direct extraction technologies poised to transform production. Methanol, especially for marine fuel, also presents a significant opportunity. Many companies are mitigating risk through joint ventures, particularly in lithium, oil, and gas, reinforcing confidence in the region’s long-term potential.
