Colombia Petrochemicals Report 2009

Colombia Petrochemicals Report 2009

The future of the Colombian petrochemicals industry will be determined by access to feedstock, which is
set to rise significantly in the years ahead, according to BMI’s latest Colombia Petrochemicals Report.
Ongoing investments in new infrastructure, industrial re-conversion and automation are helping the
chemical and petrochemical processing industries maintain steady production levels, paving the way for
capacity expansion. Cartegena and Barrancabermeja, the two largest refineries, are both owned and
operated by Ecopetrol and are both undergoing significant expansion under the firm's guidance. Capacity
is forecast to reach 450,000b/d in 2011 and 500,000b/d by 2015, which will provide potential for naphtha
feedstock. Meanwhile, we are forecasting domestic gas production to reach 9.5bcm by 2013, providing a
significant source of ethane.
Ecopetrol’s complex in Barrancabermeja has nameplate capacity of 120,000tpa of ethylene, 60,000tpa of
LDPE and 140,000tpa of aromatics, including benzene, toluene, cyclohexane and orthoxylene. Propilco
owns all Colombia’s PP capacity, with two plants in Cartagena producing 200,000tpa and 205,000tpa
respectively. Petco, which was acquired by Mexichem in 2007, operates Colombia’s two PVC plants in
Cartagena with combined capacity of 390,000tpa. The country also hosts two PS plants in Cartagena with
American Styrenics operating a unit with capacity of 75,000tpa with Dexton providing a further
28,000tpa at its plant. Enka de Colombia also owns a PET plant in Girardota with capacity of 45,000tpa.
Vertical integration would also improve the possibilities of expansion. Ecopetrol’s acquisition of
Propilco, completed in April 2008, has significantly enhanced Ecopetrol’s involvement in the
petrochemical sector. The acquisition of Proplico will create synergies with Ecopetrol’s oil operations,
with the potential for further expansion. Propilco’s expansion programme has seen one of the company’s
two PP plants increase capacity from 180,000tpa to 205,000tpa in 2008, with a second expansion due to
be completed in Q2 2010. Capacity will be increased to 250,000tpa in this venture. An expansion
programme is under way at its other PP plant which will see capacity rise to 250,000tpa by Q109.
Ecopetrol intends to increase LDPE capacity to achieve national self-sufficiency in the product by 2012,
although it has not provided details on its plans. The Compania Promotora de Olefinas y Aromaticos
del Caribe has been charged with the goal of developing new facilities at Cartagena propylene, ethylene
and benzene. Completion is scheduled for 2013, but the project is still at a preliminary stage.
Colombia ranks eighth out of nine countries in BMI’s Americas Petrochemicals Business Environment
Rankings with 39.3 points, 8.2 points ahead of Peru and 3.2 points behind Chile. Colombia has yet to
leverage its full potential, but we expect further improvements to its score, particularly if the country’s
business environment improves.

Executive Summary ....5
Colombia Petrochemicals Industry SWOT Analysis ... 6
Colombia Political SWOT Analysis .... 6
Colombia Economic SWOT Analysis .. 7
Colombia Business Environment SWOT Analysis. 7
Global Market Overview....8
Global Ethylene Capacities .... 8
Table: World ethylene production by country, ‘000 tonnes capacity ... 8
Polypropylene..... 11
Market Overview..15
Table: Colombia Petrochemicals Facilities 2008 ..... 15
Regulatory Structure. 16
Ecopetrol 16
Industry Trends And Developments 18
Foreign Direct Investment .... 19
Business Environment ...21
Limits Of Potential Returns... 23
Risks To Realisation Of Returns . 23
Industry Forecast Scenario ...24
Table: Colombia Petrochemicals Industry – Historical Data and Forecasts. 25
Economic Outlook.....26
Table: Colombia - Economic Activity ..... 28
Company Monitor29
Empresa Colombiana de Petroleos (Ecopetrol).. 29
Petroquimica Colombiana (Petco).... 33
Dow Quimica de Colombia... 34
Polipropileno del Caribe (Propilco). 35
Country Snapshot: Colombia Demographic Data ..36
Section 1: Population 36
Table: Demographic Indicators, 2005-2030. 36
Table: Rural/Urban Breakdown, 2005-2030 37
Section 2: Education And Healthcare..... 37
Table: Education, 2002-2005 ..... 37
Table: Vital Statistics, 2005-2030..... 37
Section 3: Labour Market And Spending Power . 38
Table: Employment Indicators, 2001-2006... 38
Table: Consumer Expenditure, 2000-2012 (US$) ..... 39
Table: Average Annual Wages, 2000-2012... 39
BMI Forecast Modelling..40
How We Generate Our Industry Forecasts ... 40
Chemicals And Petrochemicals Industry 40
Cross Checks 41
Business Environment Ratings.... 42
Table: Petrochemicals Business Environment Indicators And Rationale. 42
Weighting 43
Table: Weighting Of Indicators .. 43