In August 2018, shortly after assuming the presidential mandate, Iván Duque participated in a gathering of the National Association of Entrepreneurs (ANDI) in Cartagena, alongside private sector leaders. The positive atmosphere of the meeting resulted in an implicit agreement that both the public and private sectors should collaborate to enhance Colombia’s economic growth rates, which had been disappointing in the preceding two years. With a GDP growth of only 1.8% in 2017, the objective is to achieve an annual growth rate of 4%.

Colombia, as Latin America’s fourth-largest economy with a GDP worth US$309.2 billion (IMF, 2017 data), faces the opportunity to continue promoting the expansion of its middle class. However, its GDP per capita in US dollar terms, currently standing at US$6,273, remains lower than that of Argentina, Brazil, Chile, and even Peru. This indicates significant potential for further growth and increased demand for chemicals and plastic products.

Rina Quijada, Vice President of Latin America at IHS Markit, expressed her optimism about the industry’s future, attributing it to the favorable impact of the recent election results. She also anticipated an increase in Ecopetrol’s exploration and production (E&P) activities. Quijada emphasized that as long as there is economic growth, the demand for petrochemical products will continue to grow. To achieve this, President Iván Duque must prioritize generating political and economic stability, which will, in turn, support the development of the industry.

Duque’s administration aims to simplify the tax framework to facilitate business activities for owners and entrepreneurs within the formal economy. Already, this optimism is translating into increased levels of trade and investment, according to Daniel Mitchell, President of the industry association Acoplásticos. Mitchell noted that while 2017 experienced stagnant consumption growth, this year has seen positive recovery rates starting from the second quarter. Furthermore, Mitchell highlighted that Duque’s policies align with improving competitiveness, leading companies to invest in expanding their capacity across the value chain.

Mitchell provided insightful figures that demonstrate the untapped potential for growth in Colombia’s petrochemical products market. Currently, Colombia consumes 28 kg of plastics per person per year, compared to 35 kg in Brazil, 43 kg in Mexico, 45 kg in Argentina, 50 kg in Chile, and a significant 150 kg in the United States.

Acoplasticos identifies several key players in Colombia’s petrochemical industry. Essentia (formerly Propilco) boasts an installed capacity of 500,000 tonnes per year (mt/y) of polypropylene. Mexichem produces approximately 482,000 mt/y of PVC, while Americas Styrenics (AmSty) and Ajover Group jointly possess a capacity of 110,000 mt/y in polystyrene. Additionally, Ecopetrol produces around 66,000 mt/y of low-density polyethylene. The country also possesses a capacity of approximately 60,000 mt/y in recycled PET and 60,000 mt/y in unsaturated polystyrene resins.

With a population of 49.3 million, abundant oil and gas resources, and a market-friendly administration, Colombia emerges as a market to closely monitor in the immediate future. The potential for growth, particularly in the petrochemical industry, presents exciting prospects for both the economy and the country’s development.