International Coatings Scene
LATIN AMERICA
BY CHARLES W. THURSTON
LATIN AMERICAN CORRESPONDENT
THURSTONCW@RODPUB.COM
Argentine paint recovery pinned
to consumers
Government
programs
could boost
construction,
and paint
demand.
Argentina, like the U.S., is seeking to bolster its economy through renewed lending to consumers, and through expanded
infrastructure projects, which will create new
jobs. If new government programs succeed, the
architectural segment of the paint and coatings
market should revive first—thanks to both
remodeling and new construction—with the
industrial segment following.
“The construction sector is growing, although
the economy is suffering the same way as in other
countries,” said Carolina Cappelloni, a spokesper-son at BASF Argentina, in Buenos Aires.
Consumption of paint and coatings for construction in January was up 7.3% by volume,
compared with a year earlier, according to government INDEC statistics cited by Business
Trends, in March. The same report indicated
that construction under permit had increased
by approximately 45% by square footage in
January, compared to the year-earlier figure.
This increase should be further affected by a
new government lending line for home repair
announced in March by President Cristina
Fernández de Kirchner, pegged at 13% interest
for 20 months. Home repair is calculated to represent approximately 20% of the nation’s total
construction sector activity. With a population
of approximately 825 million and a gross
domestic product (GDP) of approximately $265
billion, Argentina is one of the most important
economies in Latin America.
To better target environmentally conscious
consumers, BASF introduced its low-VOC
water-based Acronal Eco line in 2008. Among
other leading paint companies in Argentina,
Alba Fabrica de Pinturas, Esmaltes y Barnices
S.A., based in Garin, also launched a water-based enamel line in 2008, Alba Dulux. Alba
was acquired by AkzoNobel in January 2008.
Another leading Argentine paint manufacturer expanding sales is Sinteplast, which increased
its production capacity at a new plant in Ezeiza
in late 2007 to 80 million liters, estimating its
market share at 20%, which suggests a total
Argentine decorative paint market of approximately 400 million liters. Among marketing campaigns, Sinteplast has sponsored sporting events
like the Davis Cup in soccer, which was played
against Great Britain in Buenos Aires last year.
Industrial paint and coatings consumption
also should increase following the government’s
announcement of a $22 billion infrastructure
investment program, which was projected to add
over 400,000 new construction jobs through 2010.
Major infrastructure projects planned by the
government include: a $3.8 billion high-speed
rail network between Buenos Aires, Rosario
and Cordoba; a $365 million gas pipeline project; and a $105 million upgrade of the Exolgan
container facility—the country’s second largest
operator in Buenos Aires, as part of a $450 million port improvement.
Sales of OEM automotive paints are expected to continue to fall, while after-market paints
could rise with consumer spending. Automobile
sales in Argentina were down 16% to 37,000
vehicles, according to the national car dealership association Acara. Production was down
even more in February at 55.7%, according to
figures citing the Argentine automobile manufacturers association Adefa.
While the Argentine economy expanded by
6.24% in 2008, it is expected to grow by a
mere 0.47% this year, then recover growth
rate to 2.2% in 2010, according to a recent
bank projection consensus calculated by
LatinFocus. GDP growth in Argentina is projected by the World Bank to average five percent over the 2007-2011 period, with per capita GDP growth trailing at four percent; per
capita income stood at $6,636 in 2007. At the
same time, inflation is expected to slow this
year to 8.13% from 8.48% last year, then warm
to 9.1% in 2010, according to the same
LatinFocus report. CW
