Brazil continues as Latin America’s plastics powerhouse
Plastics sector in Latin America constitutes roughly 4% of worldwide production.
LATIN America is a region with significant potential for the plastic manufacturing industry, with Brazil being the largest producer of plastics in the region. The region’s growth is attributed to increasing demand for plastic products in various sectors such as packaging, construction, and automotive.
And helping to ensure that Brazil continues as Latin America’s plastics powerhouse is the organisation, Think Plastic Brazil. Carlos Moreira, manager, of strategy and project planning at Think Plastic Brazil, confirms that the Brazilian plastics conversion industry comprises approximately 12 000 converters and is the seventh largest plastics consumer in the world.
The plastics sector in Latin America constituted roughly 4% of worldwide production in 2021 (latest figure available), contending with challenges to its competitiveness hinging on factors such as political and economic stability, enhanced infrastructure, competitiveness in raw materials, workforce training, and modernization of industrial equipment and procedures.
Moreira says that because of its robust domestic manufacturing industry, Brazil is poised to uphold its position as the primary plastics manufacturer in the region. The largest nation in Latin America anticipates a period of gradual economic expansion in the coming years.
With the new government assuming office in January 2023, it is anticipated that the implementation of growth-oriented strategies, including incentives for the industrial domain, will potentially result in heightened future expansion.
Making strides towards sustainability
On the environmental front, Brazil is a leader and has demonstrated resilience in the face of consumer and regulatory requisites. As was evidenced by many of the presentations at the World Plastic Connection Summit in Sao Paulo in August, numerous endeavours have been undertaken to enhance recycling percentages, promote circular practices, elevate the quality of recycled materials, and amplify the use of eco-friendly raw material sources.
Braskem, the foremost resin producer in the nation, is enlarging its output of renewable polyethylene derived from sugarcane by a significant 30%. Braskem is the only integrated first and second-generation petrochemical company for thermoplastic resins in Brazil. This is reflected in competitive advantages, such as the scale of production and operational efficiency. The first generation produces basic petrochemicals such as ethylene and propylene from naphtha, natural gas, and ethane.
Resin manufacturers have also displayed noteworthy involvement in advancing the post-consumer resin (PCR) domain. This progress has been achieved through collaborations with recycling firms and the acquisition of businesses specialising in recyclate production.
Smaller companies in the recycling business have also expanded their activity with the production of post-consumer recycled plastics reaching 0.88 million tons in 2020.
Of the 0.88 million tons of post-consumer recycled plastics, integrated recyclers (which have recycling and production of new products in the same company) convert about 30% of the volume with the remaining 70% passing through other steps in the conversion industry for the production of new parts.
Brazil’s overall recycling rate is approximately 4%, according to the latest figures available, but differs a lot from city to city. Brazil has no structured municipal recycling programmes, with only 6.4% of Brazilian municipalities offering official waste recycling programmes. More than 70% of Brazilians do not separate their recyclable materials and the recovery of recyclable material is largely left to waste pickers, who earn a living by collecting recyclables and selling them to private recycling companies.
During 2023, the recycling sector is expected to undergo accelerated growth, outpacing the broader plastics industry, driven by prevailing trends and prospects within this domain.
Braskem develops new recycling initiatives
Braskem sees great potential in plastics recycling. The company’s goals are to eliminate by 2030, 1.5 million tons of plastic waste that would have been sent for incineration, to landfills or discarded in the environment, and to expand its production and marketing of products with recycled content to 1 million tons by the same year.
To meet these goals, Braskem has revealed some important investments. One of these investments, of around BRL44 million (about US$8.9 million), was for the construction of the first advanced recycling plant in Brazil, in partnership with Valoren, a company that develops technology and manages solid waste for transforming it into recycled products. The unit will have the production capacity to produce 6 000 tons of recycled resins per year.
Valgroup develops recyclable packaging
Meanwhile, Nestlé recently launched Nescafé Dolce Gusto NEO, with Brazil being the first country to receive this innovation in which Valgroup will produce 100% of the compostable capsules in the sustainable Nescafé Dolce Gusto factory.
For the capsules to reach the consumer safely, Valgroup – one of the world’s largest producers, converters and recyclers of plastic packaging – has developed a mono-material ready-to-recycle packaging with a rigorous hermetic seal, which ensures a high barrier and safety for the product offered by Nestlé.
The project development took about three years and relied on the expertise of Valgroup, a global pioneer in the creation of packaging that is 100% recyclable and safe, in addition to the differentiated design that allows the package to be opened several times without breaking the barrier necessary to guarantee the shelf life of the product.
Valgroup has a strong ESG positioning, such as being ‘net zero’ by 2040, neutralising carbon emissions, and recycling the equivalent of 100% of the amount of packaging produced, effectively contributing to the circular economy by removing plastic waste from the environment.
The company has also invested in Deink Brasil, with the objective of including products, that today are still landfilled, into the mechanical recycling chain, thereby enlarging the circular economy by thousands of products.
Deink Brazil’s unique ink removal process, called deinking, allows the total removal of inks from printed plastic waste, whether from post-industrial or post-consumer origin. The technology used by Deink, already patented in 21 countries, results in materials with characteristics similar to those of virgin plastic.
Aside from contributing to the recycling of plastics, this technology uses the “closed circuit” system for water recovery, without the use of solvents or chemicals that can harm the environment.
“Currently, printed plastic packaging is not valuable in the market for being difficult to recycle. With Deink’s new technology, which cleans the ink from plastic packaging, it will be possible to add value to the material,” explains Valgroup’s director of institutional relations and compliance, Eduardo Berkovitz.
With a total production capacity of 800 000 tons of plastic packaging per year and a recycling capacity of 130 000 tons/year, Valgroup’s recycling capacity will initially increase by 4 000 tons per year with the de-inking process. The goal is to accelerate the construction of new Deink plants throughout Brazil, as well as to foster the development of new technologies.
The initiative will also provide extra income to waste collectors, who will have the option to receive printed plastic. It is estimated that printed plastic packaging will have a 50% increase in value. With 36 factories in five countries and more than 5 000 employees, Valgroup recycles 16% of everything it produces.
Currently, it recycles around 100 000 tons per year, the equivalent of 4.8 billion post-consumption PET bottles worldwide and 30 000 tons of polyethylene (flexible packaging).
Signatory to the Global Pact and the United Nations (UN) Plastic Pollution Treaty, Valgroup projects an increase in plastic material recycling to 25%, in relation to its produced volume, by 2025, and 50% by 2030, reaching 100% recycling in 2040.
Indorama Ventures almost triples its PET recycling capacity in Brazil
Indorama Ventures Public Company Limited, one of the world’s largest producers of recycled PET resin has completed the expansion of its recycling facility in Brazil.
The recycling facility, located in Juiz de Fora, Minas Gerais, Brazil, is increasing its production capacity from 9 000 tons to 25 000 tons per year of PET made from post-consumer recycled material. The project is part of Indorama Ventures’ Vision 2030 ambition to continue building a sustainable global company, including spending $1.5 billion to increase its recycling capacity to 50 billion PET bottles per year by 2025.
Indorama Ventures, the world’s largest provider of recycled PET resin used to make beverage bottles, invested US$20 million to optimise its Brazil facility’s processes and acquire new equipment such as washing machines to help remove labels, grind bottles in water and reduce water consumption by 70%.
National representation and support
The plastic processing and recycling industries have found national representation and support for more than five decades in the Brazilian Plastics Industry Association (ABIPLAST) since the sector began to develop in the country in 1967.
To maintain this strong representation, ABIPLAST relies on the joint and collaborative work of 21 state unions, which strengthen the sector regionally, and partner associations, which contribute to reiterating the importance of its industries.
For years, the concrete implementation of the circular economy in the production chain has been at the top of ABIPLAST’s priorities. Together with its associates, it works to develop actions that prepare the sector for the current reality, moving towards effective results.
Moreira said that the circular economy, conscious production, and consumption require new applications of plastic material, which should add greater value to processed products, leading to innovations in both raw materials and products as in technologies, processes, and business models.
He added that innovation, by the way, has been the beacon that guides the direction of ABIPLAST’s actions, with the objective of maintaining plastic products, including those that use recycled content, as the best solution for many human needs, integrating plastic material with new demands and market trends.
Primary sectors driving demand for plastic products in Brazil
According to the Brazilian Association of the Plastics Industry, the plastics conversion sector within Brazil achieved a total revenue of BRL128.6 billion (approximately US$23.7 billion) in 2021. The production output accounted for 7.1 million tons of plastic products in the same year, bouncing back to pre-pandemic levels, yet remaining below the average of 8.5 million tons recorded prior to the political turmoil that gripped the nation from 2015 and 2016.
Specifically, the persistence of an ongoing governmental social assistance initiative targeting families with limited income is projected to uphold a yearly growth rate of 2-3% in the flexible packaging domain throughout 2023, aligning with the level of activity observed in the food industry. Another favourable progression for the sector was the decrease in federal taxes on manufactured goods, contributing to the overall stability of the plastics industry’s performance during 2022.
During 2021, the nation imported 750 000 tons of plastic goods, of which 45.8% originated from China, 5.7% from the United States, and the rest from diverse international sources. On the export front, approximately 320 000 tons of processed plastic materials were shipped out in the same year, primarily to Argentina (23.8%), the US (13.6%), Paraguay (10.7%), and Chile (10.2%).
The primary sectors driving demand for plastic products in Brazil during 2021 included packaging (41%), construction (23.9%), and automotive (8.1%). Other noteworthy segments such as agriculture, furniture, disposables, and miscellaneous categories constituted the remaining proportion. As for manufacturing methods, the predominant conversion process in use within the industry is extrusion (film, sheet, profile, and blow moulding) at 52.1%, closely followed by injection molding at 45.8%.
Global promotion of the Brazilian converted plastics industry
In February this year the INP (Brazilian Plastics Institute) and ApexBrasil (Brazilian Trade and Investment Promotion Agency) renewed their cooperation agreement for the global promotion of the Brazilian converted plastics industry through Think Plastic Brazil.
In the last agreement, Think Plastic Brazil supported companies, of which 152 manufactured exports (data from 2021), which account for 30.28% of the industry’s export value (or US$425 million) and 57.47% of the exported weight considering the same product baskets.
Think Plastic Brazil is the official representative of the Brazilian converted plastics industry, and promotes these companies in the following markets: North America (Canada, United States of America, and Mexico), Central America (El Salvador, Guatemala, Panama, and Dominican Republic), South America (Argentina, Bolivia, Chile, Colombia, Ecuador, Peru, and Uruguay), Europe (Germany, Spain, and Portugal), Africa (South Africa, Angola, Ghana, Mozambique, Nigeria, and Kenya), and Asia (Hong Kong, Israel, and the United Arab Emirates).
There are currently 34 actions managed by Think Plastic Brazil to unfold its internationalisation strategy.