CONTAINERS AND PACKAGING

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1 CONTAINERS AND PACKAGING In the Colombian manufacturing industry, the plastics sector stands out as one of the most dynamic and with the largest potential to develop new or acquisitions. Li b reta d y r O d en

2 WHY COLOMBIA IS A STRATEGIC LOCATION IN THE AMERICAS FOR THE DEVELOPMENT OF PRODUCTION PROJECTS IN THE PLASTIC PACKAGING INDUSTRY: Plastic production in the country has surpassed one million tons annually, and has a very positive outlook for the coming years as the industries will continue to demand plastic materials such as containers and packaging, construction, agriculture and institutional. food industry (66%), followed by beverage containers (22%) and thirdly cosmetics and toiletries (9%). Colombia s plastic packaging market has reached the 29 billion units sold. By 2019 this market will surpass the 32 billion units sold. - ted in the Colombian market because they have demonstrated their ability to preserve the quality and durability of both food products and toiletries, replacing containers made of glass and metal. 22,466 PLASTIC PACKAGING SALES P (Million of units) 22,936 23,397 23,702 23,803 24,186 24,759 6,026 6,218 6,422 6,634 6,849 7,074 7, Rigid Plastic Packaging Flexible Plastic Packaging Source: Euromonitor International, Total Packaging demand Units 2014: 29,154 million

3 INVESTMENT OPPORTUNITIES Between 2003 and 2014 the production of processed foods increased by about 31%. It is estimated that the industry will continue to grow in the coming years. Between 2014 and 2018, food consumption is expected to grow 45.4% - ment and new projects in this industry, which in turn will demand inputs for plastic packaging along its supply chain. growth of 3.8% in the last 14 years. million and is expected to grow 9% in the coming years. US$ 7,000 In the last decade, exports of cosmetics and toiletries industry increased more than 7 times, from US $ 114 million in 2000 to USD $ 870 million in projects to supply the country with plastic packaging for the processed food industry and the cosmetic and toiletries industry, and take advantage of Colombia as an export platform to supply the Latin American markets as well. A Colombian woman spends $ 84 a year on cosmetics, which represents twice as much of what European women usually spend.

4 A REGIONAL MARKET WHICH CAN BE REACHED WITH ZERO TARIFFS FROM COLOMBIA Possibility to access an expanded market of more than 267 billion units, which is expected to continue growing at a CAGR of 2.5% towards Imports from Latin America and the Caribbean of containers and plastic packaging showed an annual compound growth rate of 5.5% between 2009 and 2014, reaching US $ 4,923 million, equivalent to 9.6% of total imports worldwide (US $ 51,190 million). Among the main importers of plastic containers are Mexico with 49%, Brazil with 11%, followed by Chile with 4.9%. Colombia accounts the 3.5% of total imports of plastic packaging to the region. Colombia has allowed preferential access granting 0% most major plastic packaging items to countries like the U.S., Brazil, Mexico, Peru, Ecuador and Chile. preferential access to a market of 1.5 billion consumers as a result of the 13 FTA s the export-oriented industry. Considerable cost savings can be achieved from Colombia in order to logistically supply other markets that have an important plastics industry such as Brazil, Ecuador, Peru and Chile, among others.

5 COMPETITIVE PRODUCTION COSTS AND EASY ACCESS TO RAW MATERIALS Wages in the industrial sector in Colombia are the second lowest in Latin America (IMD World Competitiveness Yearbook, 2015). Wages are 24% lower than the Latin American average and 71% lower than those on the continent. Colombia's gas cost for industry is 30% cheaper than Brazil, Ecuador and Chile. Colombia has more than 161,000 graduates linked to the plastic packaging Companies can acquire raw materials (plastic resins) at import prices approxi- Colombia has advantages in terms of price and transit times by sea, to supply major markets of South and North America, reaching ports such as Santos (Brazil) 63% faster and 39% cheaper than from Veracruz (Mexico).

6 OTHER FACTORS TO INVEST IN THE SECTOR Incentives such as Free Trade Zones, a Stimulus Plan for productivity and employment, and incentives for job creation that reduce production costs for companies present in Colombia and that serve the domestic market and export from Colombia. - mation of the plastics and rubber industry by improving its competitiveness through the development and optimization of processes and products.