Following the reactivation of China's economy in mid-2020, the Asian giant has monopolized a good part of the raw materials demanded by industry, a situation that is pushing up costs and generating uncertainty among Central American businessmen.
Due to the pandemic generated by the covid-19 outbreak, production in China was considerably interrupted during the first semester of 2020. But, after it reactivated its economic activity, the Asian country began to hoard raw materials that are used in the plastic industry.
Vacuum packaging, films for use in agricultural production and resin for mass consumption were some of the products that increased their sales in the Guatemalan market during the pandemic.
As a result of the pandemic that generated the spread of covid-19, during 2020 there were changes in consumption patterns, a phenomenon that forced the plastics industry to adapt to the new reality.
Although the sector keeps its operations alive thanks to the packaging they produce for the food and cleaning industry, there is uncertainty among entrepreneurs as the demand for bags, brushes, tableware, furniture and other products has contracted.
As a result of the home quarantines that were decreed in the countries of the region in March 2020 due to covid-19, the outlook for the plastics industry fluctuates between optimism and uncertainty in market behavior.
From January to April 2020, Central American companies imported $151 million in plastic and its manufactures from Mexico, and 60% of the total was purchased by companies in Guatemala and El Salvador.
Figures from Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
From January to April 2020, Central American companies imported $11 million in plastic pipe and fittings from Mexico, and 69% of the total was purchased by companies in Guatemala and Costa Rica.
Figures from Trade Intelligence Unit of CentralAmericaData: [GRAFICA caption="Click to interact with graphic"]
Basf de Costa Rica S.A., Sun Chemical S.A. and Ultra-Chem de Centroamérica S.A., are part of the companies participating in the nylon import business in Central America.
The market study "Nylon market study in Central America", prepared by the Trade Intelligence Unit of CentralAmericaData, details the main figures of the nylon import business.
In order to address the emergency declared by Tropical Storm Amanda, Salvadoran authorities authorized the reactivation of the operations of companies dedicated to the manufacture and distribution of plastic products.
The plastics industry was prohibited from operating, because with the outbreak of covid-19 the government of El Salvador decreed a strict home quarantine and decided to suspend the activities of these companies.
In the new commercial scenario generated by the covid-19 crisis, some Guatemalan companies in the plastics industry are manufacturing masks, face masks, gloves and special suits for medical use.
The activity of the sector has fallen considerably due to the restrictions imposed by the outbreak of covid-19, and it is estimated that in the country only 60% of companies engaged in the manufacture of plastic products are working.
In Central America, it is expected that the impact of the covid-19 crisis on the plastic product manufacturing business will be partly explained by the expected drop in sales of bottles and household products.
From January to September 2019, Central American companies imported from Mexico 125.6 metric tons of plastic and its manufactures, 14% more than reported in the same period in 2018.
Figures from the Trade Intelligence Unit at CentralAmericaData: [GRAFICA caption="Click to interact with graphics"]
In Guatemala, the government announced that in the next two years it plans to build a plastic waste recycling plant that would produce electricity, and the investment would be financed by donations.
The Ministry of Economy (Mineco) is focused on identifying within the metropolitan area which is the most suitable area for the installation of the plant and the plan is that it will start operating within two years.
Companies in the disposable plastic manufacturing sector have the capacity to replace all their production with environmentally friendly options, but the main obstacle is the limited capacity that customers must pay the surcharge for bioplastics.
In Costa Rica, some 31 companies indicated that they have the capacity to replace all their production with user-friendly options, the main limitations being the low capacity of customers to pay the surcharge for bioplastics and the restrictions on the functionality of the alternatives.
The Legislative Assembly approved the Law on Integral Waste Management and Promotion of Recycling, with the objective of achieving correct waste management in the country, through the separation of organic and inorganic waste.
From the statement of the Legislative Assembly of El Salvador:
In Costa Rica, the Assembly approved in second debate the bill that prohibits the delivery and sale of plastic straws and the purchase of single-use plastic in state institutions.
The initiative now only awaits the approval of the Executive Branch. The Legislative Plenary approved on October 31 in its second debate, file 20.985 Law to combat pollution by plastic to protect the environment, which among other things prohibits the marketing and free delivery of plastic straws for single use throughout the national territory, reported the Legislative Assembly.
The Legislative Assembly approved in the first debate the bill prohibiting the commercialization of plastic straws throughout the national territory, as well as the purchase of single-use plastic in all state institutions.
In addition, the marketing and free delivery of plastic bags to the final consumer in supermarkets and commercial establishments whose purpose is to carry the goods to their destination is prohibited, explains an official statement.
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