The Latin American PVC market First Brazilian PVC Congress Sao Paulo, June 7, 2005

The Latin American PVC marketThe Latin American PVC market

First Brazilian PVC Congress Sao Paulo, June 7, 2005

Outlook focused on

The Andean Countries Mexico, Chile Central America and

The Caribbean

Regional economic data

Outlook on PVC markets Challenges, opportunities

What we will see:

Latin American Economies by sizeUS$ Billions

Regional economic data

0 200 400 600 800

El SalvadorCosta Rica

Dom RepublicGuatemala

EcuadorPeruChile

ColombiaVenezuelaArgentina

BrazilMexico

Source: International Monetary Fund's World Economic Outlook

GDP per capita, 2004

Regional economic data

195320992145219023352349

34173543

39124148

43614524

58566506

0 2000 4000 6000 8000

MexicoChilePanamaCosta RicaVenezuelaArgentinaUruguayBrasilPeruEl SalvadorDom. RepublicEcuadorColombiaGuatemala

USD$

Source: International Monetary Fund's World Economic Outlook

GDP per cápita in Central America 2004

Regional economic data

0500

100015002000250030003500400045005000

2003

Nicaragua

Honduras

Guatemala

EL Salvador

Costa Rica

Panama

Source: International Monetary Fund's World Economic Outlook

Per capita GDP in the Caribbean 2003

(US $)

Regional economic data

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2003

Puerto Rico

R.Dominicana

Trinidad

Jamaica

Guyana

Haiti

US$

Source: International Monetary Fund's World Economic Outlook

Colombia

Population:45 millions

Per capita GDPUS$ 2.099

Regional economic data

Real GDPUS$ Bs 95.2

GDP Growth (%)

Source: International Monetary Fund's World Economic Outlook

Mexico

Population:105 millions

Per capita GDPUS$ 6502

Real GDPUS$ Bs 676,5

Regional economic data

GDP Growth (%)

Source: International Monetary Fund's World Economic Outlook

Venezuela

Population:24 millions

Per capita GDPUS$ 4148

Real GDPUS$ Bs 107,5

Regional economic data

GDP Growth (%)

Source: International Monetary Fund's World Economic Outlook

GDP Growth (%)

Regional economic data

-10

-5

0

5

10

15

20

2003 2004 2005 2006

Colombia

Venezuela

Mexico

Perú

Chile

LatinAmerica

Source: International Monetary Fund's World Economic Outlook

Contents

Regional economic trends

Outlook on PVC market

Challenges, opportunities

Production Capacitieskt / year

PVC

479

231140

128

140

240

210355

185150

280

360

MVC

EDC

Source: CMAI

BRAZIL

Solvay Indupa

Carbocloro

Braskem

442600

PequivenPetco

Policyd

Primex-Mexichem

268

Pemex

356

752

470

Total PVC production capacities ( 1.169 k t / year)

• Mexico: 53%• Colombia: 30%

0

100

200

300

400

500

600

700

1999 2000 2001 2002 2003 2004 2005

Colombia

Mexico

Venezuela

Source: CMAI,

Colombia´s Additional Emulsion PVCTotal Capacity, Jan 2006: 60.000 tons per year

C a p a c id a d d e p r o d u c c ió n d e P V C E m u ls ió n U .S .A Y L a t in o a m é r ic a

-

1 0 .0 0 0

2 0 .0 0 0

3 0 .0 0 0

4 0 .0 0 0

5 0 .0 0 0

6 0 .0 0 0

7 0 .0 0 0

8 0 .0 0 0

9 0 .0 0 0

TM

S

e p vc 8 0 0 0 0 6 0 0 0 0 2 0 0 0 0 3 0 0 0 0 2 0 0 0 0 3 0 0 0 0 3 0 0 0 0 1 3 0 0 0

P o lyo n e F o rm o s a C o lo r i te S o lva y B ra s k e m P e tc o P o li c yd P r im e x

PVC Internal Demand (kt / year)

• Venezuela´s production and consumption was dramatically impacted in 2003

0

50

100

150

200

250

300

350

400

1999 2000 2001 2002 2003 2004 2005

Colombia

Mexico

Venezuela

Sources: CMAI, and analysis by PETCO

0

20000

40000

60000

80000

100000

120000

140000

2001 2002 2003 2004

Colombia

Venezuela

Ecuador

Perú

Bolivia

Chile

PVC Demand Andean Countries and Chile

(Tons per year)

Sources: CMAI and analysis by PETCO

PVC Demand

Central America and the Caribbean

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

8 0

9 0

1 9 9 9 2 0 0 1 2 0 0 3 2 0 0 5

C o s t a R i c a

D o m i n i c a nR e p .

A l lC a r i b b e a n

C e n t r a lA m e r i c a

Sources: CMAI, and analysis PETCO

•

Plastics Consumption: PVC VS Others (Colombia, 000 metric tons per year)

Source: Acoplasticos

0

20

40

60

80

100

120

140

160

1999 2000 2001 2002 2003

PVC

PP

LDPE

HDPE

PS

PET

1,8

4,2

3,73,9

2,8

3,4

7,01

21,1

5,23

6,7

4,6

0,0 5,0 10,0 15,0 20,0

VenezuelaColombia

MexicoBrazil

ArgentinaLatin AmericaWest Europe

USAChina

Northest AsiaTotal World

PVC per cápita consumption, 2004Kg./Person

Sources: CMAI, and analysis PETCO

PVC per cápita consumption / each US$1,000 of GDP

2003

Sources: CMAI, and analysis PETCO

0,4

0,6

0,90,9

0,9

0,9

0,91,0

1,5

1,6

1,9

4,5

0,0 1,0 2,0 3,0 4,0 5,0

VenezuelaUSA

BoliviaLATAM

Promedio MundialChilePerú

CAN y ChileColombia

EcuadorEuropa

China

Millions TM: 30 5.5 6.2 1.5 0.13 0.33

PVC applications market share, 2003

Sources: CMAI, World Bank and analysis by PETCO

0%

20%

40%

60%

80%

100%

World W Europe USA China Colombia Mexico

Pipe&Fittings Profiles&Tubes Bottles Film&Sheet Cables All Others

PVC applications market share, 2003

0%

20%

40%

60%

80%

100%

USA LATAM AC and Chile China

Pipes Profiles Packing Cables Others

Sources: CMAI, World Bank and analysis by PETCO

Why the growing in “Other Aplications¨ has been limited”?

Little advantage of the existing opportunities to export manufactured vinyl products

Little exploration of the potential domestic markets for PVC products which have a long and succesful record in developed countries.

Challenges , opportunities

Free trade agreements lays the way towards a

market with great demand of manufactured

products

Latin American PVC products can accede

competitively to that market

Medical devices

Commercial opportunities

Synthetic leathers

Commercial opportunities

• Non slip rug pads• Multipurpose liners• Place mats

Commercial opportunities

Traffic Cones

Commercial opportunities

Commercial opportunities

Furniture

Commercial opportunities

Roofing titles

Commercial opportunities

Roofing membranes

Commercial opportunities

Flooring

Commercial opportunities

Profiles for windows and building

systems

Our challenges

To promote the regional internal markets development

To emulate the Chinese industry in its huge exports of PVC final products

To impulse innovation and design of new vinyl products

To reach a better understanding of vinyl applications and benefits

The Colombian Award for PVC Innovations