"In 2019 the chemical industry outperformed GDP growth by 2.5%. Beyond the situation with methanol production, which has been very dependent on natural gas imports from Argentina, the chemical industry in Chile has been performing at healthy levels."
How have Oxiquim’s main business areas responded to the challenges of COVID-19?
We have three main business areas: first, we manufacture resins for wood panels. We then have a business line of chemical distribution, where we source from global and local producers and we provide to the wider national industry. Finally, the third business line is our marine terminals for bulk liquids, with facilities in northern, central and southern Chile. The pandemic has created significant challenges to logistic movements but we have been able to operate fairly normally by adapting the operational standards to assure health and safety and business continuity. For Oxiquim it has been fabrication and distribution that have been most affected by the pandemic. Demand has contracted in some sectors, notably construction, although the impact has not been so severe. We also provide to the pulp and paper, food, water treatment and mining industries, among others, so we have a very diversified client portfolio.
How are you investing in growing the marine terminals business?
This is the area where we see bigger growth opportunities. We initially invested on this front to assure the supply of raw materials for our own operations, after which we started serving third parties. We are now building an LPG terminal in Mejillones, which should start operation in January 2021. We also have other projects for improvements and expansions in our Quintero terminal as well.
Chile imports a lot of raw materials, but as the storage capacity increases, there are opportunities to serve the export markets as well. The challenge we have had is that Chile, although it has a very long coast, offers very few natural bays where you can buy these terminals. So, there is a lot of industrial activity concentrated in these locations, and this creates a lot of social pressure. For this reason, we have incorporated cutting-edge technology to control our emissions and make sure the product is always contained. The biggest challenge is the permits to build these facilities. They can take up to four or five years, while the markets change much more rapidly.
Can you develop on Oxiquim’s R&D and technology capabilities?
We have technologies to produce resins for wood panels with very low formaldehyde emissions. Our technology is leader in low use of adhesive per cubic meter of panel, and this technological advantage places us in a good position to potentially invest in production facilities abroad.
In our logistics business, we have innovated increasing safety, with submarine breakaway valves with a system to empty the lines in case of activation of the valves, allowing the use in lines with products that can solidify at sea temperature.
Moreover, in our LPG terminal we introduced a technology to heat up the gas using air before dispatch. This has worked very well and presents less environmental impact than other technologies. Finally, in mining we are introducing a new family of products based in unconventional principles to improve copper recovery in flotation processes used in Chile and Peru.
As president of Asiquim, could you provide a general picture of how Chile’s chemical industry is performing with the pandemic?
In 2019 the chemical industry outperformed GDP growth by 2.5%. Beyond the situation with methanol production, which has been very dependent on natural gas imports from Argentina, the chemical industry has been performing at healthy levels. In terms of the pandemic, at Asiquim we did a survey in June 2020 and, overall, the chemical industry has continued to operate at pretty much normal rates. This said, I think we will see demand contract as a result of the financial crisis caused by COVID-19. Also, in Chile we have a delicate social situation since last year, so the job losses of the pandemic may increase social unrest.
Oxiquim celebrates 70 years in 2020. Would you like to add a final message to our readers and APLA members?
Over the last 70 years, Chile has gone through deep changes, has transitioned from being a protectionist economy to a very open economy. We have gone through periods of unfavorable political climate to private investment in the 70s to a long period since the 80s of more stable regulations and stronger institutions allowing the development of the country based mainly on private investment.
The company has proven to be very resilient to adapt to the different changes. As a final message, I would like to insist on the need to recover political leaderships, so the population trusts its leaders again, rather than follow the shouting in social media. We need a rational social dialogue. Also, I would like to send a message of optimism concerning the pandemic, as we have all proved that we can work very well in totally different ways than before.