"There is currently so much instability in the supply chain that support from a strong distributer is more important than ever."

Rodrigo Gutierrez


September 28, 2021

Can you provide an overview of GTM’s footprint in Latin America and the company’s recent evolution?

GTM is 100% focused on Latin America and we split the region in two – Latin America North, including Peru, Ecuador, Colombia, Mexico and Central America; and Latin America South, including Chile, Argentina and Brazil. Approximately 95% of our work in Latam South is conducted in Brazil. The company has seen significant growth over the past few years. Despite the pandemic, 2020 was a great year, and 2021 has been even better, with the business benefitting from positive changes made the previous year. We still have many opportunities in the countries that we are currently present in and believe this offers the best avenue for further growth.

How have supply chain disruptions impacted the market demand for the chemicals GTM distributes?

Market demands can vary significantly, partly due to the pandemic and partly due to changes happening within a specific country. These changes create opportunities for the distributors that are properly prepared and have the right inventory at the right time. There is currently so much instability in the supply chain that support from a strong distributer is more important than ever, and smaller distributors are being pushed out as they do not have the financial or business capabilities to face the situation. Fortunately, GTM has been able to increase our relationships with customers during this time.

We have seen significant demand come from Brazil, Peru, Ecuador and Central America. Mexico has been a tougher market over the past year, but GTM is still seeing growth within the country. Due to political unrest, Colombia has been a challenging market in general, but for us, business has been quite good as we are fortunate to have the right infrastructure set up throughout the country. 2021 is on course to be the first year where GTM will have strongly exceeded its projections in all the countries we operate in.

What do you think is causing the increase in demand for products across the region?

Historically, Latin America has always had an issue with high interest rates, which created the scenario where people were putting their money in the bank rather than investing. As there are now substantial flows of money streaming in, net interest rates have decreased significantly, encouraging more spending and investment and creating more opportunities in Latin America. This has caused the market to invest in new equipment and infrastructure, which has increased the demand for chemical products substantially.

How is the company maintaining margins while logistics and freight costs have risen?

The availability and cost of containers has been a significant issue. To illustrate how challenging this situation has become, there were times where we had to pay US$12,000 to rent a container, making the container cost more than the product being delivered. Tensions between the US and China created a lack in freight consistency, and with increased demands to rebuild inventories there are not enough containers to supply to this demand. The manufacturing of containers is globally concentrated amongst approximately four companies, which cannot necessarily rapidly increase production capacity.

It has been challenging to maintain margins, but we are monitoring freight costs and availability daily. We have also improved our focus on supply and demand planning. Inventory was usually not an issue, but now we have to make very careful decisions when buying due to varying prices.

What are the reasons behind GTM growing its specialty chemicals business, and which sub-segments of this industry do you see as having high potential for growth?

The company has always been strong in paints and coatings and will continue to grow in this segment. We have started to see significant growth in the lubricants and additives market and expect this to continue as there is increased investment into new machinery and infrastructure, as well as new car sales. We have always had a strong position in the rubber market, but have been focusing more on bringing new specialty products to this segment, such as customized blends.

Farming in Latin America is booming and GTM is growing in the agribusiness, developing our own formulations and putting end-user products into the market. We are also improving our specialties capabilities in home and personal care, with our main focus being on Brazil, Colombia and Mexico. We aim to have a very broad portfolio, being an extremely strong player in five or six sectors and using these sectors to leverage our growth.


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