Brazilian composites economy showing signs of volatility

ALMACO says cuts and delays in Brazilian government funding transfers caused composites industry sales in first quarter 2015 to drop 15% compared to 2014.

The Latin American Composite Materials Assn. (ALMACO) reported on May 13 that sales in the Brazilian composites industry totaled US$240 million in the first quarter of 2015, which is equivalent to a 15% drop compared to the same period of the previous year. Compared to the last three months of 2014, the drop was 14.4%. In terms of volume of composites processed, the declines were even more pronounced: 18.2% and 16.2%, respectively, totaling 44,000 tons.

According to Gilmar Lima, president of ALMACO, in addition to the current economic scenario faced in Brazil, the main factors responsible for decreases are the cuts and delays in government funding transfers to social programs. “The uncertainties and lack of confidence further aggravates the crisis. On the other hand, there is a conformity in the composites industry, illustrated by the lack of reaction and creativity,” he says.

For the second quarter, however, Maxiquim’s survey indicates 8.1% sales increase, totaling US$ 260 million, in volume of processed material, jumping 7.4%, reaching 47,000 tons.

“Some segments remain stable, such as the water tank and wind segments," Lima says. "It is a moment of calm, but also a period to seek new niches and opportunities that will emerge in this period of instability. Knowledge, staff training, differentiated business models, innovation and speed in the development of solutions, including products with the use of waste, will be crucial to overcome this crisis.” He also noted that, despite the difficulties, it is necessary to invest a little more to strengthen the brands, in training and retention of talents. “We need to rethink our organizations, but we have to do it strategically and intelligently.”

Also according to Maxiquim’s survey, the Brazilian composite materials industry should close 2015 accounting for a turnover of US$ 1.021 billion, or 5.6% less than last year. In terms of volume, it will correspond to a 7.1% decline (totaling 191,000 tons).