Brazil's civil construction sector consumed 67.6% of all PVC resin produced in the country last year compared to 64.9% in 2006 and 63.5% in 2005, according to the Brazilian PVC institute.
The rate is expected to increase over the next few years as the sector has demonstrated particularly fast growth since 2005, PVC institute executive director Miguel Bahiense Neto told BNamericas.
A study carried out by the institute revealed domestic demand for PVC used in civil construction could rise at an annual rate of 7.5- 9% through 2015.
"The crisis could change the scenario and we are uncertain what impact it will have on the sector," Bahiense said, adding that "the government has taken steps to minimize the negative effects on the Brazilian economy in general."
According to the executive, announced investments in capacity expansions, including those by Brazilian petrochemical company Braskem (NYSE: BAK) and Belgian chemical group Solvay, are enough to supply the growing demand in the country.
A few years ago there was particular concern over a possible resin deficit if investments in production were not forthcoming. "The announced expansions will cover fully demand," Bahiense said.
In addition, the civil construction sector will be able to count on the new PVC derived from renewable sources. "It is the same product, only based on a different type of raw material. The concept of sustainable development made companies invest in such solutions," the executive explained.
Solvay Indupa, a subsidiary of the Belgium group, for example, is carrying out an expansion at its Santo André plant in São Paulo state, which is expected to be concluded in the second half of 2010, increasing PVC output by 55,000t/y to 330,000t/y.
The company is also building a 60,000t/y ethylene plant in Brazil using sugarcane-based biofuel as feedstock, which will be fed into the firm's PVC production chain.
Brazil's domestic PVC industry produced 365,000t in the first half of 2008, up 9% compared to the same period last year, while apparent consumption rose from 390,000t to 548,000t in the period, up 40% year-on-year.
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