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Released April 10, 2020 | SUGAR LAND
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Power
Since private power projects are allowed to continue in the region, there has been partial reactivation of construction activities on renewable energy projects that had been halted after March 20. However, restrictions on workers' transportation and accommodation, and other logistic difficulties will slow the pace of the reactivation.
Pharmaceutical-Biotech
Most Latin American Pharma-Bio plants remain operational; however, capital and maintenance projects in general are being postponed until at least the second quarter of the year or even farther out. Other companies that are even more essential to help fight the COVID-19 pandemic continue increasing the production of antibacterial and protection products.
Brazilian company Magnamed is preparing to increase the production of respirators in the coming months. It expects to start the production of a new type of respirator, but this will take longer than expected as all efforts are focused on the production of the existing technology.
Food & Beverages/Pulp & Paper
Due to the COVID-19 outbreak, the Food & Beverage Industry has experienced substantial domestic demand due to the quarantine measures in place in Latin America. This week, one of the largest companies in the meat processing sector, JBS, has opened 3,000 new job positions in Brazil.
However, agribusiness, the most important sector for regional economies, has witnessed an incredible drop since all international trade has practically ceased. This will have a drastic effect on this year's economic projections.
The same is occurring in the Pulp & Paper Industry, where the paperboard and carton board packaging and tissue products sectors are operating at installed capacities to meet market demands. The ones that have implemented 4.0 technologies are facing fewer challenges while having reduced numbers of staff on site, since they have remote access to production line information in real time.
Industrial Manufacturing
Industrial Info's database shows 92 automotive plants that have suspended production since March 23 due to the COVID-19 pandemic.
Click on the image at right to see shuttered auto plants by Latin American country.
Mexico
Mexico's auto production decreased 24.6% in March: OEMs built 261,805 light vehicles in March, resulting in a 24.6% decrease compared to the 347,391 units built in the same month of 2019, according to the National Institute of Statistics and Geography. This represents the largest decrease in vehicle production in 11 years.
While sugarcane-based ethanol production in Brazil continues, the long lasting effects of the COVID-19 pandemic have started to become apparent. The largest concern of the sector at the moment is the reduction in ethanol sales, a consequence of the quarantine period to prevent the spread of the coronavirus. According to the technical director of União da Indústria de Cana-de-açúcar (Unica), as the 2020-21 sugarcane harvest season commences, ethanol prices are almost as low as production costs, and as there is no demand, there is no sales. Such analysis has led to an indication that the more profound effects of the crisis will come to light by the end of April. In the meantime, several companies are shifting their focus onto sugar production in order to compensate for the deficit in the ethanol market. While during the 2019-20 sugarcane harvest season the production mix was on average 35% sugar and 65% ethanol, it has been established that as a result of the pandemic, sugar production this year could equate to 45% of overall production at sugarcane-based ethanol plants.
In Argentina, Cámara de Bioetanol de Maíz has warned the crisis caused by a fall in demand for naphtha could lead to a total or partial closure of its plants in the provinces of Córdoba (Alejandro Roca, Villa María and Río Cuarto), Santa Fe (Avellaneda) and San Luis (Villa Mercedes). Furthermore, certain corn-based ethanol plants in the province of Córdoba have already undertaken measures to counter the crisis: ACA Bio (Villa María) is the first to take the decision to cease production as of April 8 and could extend the measure for 10 days, by which time the company hopes that demand will become more dynamic and they will be able to begin emptying the storage tanks that are full. Days ago, and as part of the strategy to generate new business, the company exported 8 million liters of renewable fuel to Brazil.
Bio 4 (Río Cuarto) for now plans to work normally for the next 15 days, until its storage capacity is full. "Later, we will see what happens," the company said.
Promaíz (Alejandro Roca) also still has storage capacity in the tanks, allowing production to continue.
Metals and Minerals
Mexico: Mining companies have suspended activities and placed the main equipment under care and maintenance. Field work and explorations activities have been halted due to the COVID-19 pandemic.
The cement industry and steel industry were classified as non-essential when the lockdown was announced. This week the government changed this decision, and the cement and steel sectors have been declared as essential. It will depend on the companies if they suspend activities or not.
Peru: Some mining companies have stopped operations, and others are working at a minimal capacity rate. Due to the lockdown, the supply chain for the mining sector has been affected and mines are not receiving all the supplies they need, which is affecting operations.
Argentina: Although mining activity is currently an authorized activity, mining companies are keeping operations suspended in order to fight the spread of COVID-19.
Chile: The mining sector in Chile will be heavily impacted due to the reduction of copper production. Codelco is suspending third-party contracts, impacting the mine supply chain. Important projects are being delayed and could be placed on standby due to economic impact.
Refining
Industrial Info is currently tracking a total of 2,272,708 barrels per day (BBL/d) of crude processing capacity offline in Latin America.
Click on the image at right for a breakdown of offline capacity by country.
Ecuador: La Libertad (45,400 BBL/d): EP Petroecuador shut down the facility on April 4. It is estimate it will be offline for two weeks. Esmeraldas (110,000 BBL/d): EP Petroecuador continues to process at lower rates due to COVID-19 concerns. The company has reduced an additional 10% from the already depressed rate levels and is currently processing at 60% of total capacity. It is expected that the facility will keep those rates until late April or even further according to new measures the government might take.
Martinique: Antilles (16,000 BBL/d): SARA, a Rubis and Sol Group joint venture, on April 4 began the shutdown process to perform a 70-day major plant wide maintenance turnaround and to cope with reduced product demand due to COVID-19 pandemic concerns.
Jamaica: Kingston (35,000 BBL/d): Petroleum Corporation of Jamaica has reduced production by approximately 30%. Refinery authorities will be evaluating that rate and may have to lower it to 50% if demand for products continues to drop.
Mexico:
Brazil:Recap (53,000 BBL/d): Petrobras has reduced rates by 40% since March 30 as a result of low fuel demand. The refinery had been processing at 85% since early this year due to company market strategy.
REPLAN (415,000 BBL/d): Petrobras has completed a major maintenance turnaround on the 207,500-BBL/d Crude U200A, and it was kept offline due to COVID-19 pandemic and fuel demand reduction. Furthermore, the 207,500-BBL/d Topping 1 (U-200) is currently processing at lower capacity, 60%, for the same reasons.
Oil & Gas
Emerging economies such as Peru, Bolivia, Brazil and Argentina are being forced to postpone their investments until the situation is more certain and clear. Given the current outlook and the drop in oil prices, many companies have already taken measures regarding their projects, reducing capex and investments scheduled for this year in order to improve their financial balances. Industrial Info has identified 80 projects delayed, worth $10.20 billion.
Click on the image at right for delayed Oil & Gas project by country.
Brazil, Colombia and Argentina are expected to be the first countries to recover from the current crisis due to their previous investments in infrastructure. Petrobras decided to decrease its national production by 200,000 BBL/d to contribute to OPEP's request. Meanwhile, the Mexican state oil company Pemex stated that the country will seek to double its production during 2020, continuing with its exploration and development projects in priority fields.
Within the market, the best outlook is seen within the upstream sector. The big players are prioritizing investments in reducing production costs per field, increasing crude oil and natural gas production levels, and improving the efficiency of production facilities as strategies to deal with falling prices. Industrial Info is tracking $11.63 billion of investment that continues to be active and moving forward despite of current market conditions.
Chemical Processing
Trinidad and Tobago: Methanol Methanol Holdings has delayed to the second half of 2020 its 25-day planned maintenance turnaround at its 540,000-metric-ton-per-year Methanol II unit at its Point Lisas methanol plant in Couva, Victoria, as well as all its capital investments.
Brazil: Proquigel Quimica is maintaining fully operations its site in Bahica, which includes a 25,000-metric-ton-per-year methyl methacrylate unit; a 287,000- metric-ton-per-year ammonium sulfate unit; a 10,000-metric-ton-per-year ethyl methacrylate unit; and acrylates and sodium cyanide units. Mexico: Oxiteno is operating at normal rates its Surfactants plant located in Veracruz State, although only essential personnel necessary for operations are working on site.
Bolivia: Praxair's industrial gases in Santa Cruz continues operating at normal rates and has not been impacted by the COVID-19 pandemic.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Since private power projects are allowed to continue in the region, there has been partial reactivation of construction activities on renewable energy projects that had been halted after March 20. However, restrictions on workers' transportation and accommodation, and other logistic difficulties will slow the pace of the reactivation.
Pharmaceutical-Biotech
Most Latin American Pharma-Bio plants remain operational; however, capital and maintenance projects in general are being postponed until at least the second quarter of the year or even farther out. Other companies that are even more essential to help fight the COVID-19 pandemic continue increasing the production of antibacterial and protection products.
Brazilian company Magnamed is preparing to increase the production of respirators in the coming months. It expects to start the production of a new type of respirator, but this will take longer than expected as all efforts are focused on the production of the existing technology.
Food & Beverages/Pulp & Paper
Due to the COVID-19 outbreak, the Food & Beverage Industry has experienced substantial domestic demand due to the quarantine measures in place in Latin America. This week, one of the largest companies in the meat processing sector, JBS, has opened 3,000 new job positions in Brazil.
However, agribusiness, the most important sector for regional economies, has witnessed an incredible drop since all international trade has practically ceased. This will have a drastic effect on this year's economic projections.
The same is occurring in the Pulp & Paper Industry, where the paperboard and carton board packaging and tissue products sectors are operating at installed capacities to meet market demands. The ones that have implemented 4.0 technologies are facing fewer challenges while having reduced numbers of staff on site, since they have remote access to production line information in real time.
Industrial Manufacturing
Industrial Info's database shows 92 automotive plants that have suspended production since March 23 due to the COVID-19 pandemic.
Click on the image at right to see shuttered auto plants by Latin American country.Mexico
Mexico's auto production decreased 24.6% in March: OEMs built 261,805 light vehicles in March, resulting in a 24.6% decrease compared to the 347,391 units built in the same month of 2019, according to the National Institute of Statistics and Geography. This represents the largest decrease in vehicle production in 11 years.
- Kia will halt operations at its plant in Pesqueria on April 6, with a reopening date still undetermined.
- Volkswagen has extended work stoppages at plants in Puebla, Silao until April 30.
- Navistar has pushed plant restart in Escobedo to April 13.
- Auto parts company Nemak has implemented measures aimed at optimizing costs, expenses and cash flow to deal with the suspension of automakers, which includes the delay of non-essential investments, the implementation of flexible production schemes and the temporary stoppage of activities in some of its production plants. The scope and duration of the above-mentioned measures continue to be subject to permanent monitoring of conditions in the markets where it operates.
- Toyota has extended production suspension at all plants in Mexico until May 1.
- Mercedes-Benz has extended all plants closures in Brazil until May 4.
- Toyota do Brazil has extended all plant closure until April 21.
- Ford is producing face shields at its facilities in Camaçari, Brazil, and Pacheco, Argentina, to equip health professionals.
- Argentine vehicle production decreased in 34.4% according to Argentina's Association of Automobile Manufacturers (ADEFA).
- Automakers are opening their production lines to support the manufacture of respirators, including the supply of components and spare parts to increase production capacity.
While sugarcane-based ethanol production in Brazil continues, the long lasting effects of the COVID-19 pandemic have started to become apparent. The largest concern of the sector at the moment is the reduction in ethanol sales, a consequence of the quarantine period to prevent the spread of the coronavirus. According to the technical director of União da Indústria de Cana-de-açúcar (Unica), as the 2020-21 sugarcane harvest season commences, ethanol prices are almost as low as production costs, and as there is no demand, there is no sales. Such analysis has led to an indication that the more profound effects of the crisis will come to light by the end of April. In the meantime, several companies are shifting their focus onto sugar production in order to compensate for the deficit in the ethanol market. While during the 2019-20 sugarcane harvest season the production mix was on average 35% sugar and 65% ethanol, it has been established that as a result of the pandemic, sugar production this year could equate to 45% of overall production at sugarcane-based ethanol plants.
In Argentina, Cámara de Bioetanol de Maíz has warned the crisis caused by a fall in demand for naphtha could lead to a total or partial closure of its plants in the provinces of Córdoba (Alejandro Roca, Villa María and Río Cuarto), Santa Fe (Avellaneda) and San Luis (Villa Mercedes). Furthermore, certain corn-based ethanol plants in the province of Córdoba have already undertaken measures to counter the crisis: ACA Bio (Villa María) is the first to take the decision to cease production as of April 8 and could extend the measure for 10 days, by which time the company hopes that demand will become more dynamic and they will be able to begin emptying the storage tanks that are full. Days ago, and as part of the strategy to generate new business, the company exported 8 million liters of renewable fuel to Brazil.
Bio 4 (Río Cuarto) for now plans to work normally for the next 15 days, until its storage capacity is full. "Later, we will see what happens," the company said.
Promaíz (Alejandro Roca) also still has storage capacity in the tanks, allowing production to continue.
Metals and Minerals
Mexico: Mining companies have suspended activities and placed the main equipment under care and maintenance. Field work and explorations activities have been halted due to the COVID-19 pandemic.
The cement industry and steel industry were classified as non-essential when the lockdown was announced. This week the government changed this decision, and the cement and steel sectors have been declared as essential. It will depend on the companies if they suspend activities or not.
Peru: Some mining companies have stopped operations, and others are working at a minimal capacity rate. Due to the lockdown, the supply chain for the mining sector has been affected and mines are not receiving all the supplies they need, which is affecting operations.
Argentina: Although mining activity is currently an authorized activity, mining companies are keeping operations suspended in order to fight the spread of COVID-19.
Chile: The mining sector in Chile will be heavily impacted due to the reduction of copper production. Codelco is suspending third-party contracts, impacting the mine supply chain. Important projects are being delayed and could be placed on standby due to economic impact.
Refining
Industrial Info is currently tracking a total of 2,272,708 barrels per day (BBL/d) of crude processing capacity offline in Latin America.
Click on the image at right for a breakdown of offline capacity by country.Ecuador: La Libertad (45,400 BBL/d): EP Petroecuador shut down the facility on April 4. It is estimate it will be offline for two weeks. Esmeraldas (110,000 BBL/d): EP Petroecuador continues to process at lower rates due to COVID-19 concerns. The company has reduced an additional 10% from the already depressed rate levels and is currently processing at 60% of total capacity. It is expected that the facility will keep those rates until late April or even further according to new measures the government might take.
Martinique: Antilles (16,000 BBL/d): SARA, a Rubis and Sol Group joint venture, on April 4 began the shutdown process to perform a 70-day major plant wide maintenance turnaround and to cope with reduced product demand due to COVID-19 pandemic concerns.
Jamaica: Kingston (35,000 BBL/d): Petroleum Corporation of Jamaica has reduced production by approximately 30%. Refinery authorities will be evaluating that rate and may have to lower it to 50% if demand for products continues to drop.
Mexico:
- Salina Cruz (325,000 BBL/d): Pemex TRI has reduced by another 10% the already depressed rate levels and is currently processing at 35-30% of total capacity.
- Salamanca (243,000 b/d): Pemex TRI had reduced production by another 10%. The refinery had been previously processing 95,000 BBL/d due to inventory controls. The company has implemented alternating shifts as part of efforts to control the spread of COVID-19. Only part of the labor force is assisting at the facility, which is operating at approximately 80,000 BBL/d.
- La Pampilla (108,000 BBL/d): Repsol Peru has postponed from May to July planned repairs on the 2,400-BBL/d Platformer and 2,800-BBL/d Unifining unit. Personnel are working in alternating shifts. Repsol Peru has shut down the 32,000-BBL/d Distillation 1 unit as a measure to prevent the spread of COVID-19. The plant is running at approximately 70% percent of total capacity.>
- Iquitos (10,500 BBL/d): Petroperu SA is running at reduced rates (estimated at a 20% de-rate) as a result of reduced product demands brought about by the COVID-19 pandemic. Only essential personnel are stationed at the refinery.
- Campana (85,000 BBL/d): Axion Energy is currently running the refinery at 66,000 BBL/d. The company will be evaluating that rate as driving and product demand decreases.
- Bahia Blanca (31,500 BBL/d): Trafigura Pte Ltd continues to process at lower rates. The company has now reduced to 20-25% of normal capacity from the already 10% depressed rate level and will be evaluating the storage capacity that is reaching its limit plus the current stricter procedures at the port, which prevents the product to be exported.
Brazil:
Oil & Gas
Emerging economies such as Peru, Bolivia, Brazil and Argentina are being forced to postpone their investments until the situation is more certain and clear. Given the current outlook and the drop in oil prices, many companies have already taken measures regarding their projects, reducing capex and investments scheduled for this year in order to improve their financial balances. Industrial Info has identified 80 projects delayed, worth $10.20 billion.
Click on the image at right for delayed Oil & Gas project by country.Brazil, Colombia and Argentina are expected to be the first countries to recover from the current crisis due to their previous investments in infrastructure. Petrobras decided to decrease its national production by 200,000 BBL/d to contribute to OPEP's request. Meanwhile, the Mexican state oil company Pemex stated that the country will seek to double its production during 2020, continuing with its exploration and development projects in priority fields.
Within the market, the best outlook is seen within the upstream sector. The big players are prioritizing investments in reducing production costs per field, increasing crude oil and natural gas production levels, and improving the efficiency of production facilities as strategies to deal with falling prices. Industrial Info is tracking $11.63 billion of investment that continues to be active and moving forward despite of current market conditions.
Chemical Processing
Trinidad and Tobago: Methanol Methanol Holdings has delayed to the second half of 2020 its 25-day planned maintenance turnaround at its 540,000-metric-ton-per-year Methanol II unit at its Point Lisas methanol plant in Couva, Victoria, as well as all its capital investments.
Brazil: Proquigel Quimica is maintaining fully operations its site in Bahica, which includes a 25,000-metric-ton-per-year methyl methacrylate unit; a 287,000- metric-ton-per-year ammonium sulfate unit; a 10,000-metric-ton-per-year ethyl methacrylate unit; and acrylates and sodium cyanide units. Mexico: Oxiteno is operating at normal rates its Surfactants plant located in Veracruz State, although only essential personnel necessary for operations are working on site.
Bolivia: Praxair's industrial gases in Santa Cruz continues operating at normal rates and has not been impacted by the COVID-19 pandemic.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
