The past 15 years have seen increasing growth of the Brazilian chemical industry, but rising imports are becoming a serious concern. In the years before 2007, the Brazilian trade deficit in the chemical industry ranged between $6 billion – $9 billion. Barely a year ago, this increased to over $31 billion. There were several reasons for the increasing deficit in the industry, notably greater domestic consumption owing to rising incomes and the increasing value of high-value chemical imports, owing to the fact that chemical companies in Brazil fare better by producing low-grade commodity chemicals.
However, industry pundits are determined to reverse these trends lest the Brazilian chemical industry becomes unsustainable. As the number of finished product imports increases, so the production of domestic chemicals such as textiles, tires and toys decreases. Brazil is not the only emerging market economy to languish through a trade deficit in its chemical industry. Other countries which have endured the same fate include Mexico which also saw a threefold increase in net imports between the year 2000 and 2013. Much the same is true in India.
The solution for the problem of increasing imports is vested in the emphasis on high-grade products, diversification of commodity chains, and full integration of the chemical industry in Brazil. Naturally, new technologies are an essential component of the overall process and government and the business sector must combine their efforts for the improvement and sustainability of the Brazilian chemical industry.
Investments in innovative technologies in Brazil could spike as high as $47 billion within 15 years. This would have the effect of sharp reductions in the trade deficit by as much as $38 billion per annum. There is also plenty of opportunity for job growth in the Brazilian chemical industry with estimates of 19,000 new jobs being created within the next 15 years.