BMI's Executive Summary

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Industry Overview

Chile's petrochemicals industry is relatively small compared to other Latin American countries. The nation is heavily dependent on Argentina for its natural gas and power supplies due to heavy demand coupled with a lack of alternative sources of feedstock required for the petrochemicals and other industries. The erratic supply of gas received from Argentina recently led to a slowdown at the methanol plants of Canada-based Methanex and a below par utilisation of capacities. Leading petrochemicals companies in the Chilean industry include Methanex, Chile-based Sociedad Química y Minera (SQM), Petroquim and Chile's state oil company, ENAP.

Industry Developments

In October 2007, Chile's Ministry of Mining announced that seven companies or consortia presented bids for 10 blocks in an auction held for exploration and production (E&P) in the Magallanes region. The auction is part of a strategy to reduce the country's heavy dependence on gas imports from Argentina. In September 2007, Methanex announced that only one of four plants at its facility at Cabo Negro was operational due to limited supply of Argentine gas. In April 2007, Brazilian state-run oil company Petrobras signed a cooperation agreement with ENAP for joint business and project opportunity development in all areas of the hydrocarbon and energy industry. Earlier, in March 2007, Methanex signed a memorandum of understanding (MoU) with local company GeoPark Holdings that includes a 10-year gas supply and purchase commitment from GeoPark's Fell Block in southern Chile. ENAP Refinerias' Aconcagua refinery is constructing a hydrogen plant at an investment of US$70mn, while Petroquim is constructing a high-density polyethylene (HDPE) facility at an investment of US$700mn.

Industry Forecast

The Chilean Association of Chemical Industries expects an investment of around US$1.45bn up to 2008 in the chemical and petrochemicals industries. But ethylene as well as polyethylene (PE) and polypropylene (PP) capacities are likely to stagnate in the near term with no concrete plans on the anvil. The American Chemistry Council's (ACC) Economic and Business of Chemistry Situation and Outlook reports a likely upturn in Latin American chemical industry growth, notably in Argentina, Brazil, Peru and Venezuela. ACC's industrial production average growth forecast for Chile over 2004-2014 stands at 5.3%.

Contents

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Chapter 1 - Executive Summary

Industry Overview

Industry Developments

Industry Forecast

Chapter 2 - SWOT Analysis

Chile Petrochemicals Industry SWOT

Chile Economic SWOT

Chile Business Environment SWOT

Chapter 3 - Market Overview

Table: Chilean Petrochemical Sector--Cracker Capacity Data and Forecasts (000tpa)

Table: Capacity of Methanex Plants – 2005 (000tpa)

Exports And Imports

Chapter 4 - Industry Trends And Developments

Impact Of Declining Petrochemicals Prices

Mergers And Restructuring Activities

Projects And Expansions Currently Underway

Bilateral Ties With China

FTA With Australia

Chapter 5 - Industry Forecast Scenario

Table: Chilean Petrochemicals Sector – Historical Data & Forecasts

Chapter 6 - Economic Forecast Outlook

Table: Chile – Economic Activity

Chapter 7 - Company Monitor

Profiles

Methanex

Sociedad Química y Minera (SQM)

ENAP

Dow Quimica Chilena

Petroquim

BASF

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Petrochemicals Industry

Cross checks

Competitive Landscape for Latin America Petrochemicals Reports: Sample of Companies Ranked

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Comparative company analyses and rankings by US$ sales, % market share, employee size, registration date and ownership structure. Company SWOTs (Strengths, Weaknesses, Opportunities, Threats) on all leading international and national operators in each market, including competitive intelligence in the following: Overall geographic presence, competitive positioning against local companies; production capacity, sales and market share; joint ventures, foreign direct investment, projects and acquisitions strategy.