Document 7R6rj1q7XaR8O59dkEk4myLX8

'reservation Made at the 6th Annual Meeting of The Vinyl Institute on May 9, 1989 at Callaway Gardens, Pine Mountain, Georgia by Mr. Salvador Ramirez of Polimeros de Mexico *\ ENVIRONMENTAL ISSUES L ATIN -- AMER X CA Q|s| PVC 1 X NTRODUCT I Q|n| - IT IS WELL KNOWN THAT IN RECENT YEARS PLASTICS HAVE BEEN SUBJECTED TO ENVIRONMENTAL REGULATIONS MAINLY IN THE US AND EUROPE. AMONG ALL PLASTICS, PERHAPS PVC HAS BEEN THE MOST DISCUSSED AND CRITICIZED BECAUSE OF ITS ALLEGED HARM TO HEALTH (RVCM) AND TO THE ENVIRONMENT (INCINERATION AND POLLUTION). ARGUMENTS AGAINST THIS POLYMER HAVE BEEN GENERATED BY ECOLOGICAL ORGANIZATIONS AND IT CAN BE SAID THAT THE MAJORITY OF THIS ARGUMENTS APE COMPLETELY UNREAL. THIS SITUATION HAS AFFECTED PVC: REPUTATION TO AN EXTENT THAT IN SOME DEVELOPED COUNTRIES RESTRICTIONS HAVE BEEN IMPOSSED FOR PVC USE. IN THE CASE OF LATIN AMERICA, BEFORE 1*37 THERE WAS NO MAJOR CONCERN ABOUT PVC IN HEALTH AND ENVIRONMENT. NOW, GOVERNMENTS ARE BECOMMING MORE INTERESTED ABOUT THE SUBJECT- CTL018294 IN GENERAL IT CAN BE CONSIDERED THAT PRESENTLY THERE ARE NO RESTRICTIONS FOR THE USE OF PVC FROM AN ENVIRONMENTAL POINT OF VIEW. HOWEVER SOME REGULATIONS ARE IN THE PROCESS OF BEING ISSUED REGARDING THE RVCM CONTENT IN PVC FOR FOOD PACKAGING. BEFORE DISCUSSING CURRENT SITUATION OF PVC IN LATIN AMERICA IT WOULD BE INTERESTING TO MENTION SOME ASPECTS ABOUT MARKET AND CONSUMPTION IN 1933- A > TOT'LL. MARKET LATIN AMERICAN MARKET IS SHOWN ON EXHIBIT 1. IT CAN BE CONCLUDED THAT THE USE OF PVC IN THIS PART OF THE WORLD IS VERY SMALL IF IT IS CONSIDERED THE HIGH POPULATION. CTLO18295 PVC MARKET LATIN-AMERICA 1988 METRIC TONS/YEAR VENEZUELA 68000 COLOMBIA 50000 PERU 25000 CHILE 24000 ECUADOR 14000 ARGENTINA 90000 MEXICO 135000 OTHER 3500 CAR IB. 25000 C. AMER. 40000 BRASIL 370000 POLIMEROS DE MEXICO EXHIBIT 1 CTL018296 F* V/C MARKET L AT I N-AMER I CA 1 -98 METRIC TONS/YEAR BRAS I l_ m e: x xco ar:ge: rsi~r x n a VENEZUELA CO LOMB I A fe:r:i_i CM ILE ECUADOR BO L_ x \y I A CE!NTR:AL_ AMEIR: I CA CAR: I BBEAN MT / YEAR 3'T'O * o o o 1 33 o o o 9 O * o o o t- 8 * o o o 3O * ooo S3 * o o o 24. * o <:> o l *1 o o o 3 * 3OO 4-0 ** o o o S3 9 o o o 3 O <_> CTL018297 \ a ONLY 845,000 MT OF PVC FOR ABOUT 350 MILLION PEOPLE- THIS GIVES A CONSUMPTION PER CAPITA OF 2-4 KG. OF PVC/YEAR WHICH IS VERY LOW AS COMPARED TO DEVELOPED COUNTRIES SUCH AS GERMANY 16 KG., FRANCE 13 KG- OR JAPAN 14 KG. MOREOVER CONSUMPTION OF PVC IN THE US IS ABOUT 4-5 TIMES GREATER THAN IN LATIN AMERICA, BUT POPULATION HERE IS 40 PERCENT MORE SO REAL CONSUMPTION IS ABOUT 6-3 TIMES MORE. Ec > M A F4 ION - IT IS DIFFERENT IN EACH COUNTRY BUT IN AVERAGE THE SEGMENTATION CAN BE CONSIDERED AS SHOWN IN EXHIBIT 2. CTL018298 PVC MARKET SEGMENTATION 1988 LATIN-AMERICA CABLE - WIRE 6% FLEXIBLE EXTR. 4% EMULSION 6% MISCELAN. 4% SHOE 6% SUPPORTED FILM 4% |v FLEXIBLE FILM 10% \ RIGID FILM 3% PIPE - PROFILE 43% POLIMEROS DE MEXICO EXHIBIT 2 BOTTLE 14% CTL018299 EXHIBIT 2 MARKET SEGMENTATION L AT I INI -- AMERI CA MARKET PIPE fSt- PROFILE BOTTLE RIGID FILM total rigid FLEXIBLE FILM SUPPORT E D FILM SMO E CABLE <St WIRE flexible EMULS I OlN| extrusion M I SCE LANEOIJS TOTAL FLEXIBLE 3-3: I -3. t>o 1o cio cTL018300 FV/C PACKAGING INDUSTRY THE PVC PACKAGING INDUSTRY IS VERY ACTIVE IN LATIN AMERICATHEREFORE A BAN ON PVC USE WOULD HAVE A NEGATIVE EFFECT NOT ONLY FOR PVC PRODUCERS BUT ALSO FOR USERS SUCH AS OIL, PHARMACEUTICAL, DETERGENT AND COSMETICS MANUFACTURERS. THE MAIN USE FOR PVC PACKAGING IS FOR EDIBLE OIL- SINCE 1975 THE WERE STRONG PROGRAMS TO REPLACE GLASS FOR PVC- THE SUCCESS WAS SO IMPORTANT THAT TODAY ALMOST 90 PERCENT OF OIL IS PACKED IN PVC BOTTLES- OTHER DEVELOPMENTS FOR PVC WERE DIRECTED FOR RIGID FILMS IN THE PHARMACEUTICAL AND TOY INDUSTRIES (BLISTER PACK), THE PINE OIL AND THE FOOD WRAPPING SEGMENTS (FLEXIBLE FILMS). PVC IS ALSO WELL ACCEPTED FOR SHAMPOOS AND COSMETICS, FOR VINEGAR, MINERAL WATER, FOR JUICE AND OTHER FOOD PRODUCTS SUCH AS SOYBEAN SAUCE, JAM, COFFEE AND DETERGENTS- SOME PVC DEVELOPMENTS ARE BEING STUDIED FOR HOT-FILL APPLICATIONS AND OTHERS TO REPLACE GLASS WHICH HAS STILL A HIGH SHARE OF THE BOTTLE MARKET- THE PATTERN OF PVC CONSUMPTION FOR PACKAGING HAS BEEN ESTIMATED IN 1983 TO BE: SEE EXHIBIT 3- RECENTLY SOME PET RESIN AND MACHINE MANUFACTURERS HAVE PROMOTED THE USE OF THIS POLYMER TO REPLACE PVC BOTTLES AND FILM- THIS HAS CREATED UNCERTAINTY IN NEW PROJECTS BECAUSE NOW PVC TRANSFORMERS ARE LOOKING AT PET- A BAN ON PVC WILL CERTAINLY BENEFIT PET BECAUSE IT IS BEING PROMOTED AS "COMPLETELY ACCEPTED BY FDA"- CTL018301 PVC CONSUMPTION 1988 PACKAGING METRIC TONS/YEAR POUMEROS DE MEXICO EXHIBIT 3 CTL018302 EXHIBIT P\7G CONSUMPTION IN PACKAGING BOTTL ES EDIBLE OIL GOSM E TIC-/ SHAMPOOS GLEANERS/ D E T E RG E NTS OTHERS RIGID EILM PH ARM AC E LIT I GAL TOYS AND HONE P R O D LI GTS OTH E RS FLEXIBLE PILM POOD WRAPPING OTHERS TOTAL= M/TONS % 77,OOO 2:0 _ ooo l i , o c> o 3. Q ,, OOQ 1 IS, OOO -- ---- m 12:- o T1 - 1 <4. , OOO ooo 2:5 , OOO 3-O 1 *5 - O 1 d. , o o o :=; . OOQ 22,OOO 1 <E>5 , O O O M .__ 5-O 1 OO - O CTL018303 GENERAL OUTLOOK GOVERMENTS ARE STARTING TO WORRY ABOUT ENVIRONMENT. IN LATIN AMERICA THE URBAN CONCENTRATION IS VERY HIGH. AS AN EXAMPLE WE CAN MENTION MEXICO CITY, RIO DE JANEIRO, CARACAS, BUENOS AIRES, ETC. THIS MEANS THAT THIS CITIES HAVE A HIGH DEGREE OF POLLUTION AND WITH THE INCREASE OF POPULATION THE WASTE DISPOSAL PROBLEM HAS TURNED TO BE A MAJOR CONCERN. NORMALLY GARBAGE IS NOT INCINERATED, IT IS KEPT IN CERTAIN PLACES WHERE A SMALL PART OF IT IS RECYCLED (GLOSS, CARTON, PLASTIC) AND THE REMAINING IS USED FOR SANITARY LANDFILLS- HOWEVER THE RATE OF GENERATION OF WASTE IN OUR COUNTRIES IS HIGHER THAN THE LANDFILL CAPACITY. THIS MEANS THAT SOMETHING HAS TO BE DONE REGARDING NON--BIODEGRADABLE SOLID WASTES. IN THIS CASE LATIN AMERICA WILL HAVE TO LISTEN, READ, TAKE NOTES AND DESIGN FROM NOW ON PROPOSALS THAT WILL CONTROL THE USE OF DISPOSABLE PLASTIC MATERIALS, SPECIALLY PVC AND PE- ENVIRONMENT IS NOT THE ONLY FUTURE PROBLEM FOR PVC. ACCORDING TO THE PROPOSAL OF FDA IN 1986 REGARDING THE CONTENT OF RVCM IN PVC, BIG SPECULATION HAS BEEN GENERATED IN LATIN AMERICA. CTL018304 PVC FOOD-PACKAGING HAS BEEN USED SINCE 1965 MAINLY FOR BOTTLING EDIBLE OIL AND IT IS A FACT THAT LNO ANGIOSARCOMA DEATHS THAT OCURRED IN LATIN AMERICA CAN BE DIRECTLY IMPUTED TO RVCM IN BOTTLES. IN THOSE DAYS THERE WAS MO CONTROL OF RVCM AND NO ONE WILL KNOW WHAT WERE THE REAL LEVELS OF MONOMER. AT THIS MOMENT IN THREE COUNTRIES SOME NORMS ARE BEING ISSUED REGARDING THE RVCM CONTENT. WE FEEL THAT THIS IS ONLY THE BEGGINING BECAUSE AS I WILL MENTION LATER, THE NORMS ARE VERY FLEXIBLE. THERE IS A POINT THAT HAVE CONFUSED MANY PVC PRODUCERS: IN 1975 FDA PROPOSED TO PROHIBIT THE USE OF RIGID AND SEMIRIGID PVC IN FOOD CONTACT ARTICLES. SINCE THAT YEAR UNTIL 1987 IN LATIN AMERICA THERE WAS NO MAJOR CONCERN ABOUT PVC USE FOR FOOD PACKAGING, THE MARKETS GREW DURING THAT PERIOD AT A RATE OF AT LEAST 5 %. HOWEVER, AFTER THE NEW FDA PROPOSAL WAS ISSUED CUSTOMERS AND SOME GOVERNMENTS ARE BEGGINNING TO WORRY ABOUT PVC USE. ^018305 EXHIBIT- q GENERAL OUT* LOOK PUC GOVERNMENTS BEGIN ABOUT ENVIRONMENT DISPOSAL - TO LUZiE.'ErV' AMD WAST E COMMON REDACT ICE WASTES ROE: L AMDFILLS- IS TO l_l S E SAM I TAE:V' NORMALL Y INCINERATION IS MOT USED <: MO D I O X I M PROBL EM > _ FDA P E: O POSAL F OE: <3EMEE:ATED S P E O U L A T I O M - E: VCM M E LI U O RMS ARE BE IMO FOE: PVC ISSUED - P AC: K AGING OERTAIM BAMS FOE: PV/O LISE H A V/ E BE EM ISSUED IM MEXICO. CTL018306 RECENT F^OT~S- LATIN AMERICA TODAY IS OBSERVING WHAT IS HAPPENING IN THE UNITED STATES. NO FORMAL RESTRICTIONS HAVE BEEN IMPOSSED FOR PVC USE BUT GOVERNMENT INSTITUTIONS ARE NOW BEGGINNING TO QUESTION PVC PRODUCERS ABOUT HEALTH AND ENVIRONMENT. THE MAIN FOCUS HAS BEEN BOTTLES AND FILMS SPPECIALLY FOR FOOD PACKAGING. THERE WILL BE TWO MAJOR CONCERNS ABOUT PVC: RECYCLING AND RVCM CONTENT. RECYCL IMP - AS IT WAS MENTIONED THE CONSUMPTION OF PVC IS QUITE LOW SO THERE IS NO MAJOR PROBLEM ON RECYCLING PVC. IN LATIN AMERICA THERE A VERY FEW FACILITIES FOR GARBAGE RECYCLING AND IN THIS CASE NO SEPARATION OF PVC IS DONE. OUR ESTIMATE IS THAT ONLY 3 TO 5 % OF PVC BOTTLES AND FILM IS RECYCLED BUT IT IS DONE MORE FOR BUSINESS THAN FOR OBLIGATION. WHEN THE WASTE ARRIVES TO THE MUNICIPAL AREAS RESERVED FOR GARBAGE HUNDREDS OF WORKERS SELECT BY HAND PVC BOTTLES OR CTL018307 EI'-JY/ X RONMENTAL ISSUES NO FORMAL MOMENT - X SSUES /A T THIS RECYCLING BUSINESS - IS DONE EOF? 3 nrO s PERCENT OE BOTTL E S AND E I LMS ARE C: l_l RRENTL Y f: e o y c l e d - LATIN /AMEFrlG/A WILL HAVE "TO WAIT, ANALYSE, AND DESIGN PROPOSALS THAT WILL CONTROL PVC DISPOSAL - ^1*018308 FILMS THEN THEY ARE WASHED AND SOLD TO COMPANIES IN THE RECYCLING BUSINESS. THE COST OF THIS OPERATION IS VERY LOW. THE SALARIES OF THESE PEOPLE ARE WELL BELOW FROM MINIMUN WAGES. TODAY IN LATIN AMERICA THERE ARE NO FORMAL REGULATIONS FOR THE ENVIRONMENTAL IMPACT OF PVC. NOTHING HAS BEEN SAID ABOUT THE DIOXIN OR ACID RAIN PROBLEM. IN THE PIPE INDUSTRY THERE HAS NOT BEEN ANY ATTACK TO PVC. EVEN SOME PRODUCERS USE LEAD BASED FORMULATIONS FOR WATER SUPPLY SYSTEMS. RVCM - IN THIS CASE GOVERMENTS HAVE BEEN MORE CONCERNED. IN EXHIBIT 6 IT IS SHOWN WHAT SOME COUNTRIES HAVE DONE ABOUT F:VCM CONTENT. CILOl309 REGULATIONS RVCM OM COUNTRY ME X IOO VENEZUELA AR:G E MT I M/A GO L_ OMBX /A E GO/A DOR: DOM I M I G/AM r:e PUBL I G R E RJ_I BRAZ I l_ GsO/AT EM/AL.A R E GO L_ AT I OIn| R R: O POSAL S G O M R =i l_l M D - RRM X |n| O - S RRM IlNl R R: O POSAL RESIN MO REGIJL AT I OM mo r: e go lation M O REGULATIOM M O REGIJL AT I O M M O REGOLAT I OM MO REGULATIOM ZZO RRM IM RtESIM CTL018310 IT IS CLEAR THAT IN LATIN AMERICA THERE ARE ALMOST NO REGULATIONS FOR MONOMER CONTENT. THE REASON IS VERY SIMPLE: MANY COUNTRIES PURCHASE PVC RESIN OR COMPOUNDS FROM THE US OR EUROPE AND AS LONG AS THEY ARE CLASSIFIED AS "NON-TOXIC" OR "FOOD GRADE" GOVERMENTS WILL NOT REGULATE THIS PRODUCTS. HOWEVER IT IS IMPORTANT TO MENTION THAT CUSTOMERS TODAY REQUEST FOR PVC TO BE USED IN FOOD APPLICATIONS A LEVEL OF 1 PPM OF VCM IN RESIN. THIS IS NOT BUT A GENERAL FEELING AND WAS ORIGINATED FROM THE FDA PROPOSAL TO THE EXTENT THAT IN TWO COUNTRIES (MEXICO AND GUATEMALA) THE MINISTRY OF HEALTH BANNED THE USE OF PVC: FOR EDIBLE OIL AND REQUESTED A LEVEL OF 10 PPB RESPECTIVELY (COMMENT). IN MEXICO w5 % OF OIL IS BOTTLED IN PVC AND EVERY TWO YEARS OIL MANUFACTURERS HAVE TO RENEW THEIR LICENSE TO COMMERCIALIZE OIL FROM A HEALTH POINT OF VIEW. IN LATE 1988 TWO OF OUR CUSTOMERS RECEIVED A COMMUNICATION THAT STATED LITERALLY "RENEWAL OF YOUR LICENCE IS ACCEPTED BUT PVC BOTTLES CAN NOT BE USED FOR PACKAGING SINCE IT IS BAD FOR HEALTH". THIS GENERATED A GREAT CONFUSION, THERE WERE NO MORE REASONS GIVEN. CTL018311 IN A MEETING WITH THE MINISTRY OF HEALTH WE LEARNED THAT THIS BAN CAME FROM INFORMATION FOUND IN SWITZERLAND AND US. SINCE THERE WERE NO FACTS THAT DEMONSTRATED THAT STATEMENT THE BAN WAS RETIRED. THIS IS ONLY AN EXAMPLE OF HOW MISINFORMATION INTERNATIONAL REGULATIONS CAN LEAD TO A DRASTIC BAN- OF CONC L_ US I ON - THE CURRENT SITUATION FOR PVC IN LATIN AMERICA IS NOT CRITICAL AS COMPARED TO THE ONE IN EUROPE AND IN THE US- FUTURE REGULATIONS WILL SURELY COME FROM THE US SO IT IS VERY IMPORTANT THAT INFORMATION IS ACCURATE AND REAL IN ORDER TO AVOID RUMORS AND SPECULATIONS. IN MEXICO THE INMEDIATE CONSEdJENCE FOR MINISFORMATION HAS BEEN THAT PET IS NOW PRESENT IN FOOD PACKAGING. SOME CUSTOMERS HAVE PREFERED THIS PRODUCT BECAUSE "PVC IS BAD FOR HEALTH". MARKET PENETRATION FOR PET IS SMALL BUT IF WE DO NOT REACT IT WILL GAIN A LARGER MARKET SHARE- THE GENERAL CONSENSUS IS THAT IN 3 OR 4 YEARS THERE WILL BE FORMAL REGULATIONS ON RVCM CONTENT IN LATIN AMERICA, BUT IT DEPENDS ON THE RESULTS OBTAINED IN DEVELOPED COUNTRIES. CTL018312 IN THE MEANTIME MARKETS WILL CONTINUE TO DEMAND FOR PVC TO BE "NON-TOXIC" AND THIS MEANS THAT SOME CUSTOMERS WILL CHECK BY THEMSELVES THE RVCM CONTENT- IN THE NEAR FUTURE WE DO NOT FORECAST ANY BAN FOR PVC PACKAGING USE FROM AN ENVIRONMENTAL POINT OF VIEW- MOREOVER THE USE OF PVC FOR FOOD PACKAGING IN LATIN AMERICA IS GROWING AT A RATE OF 5 PERCENT PER YEAR, A FIGURE HIGHER THAN THE TOTAL GROWTH OF THE PVC INDUSTRY. IT CERTAINLY WOULD BE INTERESTING AND HELPFUL IF THE VYNIL INSTITUTE COULD WORK SOME HOW WITH LATIN AMERICAN PVC PRODUCERS IN ORDER TO DEFEND AND PROMOTE THE USE OF PVC- MANY U.S. PVC PRODUCERS EXPORT RESINS, COMPOUNDS AND ADDITIVES TO LATIN AMERICA SO IN THE EVENT A BAN ON PVC ARISES THEY WILL SURELY BE AFFECTED SO IT IS IMPORTANT TO WORK TOGETHER IN THIS MATTER AND OUR FEELING IS THAT THE BEST WAY TO DO IT IS TO RECEIVE FRESH AND RELIABLE INFORMATION SO WE CAN HANDLE THE DIFFERENT SITUATIONS WITH BETTER BASIS WITH OUR GOVERMENTS- 03 - 051939 ' MFR - CTL018313