"Last year, 72% of the energy consumed by our plants was renewable; at times we have reached 100%, depending on availability."

Javier Sato

CEO, PETROCUYO

January 13, 2023

What is the Petrocuyo’s production capacity today?

Today, Petrocuyo is the sole producer of polypropylene (PP) in Argentina. At the company’s two operations, Mendoza and Ensenada, we have two plants with different technologies. At the Ensenada operation we have also a third plant for polypropylene compounds dedicated mainly to the automotive industry. Petrocuyo has an annual capacity of 320,000 t/y of PP and 30,000 t/y of compounds.

The construction industry for items such as tubes; the non-woven industry, because of its sanitary applications like disposable medical clothes and facemasks, and raffia fabric, mainly for one-ton bags, have driven demand in recent years. Other markets include food packaging, where PP has replaced cellophane, and the injection of buckets, carbonated drink cups, plastic bottles and home appliances like plastic housewares.

How does Petrocuyo source its feedstock, and how have rising logistics prices for imports impacted this?

We mostly obtain our feedstock from refiners. Petrocuyo buys every propylene molecule available in the country, taking all the flow of propane-propylene (RPG) coming from five refiners. We also get some chemical propylene (CGP) and ethylene from Dow’s ethylene cracker located in Bahía Blanca. Ethylene is the comonomer used to produce PP copolymers.

We import catalysts and some additives used in production. This was affected by the worldwide increase in freight rates and scarce availability of ships. Despite the restrictions on imports arising from the shortage of hard currency in our country, we have been able to operate our plants normally.

Looking further ahead, the development of Vaca Muerta is fundamental for Argentina’s petrochemical sector to obtain more raw materials. Both for ethylene and propylene, more ethane and propane from Vaca Muerta is needed. We now have a huge deposit of hydrocarbons with no connection to any production center. The gas pipeline and polyducts still must be constructed to be able to take all the materials out of the resource.

Which macro factors would you say are having the biggest impact on the business climate in Argentina?

The scarcity of foreign currency flowing into the country plus very high inflation rates have the biggest impact. The country lacks clear and permanent rules to attract direct foreign investments and facilitate businesses development.

What steps have been taken to ensure minimal environmental impact from Petrocuyo’s plants?

We have secured renewable energy for our plants, including contracts with eolic and solar farms. Last year, 72% of the energy consumed by our plants was renewable; at times we have reached 100%, depending on availability. Beyond that, we also aim for plastic circularity. The biggest challenge to work with plastic circularity is the lack of education for residue separation, which is a cultural process that takes time.

How can recycling be stimulated in Argentina?

The fundamental point is education so that users of plastic goods become conscious that their correct disposal is essential for recirculation. Waste must go where it can be separated and reused. The second focus of this education should be on the separation of these residues among glass, plastic, metal, paper, and organics, so that once they are separated, reusing them becomes easier. Right now, people demand the same properties from recycled plastics, but are not willing to paying a little more than plastics from virgin material.

What is your vision for Petrocuyo’s growth in the years ahead?

Petrocuyo is always looking for opportunities to grow, and this depends to some extent on the availability of raw materials in Argentina. Today, we do not have those possibilities, but the developing of operations at Vaca Muerta offers a path for growth in the future.

As a company, we will continue with our sustainability projects such as supporting plastic circularity, creating jobs in the regions we work, and focusing on an efficient, sustainable and conscious use of energy.

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