Plastics

Chavistas pull a Benjamin Braddock.

One of Venezuela’s many under-reported stories is the series of troubles in state-owned petrochemical giant PEQUIVEN.

A loyal reader has been writing me for months, talking about the difficulties in getting polyethylene, which is used to make, among other things, wrappers for food packages and plastic bags.

Until recently, Venezuela was an exporter of these types of resins. Now, we import the stuff. But problems with supply have been increasing as of late, causing all sorts of problems for companies that use this plastic to sell their stuff. These folks are seriously cutting back on investment and production.

As our reader tells it, many staples, from rice to flour to sugar, use polyethylene in their packaging.  The Pequiven refinery at El Tablazo, Zulia, was in charge of production, but El Tablazo is simply not what it used to be, and Pequiven cannot keep up with demand.

Unsurprisingly, Coramer, the company in charge of distributing the polyethylene, has a charming little greeting sign when you click on its home page.

In researching this post, I discovered another blog solely dedicated to the petrochemical industry. The blog reports all sorts of shortages in the plastics industry, including polyethylene and in other types of resins as well, such as PVC.

I guess this, added to the slow demise of the newspaper industry, means that pretty soon Venezuelans will have to buy their food wrapped in banana leaves, just like our endogenous ancestors did.

31 thoughts on “Plastics

  1. In the Fonden projects, there is US$ 166 MM item (#51) for an “expansion” of the polyethylene plant (does not say which one) of which all but 1.5 million has been disbursed. The funny thing is that they spend money in paper company Invepal, which was losing money when it was private, which is hopeless now under their leadership, rather than keep what makes money working.

  2. Not to worry. You can always wrap your food in Bolivares. I expect there will plenty of them, and they won’t be worth more than the plastic or old newspapers, you used to use.

  3. This is what happens when you have a Professional ass-kisser like Clark Inciarte at the helm, who never advanced in his career until after the internal cleaning in PDVSA.

    [From a member of a family who was childhood friends with the dude, along with Mario Isea of all people]

    • Ahh, the company you keep!

      Not that the current honcho, Ameliach, is that much better but at least he knows how the market internally works.

  4. Thanks JC!

    Miguel Octavio:

    More than likely it is referring to a polyethylene plant slated for the Jose Complex (which really is called Hoces, but has been corrupted over time to Jose) in Anzoategui.
    This was slated to be an Exxon Mobil JV with PDVSA, but given how that relationship has gone, I am guessing that won’t happen! Then it was to be done with Braskem (Brazil), and we got a three-fer. Three times it was announced that it had fallen through, and twice it was reported it was back on track. Since the last announcement the deal fell through nothing stating it was back on track has surfaced, so those monies are probably “en pico ‘e zamuro”

  5. These are the PE plants (in spanish):
    PEAD (Polietileno de Alta Densidad)
    PEAD (polietileno de Baja Densidad)
    PELBD, PLMD (Polietilenos Lineal de Baja y Media densidad, antigua Resilin)
    All three plants operate under one centralized administration (Polinter). The problem is not limited to PE, as the PP plant (Propilven) also depends on the olefin plant (located in the Ana Maria Campos, formerly El Tablazo Petrochemical complex) that produces ethylene and propylene, the monomers required for the production of PE and PP. Ethylene is also used for the production of PVC at the plants also located in AMCPC. The production of these monomers depend entirely on the supply of natural gas, which comes from the compression plants located off the shores of La Salina, Tia Juana, Lagunillas and Bachaquero. Natural gas is very scarce as a consequence of multiple production problems in PDVSA Occidente.

    • Is that the natural gas they intend to use for large scale road transportation? As you know, for two or three years now, automakers are required by law to produce a certain number of cars with dual gasoline-natural gas capability whether consumers want it or not.

  6. Same one. Also same that could not feed the new combined cycle plants in the Rafael Urdaneta power generation plant.

  7. This is the heart of Venezuelan oil business model -and it is rotten.
    My God, how soon- how much money should be spent – instead of buying weapons
    to get all of this stuff back into production.
    Venezuela should be investing in development of natural gas too. I don’t know how
    much is being invested but I am sure it is not enough…
    This is all so stupid- and all Chavez’s fault.

    • Chavez strangling the golden goose. All Venezuelans are in grave danger.
      Please read Alek Boyd’s article about “Skeleton’s in PDVSA’s closet posted today.

      • Carta de Huber Matos a Raúl Castro

        San José, Costa Rica, Marzo 16 de 2010

        Comandante Raúl Castro:

        Es probable que a estas alturas no te hayas dado cuenta de las consecuencias del heroísmo de Orlando Zapata. La historia demuestra que la permanencia prolongada en el poder distorsiona la visión de quienes lo detentan.

        El Parlamento Europeo, que representa a casi 500 millones de personas, votó mayoritariamente por condenar su muerte, exigir la libertad de los presos políticos y la democratización de Cuba; en realidad esto es una condena para ti, para Fidel y al medio siglo de tiranía.

        El sacrificio de Zapata ha reducido aun más esa minoría que el régimen ha mantenido engañada en el mundo. La campaña de mentiras que muchos han querido creer por demasiado tiempo va quedando al descubierto.

        Los gobiernos que respaldan a la tiranía, como España y Brasil, son hoy cuestionados por muchos de sus compatriotas y por millones de ciudadanos del mundo democrático. Los gobernantes latinoamericanos que han callado los atropellos de la dictadura en Cuba, han quedado en el ridículo ante la denuncia del presidente Oscar Arias, un líder que ha demostrado tener valor y principios.

        Hasta los medios de prensa internacionales, que se han comportado como rehenes de la dictadura en Cuba, en esta oportunidad no han sido tan cautelosos en el manejo de la muerte de Zapata, de la huelga de Guillermo Fariñas y de otros presos políticos en la isla.

        Es probable que tú comprendas en algún grado las consecuencias de todo esto. Súmale la silenciosa condena del pueblo cubano y la indignación de la gente en la calle por ese crimen y por la calumnia racista con que ustedes trataron de justificarlo.

        Miles de cubanos miembros de las Fuerzas Armadas, del Ministerio del Interior y del gobierno, repudian calladamente la muerte de Zapata y la grosera justificación del gobierno.

        El pueblo cubano es el recurso más importante en el proceso de desarrollo económico, cultural y político de la Nueva República. Por no entender eso, todas tus seudoreformas han fracasado y seguirán fracasando.

        Sin un Estado de Derecho no habrá un pueblo dispuesto a trabajar con fe, entusiasmo y confianza. Sin un gobierno legítimo, con leyes e instituciones independientes del capricho o de los intereses de quien gobierne, no habrá confianza ni garantías para el progreso de la Cuba del siglo XXI a que tiene derecho la juventud cubana.

        No llegarán a Cuba los recursos financieros sin un régimen democrático. Ni los recursos financieros, ni las inversiones necesarias para revertir medio siglo de atraso, abandono, corrupción y despilfarro.

        Un cambio sin democracia equivaldría a una piñata donde los privilegiados del poder y el capital extranjero se repartirían el patrimonio de Cuba. Ustedes creen que el pueblo se conformará si le reparten migajas. Piensan que así podrán continuar mandando mientras ellos siguen viviendo como ciudadanos de segunda categoría.

        Tú y Fidel traicionaron la revolución democrática por la que luchamos en la Sierra Maestra. Tú y Fidel traicionaron al pueblo cubano y trataron de justificar esa traición con las promesas de la utopía comunista, que resultó un fraude de proporciones históricas.

        El 21 de octubre de 1959 le dije a Fidel que el camino que tomaba llevaría a nuestro país al desastre y, por esa razón me hicieron pasar dos décadas en prisión, que viví con orgullo porque fui leal a mi pueblo y a los ideales democráticos de la Revolución.

        Una semana después de arrestarme, ustedes asesinaron al Comandante Camilo Cienfuegos.

        Tu y Fidel mandaron a miles de compatriotas al pelotón de fusilamiento. Nunca sabremos cuantos cubanos fueron asesinados en secreto, ni cuantos perdieron su vida en el mar en desesperados intentos por alcanzar la libertad. Cientos de miles de ciudadanos han pagado con largas condenas de prisión su amor a la libertad. Todavía hay un presidio político injustificado y brutal. Solamente Dios puede tener una compresión real del daño moral y del sufrimiento causado al pueblo cubano durante medio siglo.

        Como si todo esto no fuera suficientemente vergonzoso, ustedes han estado seriamente involucrados en el narcotráfico y el terrorismo internacional.

        Cuba está en la ruina material y tú y tu hermano han envejecido en el poder, queriéndole hacer creer a todo el mundo que el desastre es por culpa del “bloqueo” estadounidense. En realidad tú y Fidel despilfarraron los inmensos recursos que la URSS puso a su disposición por treinta años, como también hicieron con los préstamos de la cuantiosa deuda externa que tiene Cuba y los miles de millones de dólares que le han sustraído a Venezuela, con la complicidad del lacayo que tienen allí en el poder.

        El heroísmo de Orlando Zapata ha despertado al mundo y ha cautivado al pueblo cubano. La indignación que ha provocado su asesinato es el principio del fin del castrismo. Tú puedes escuchar lo que te ha pedido Juan Juan Almeida, el hijo del comandante Almeida, e irte de Cuba porque eres el responsable principal de esa muerte.

        Le vas a ahorrar a nuestro pueblo un sacrificio final y vas a darles la oportunidad de redimirse a los miembros de las Fuerzas Armadas, del Ministerio del Interior y del gobierno que quieren participar en un auténtico cambio de rumbo.

        Fidel está fuera de la realidad y todos estamos presenciando su castigo en vida, pero tú puedes evitar correr la suerte de Ceauşescu, porque antes de que el pueblo te alcance, el propio ejército, en lugar de responsabilizarse ante la población con tu fuga, hará justicia contigo. Sálvate y salva a tu familia, todavía estás a tiempo.

        Huber Matos

        Comandante de la Revolución

  8. To put things in perspective, Venezuela’s 1998 budget, the year before Chavez came to power, was US$ 12 billion. That means that Fonden+Fondo Chino in 2010 alone was equal to that budget. These guys have four times the amount of money every year and they destroy everything.

    • I like to emphasize that those 12 billion USD covered all costs of running and maintaining the nation, and there was still some left over for development. This implies that with four times that amount, the difference is *not* for costs, since the costs are covered with the first 12 billion.

      So if 1 of those billion was for development, we’re really talking these guys have 36 times the amount of money every year *just* for development!

  9. Hi all, it is good to know that my blog is useful for somebody else than just me.
    Specially because I decided to start the blog after being a regular reader of Caracas Chronicles and The Devil’s excrement, and I wanted to contribute somehow to organize and to share the information.
    Once again, thank you for the small recognition of the effort made in my blog. I am always open to comments and feedback.

    Now that I’ve reached mainstream media, the next step is to appear in la Hojilla =)

      • Si, de hecho en el segundo post menciono que me fusilé la imagen de su blog, aunque luce mejor en el vuestro, considérenlo un homenaje, gracias por compartir

        • Y qué importa! El Waraira Repano ahora es de todos!

          De nada Jorge, me gusta eso de que existan blogs temáticos. Sigue escribiendo.

  10. The initial use of polyethylene, or PE, was hula hoops. One of the most important ongoing uses is irrigation tubing. I just got home from buying PE tubing in Chile. The best stuff is made in Spain. The whole continent — particularly those of us who like hula hoops — suffers for lack of consistent natural gas supplies.

    • Pal while I find what you are saying a bit humerous,’
      aren’t you “trivializing” the subject here.
      Natural gas -highly important fuel source, agreed. Not just for hula-hoops.;.

    • The lack of natural gas is the real issue here. It’s a bogglingly huge issue that threatens to leave the whole continent lagging in development. The hula hoops are sort of trivial, sure, but the point (which I now need to spell out) is that even something so trivial is affected by Venezuela’s inability to tap the continent’s biggest reservoirs of free-flowing natural gas. Yes, irrigation pipe is more important. So is natural gas injection into oil reservoirs. And the aforementioned electricity production. Very interesting topic you folks have tapped into.

      • Doesn’t Venezuela import ng from Columbia?

        If Venezuela truly has such huge reserves and is not developing them the rest of South America might get pissed. Without cheap natural gas Brazilian industry will keep getting squeezed by Chinese competition. Its possible that just after South America developed a favorable and equal trade relationship with the US it will devolve into a neo colonial relationship with China, importing finished goods and exporting raw materials for cash. Natural gas exported across south America would help counter that trend.

        • “devolve into a neo colonial relationship with China, importing finished goods and exporting raw materials for cash”-Even worse- China will be invited in to -build roads,
          drill for oil, minerals, and soon-factories and banks -owned by China-say hello to your
          new Communist masters and a very happy Chavez…

      • Sapitto, Chávez has thought it all through, so don’t despair.

        http://news.nationalgeographic.com/news/2007/01/070104-gas-pipeline.html

        The Gasoducto del Sur will cost or costs or has cost only 21 billion dollars, which is peanuts for us, Venezuelans.

        The question is whether that pipeline will be finished after or before the Venezuelan-Cuban pipeline (you can read about that in this article by a well-known journalist http://newsgroups.derkeiler.com/Archive/Soc/soc.culture.cuba/2007-08/msg00586.html )

        Further information here http://en.wikipedia.org/wiki/Gran_Gasoducto_del_Sur (there you see two great visionaries: a disciple of late military Perón and the current military Chávez, almost like San Martín and Bolívar 2 centuries ago)

  11. 1. I once attended a presentation by PDVSA (pre-1998) in which they referred to a gas pipeline from Venezuela to Florida. The presenter pointed out that this was NOT a PDVSA idea, but a consultant from a organization like the World Bank.
    2. Shale gas is real but it’s not a savior for anybody’s economy in the long term. See several articles in the Oil Drum:

    http://www.theoildrum.com/node/7075

    http://www.theoildrum.com/node/8173

    3. Natural gas is certainly cleaner than coal and crude, as far as particulates and heavy metals and risks of pollution. But it’s just as efficient at adding CO2 to the atmosphere, which is a long-term problem.

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