As the eurozone crisis persists, so the Spanish economy continues to suffer
by Louise McHenry UTI staff
Unemployment in Spain reached a historic eighteen-year high of 24.4 percent in April, according to Bloomberg. Associated with this, investment, particularly in construction, has fallen. In the next three, four years, there will be little or no construction in Spain or Portugal, claimed Lluis Lluveras, EMEA sales manager of Grup Plasfi.
As the bank restricts credit for new customers, some 400 000 houses lie empty in Spain, Lluveras noted. Plasfi, which makes polyurethane systems and polyols, has seen sales drop by 75 percent in Spain over the last year. Some 60 percent of the company's business is in export now, and "those sales supported the business," Lluveras told UTI in a 19 April interview at the Utech Europe event. Turnover in 2011 was E20 million ($25 million).
Five years ago, 90 percent of Synthesia Internacional Slu's business was in Spain, said Roberto Garcia, manager, Polyurethanes, but the company has had to adapt to the changing situation and now only 65 percent of the business is there, with 35 percent abroad. However, "We're not recovering the same amount of tonnes in other countries that we are losing in Spain," Garcia pointed out.
Synthesia's business is in two parts: 50 percent in polyester polyols and 50 percent in finished, formulated PU systems, for insulation and other industrial applications. In 2007/2008, Spain was the second largest country in terms of spray foam consumption, Garcia said, producing 60 kilotonnes per annum, for some 800 000 new buildings.
Synthesia has been hit by the fall in construction, but "we have a good market abroad" also, Garcia noted, mainly in polyester polyols in the rest of Europe, Asia and South America. Synthesia sells its spray foam outside of Spain also, mainly in Eastern Europe - Romania, Russia - and in France.
Likewise, Plasfi has compensated by concentrating on export markets. Business is growing more in Europe, country manager Pedro Albuquerque said, for example, in Germany, France, Romania and even in Greece. "There are still good companies in Greece," Albuquerque noted, but "they pay in advance."
Plasfi, which is based in Santa Coloma de Queralt, near Barcelona, set up an office in Dubai in November 2011, as a bridge for other markets in the Middle East, including Iran. It is difficult for European companies to enter that market, noted Lluveras, but there are ways to infiltrate it.
Productos Concentrol SA, a release agent and adhesive specialist, based in Riudellots de la Selva, near Girona, already has good business there, commented export manager Sharon Robinson in a 19 April interview.
Concentrol has been relatively unaffected by the economic situation as it is "present in lots of different industries," Robinson said. 2011 was "excellent" with turnover of around E17 million, she noted, adding that last year its exports had "huge growth and did compensate in part for the small growth in Spain."
Concentrol has strong positions in China, South America and the Middle East. It also recently started to see "significant growth," in North America.
Outside construction, there is still optimism. Garcia said Synthesia's footwear and flexible foam markets are increasing, while CASE and industrial applications remain stable. Rigid foam is "down a little," he added.
By contrast, Plasfi's main markets are in construction so it will continue to seek export markets. In 2012, the company aims to "keep the balance," maintaining a low profile as it aims for recovery, Lluveras said.
Synthesia will work to hold on to its customer base and increase its presence in other countries, picking up new markets, for example, in industrial applications. "we are good in Spain but have not enough presence abroad," Garcia commented.