Fase II

ANALYSIS OF COMPETITION AT THE NATIONAL LEVEL

The chemical industry is a millionaire business, led by giant companies worldwide, such as Bayer
Group, BASF, Air Liquide, DowDuPont, Sasol, Tecnofar TQ, among others. The importance of
this industry lies in the fact that many of the chemicals that are generated are used as raw
material for the elaboration of a wide variety of products, which you can easily find in the market.
That is, the production of many industries depends on this sector.

Data provided by SICEX on the chemical sector in Colombia in OCT – 2018

Companies that carry out the largest import of chemicals:

CONCRETOS ARGOS SA
DOWELANDCO DOW AGROSCIENCES
DETERGENTE LTDA
SCHLUMBERGE SURENCO
CICLO WATER COLOMBIA SAS
TOXEMENT SA COLOMBINA SA
DRUMMOND LTDA MANUCHAR COLOMBIA CIA SAS STEPAM COLOMBIA

COMPANIES AND INSTITUTIONS DEDICATED TO

THE CHEMICAL SECTOR IN COLOMBIA.

Nubiola Colombia Pigmentos, S.A.:

Today, thanks to the development and expansion of the product range, Nubiola has a wide range
of technical pigments ideal for applications in sectors as diverse as plastics, paints, cosmetics,
inks, inks, inks for artists, etc.

Basf Química Colombiana S.A.

BASF serves the needs of Colombian agriculture and industry through its Crop Protection and
Industry Divisions.

Plant protection, seeds and support for plant biotechnology are the basis of BASF's research in
the agricultural sector. Through it, it has managed to develop products that effectively and
ecologically protect the technical production of food and flowers. BASF Química Colombiana
S.A., through the Crop Protection Division, serves the Colombian agricultural market with
herbicide, fungicide, insecticide and fertilizer product lines and its services, with emphasis on
high value crops and large area.
Química Amtex S.A.
In Latin America AMTEX is the largest producer of sodium carboxymethylcellulose (CMC) under
the brand name "Gelycel" ®, operates three production plants in Argentina, Colombia and
Mexico, with sales offices and representatives in most major cities of the American continent.
Real S.A.S.
We are an international company created with state-of-the-art technology to develop,
manufacture and market additives and raw materials in the food, bakery, cosmetics, personal
care, pharmaceutical, plastics industry among others.

Electroquímica West, S.A.

Electrowest is proud to be a serious, responsible company, with technical orientation and
committed especially to the culture of cleaning and disinfection in our country, with strict
compliance with regulations and with cooperation in different sectors of the economy in the
solution and prevention of sanitation problems (human, animal, vegetable, environmental and
industrial).

HRA Uniquimica S.A.

HRA is a family business founded in Medellín in 1971, dedicated to the production and marketing
of ingredients for the food, pharmaceutical, cosmetic and agro-industrial industries, with attention
to the markets of Colombia and Latin America.

Química Básica Colombiana S.A.

In 1977 he began the project of assembling a Sulfuric Acid plant to supply the market of
southwestern Colombia. The municipality of Caloto was selected for the location of the plant,
thanks to its proximity to the main consumers and to the Empresa Minera Indígena del Cauca
S.A., supplier of the most important raw material, sulfur.

THREAT OF INTENSE RIVALRY IN THE CHEMICAL SECTOR

The chemical sector, in general, persistently tends to the development of new products and the
improvement and improvement of existing chemical production processes. However, in
Colombia, health and environmental regulations are of great importance, among others,
implemented by the Colombian Agricultural Institute, the National Institute of Drug and Food
Surveillance, Icontec and Indumil, among others, bearing in mind both compliance with the
requirements of health and environmental regulations, such as increasing the quality and uses
of the products obtained.
DIMENSIONS THAT INFLUENCE THE SECTOR:
High number of competitors, based on a high percentage of direct competitors in relation to
substitute competitors.

• In recent years, the companies that make up the chemical sector have been exposed to
constant regulatory changes. These companies, on the other hand, concentrate on chemicals
for animal nutrition such as baking soda, monodicalium phosphate and tricalcium; amino acids
such as lysine and threonine; sulfates; chemicals for human consumption such as aspartame,
citric acid, natural cocoa powder, acesulfame; and controlled products such as urea, potassium
chloride, sodium metabisulfite, n-propyl acetate, calcium nitrate, potassium nitrate, ammonium
nitrate, etc.

• Government standards include:

1. Permits issued by the Ministry of Agriculture and Rural Development, commonly called
"compulsory absorption quotas for imported agricultural products", which are based on
compliance with product absorption agreements national; within the portfolio of this
industry they shelter animal and vegetable oils and fats and chemicals intended for animal
feed.
2. Licenses of products subject to import quotas that generally have to do with animal and
plant nutrition products.

3. Import permit for products controlled by a state agency. It covers all raw materials (in this
case chemicals) used for the manufacture of special control drugs or drugs. This permit
is processed only through the National Narcotics Fund of the Ministry of Social Protection.

4. Chemical products that, without being individually explosive, together form explosive
substances or that by means of transformation can be highly explosive. Special care
should be taken with ammonium nitrate (widely used in this sector). This permit is granted
by the National Government, through the Military Industry (Indumil), which belongs to the
Ministry of National Defense. This entity is responsible for notifying the Ministry of Foreign
Trade, the DIAN and the DAS about the import of hazardous chemicals.

• There are products that are difficult to import for national distribution, due to the number of
requirements and prior licenses requested by the respective entities.
• The chemical sector does not carry out shared production processes.
• It is a sector that through technological advances tends to
improve the production processes of the final good; thus, it increases the
need for the chemical offered.
• Companies need foreign suppliers to meet the
internal customer needs.
• The financial results of companies in the sector are reflected
in the small number of them.
• There is no association relationship between companies for the production and distribution of
products.

Production Logistics of the Chemical Sector.

Top chemical industry leaders could significantly increase their competitive advantage if they
start leveraging logistics as other global industries do. Using logistics as a strategic management
asset and not as a transport and delivery service saves costs, improves performance and
increases competitiveness.

In the report, Professors Krupp and Suntrop provide chemical companies with five keys to using
logistics strategically, and detail how to apply them:

The first is a renewed focus on optimizing logistics costs by adopting a "Total Cost of Ownership"
approach, which involves creating an end-to-end analysis of supply chain costs and integrating
supply chain management and logistics into decision-making.

The second is to free up capital for better balance sheet management through the optimal use
of just-in-time solutions and reduced inventory; innovative companies see logistics as one of the
battles of the future they must win.

The third is a smart investment in the best logistics assets, owned or through service providers,
and the adoption of a collaborative approach to obtain the best return on capital employed.

The fourth focuses on safety, a number one priority for chemical companies. A proactive
approach to standardizing security throughout an international supply chain can be a cost-
effective and long-term differentiator. "A board that is committed to developing and implementing
a comprehensive supply chain management security strategy can set your company apart from
the competition," the report highlights.

The fifth is to obtain the right logistics services for the product and business unit in question.
Differentiated services and supply chains specifically designed to meet customer requirements
can create a competitive advantage in an industry where standard molecules are basically the
same, no matter which company manufactures them or in which region it does so.

Production:
BASIC CHEMISTRY

The basic chemistry sector is an industrial and economic activity that uses basic raw materials
for the production of intermediate products that can also serve as raw material for other
industries.

The first link in this chain is basic chemicals (formulation and synthesis of active ingredients);
which are mixed with other ingredients and secondary elements, or vehicles, better known as
excipients.
Through this process, a series of products such as fertilizers and nitrogen compounds,
pesticides and other chemicals are made.

In terms of the International Standard Industrial Classification, ISIC Rev. 4 A.C., Colombia
Productiva has prioritized for the development of its actions the following economic activities of
the basic chemistry chain: manufacture of basic chemical substances, except fertilizers and
nitrogenous inorganic compounds (class 2011); manufacture of fertilisers and nitrogenous
inorganic compounds (class 2012); manufacture of pesticides and other chemicals for
agricultural use (class 2021) and manufacture of other chemicals n.c.p. (Class 2029).

The specialization achieved by the country's companies, mainly in agrochemistry, basic

chemistry, intermediate, and even polymeric chemistry, begins to bear fruit in terms of prestige
for the quality of Colombian products and opening markets.

It is the most productive sector within the manufacturing sectors prioritized in the bets of
Colombia Productiva, with an added value per worker of $208.9 million in 2017. On the other
hand, its exports amounted to US921.6 million in 2017.

LA CADENA DE VALOR DE LA INDUSTRIA QUÍMICA

Great growth in terms of production and added value during the last periods.

The country has critical production capacities in some of its sectors.

Rerefrencias.
Aldrich, H. (1979). Organizations and Environments. New York: Prentice
Hall.
Ansoff, I. (1979). Strategic Mangement. London: MacMillan.
Bourgeois, L., & Eisenhardt, K. (1988). “Strategic Decision Processes in
High Velocity Environments: Four Cases in the Microcomputer Industry”.
Management Science, 34 (7).
Cameron, K.; Kim, M., & Whetten, D. (1987). “Organizational Effects of
Decline and Turbulence”. Administrative Science Quarterly, 32.
https://sicex.com/blog/sector-quimico-un-negocio-con-gran-demanda-e-importantes-
ventajaseconomicas/#:~:text=La%20industria%20qu%C3%ADmica%20se%20encarga,%2C%
20fertilizantes%2C%20maquillaje%2C%20etc
https://www.quimica.es/empresas/pais/colombia/
https://logisticasud.enfasis.com/historico/la-logistica-en-el-sector-quimico-un-potencial-sin-
explotar/
https://www.colombiaproductiva.com/ptp-sectores/manufactura/quimica-basica