BMI believes this will promote foreign direct investment (FDI) in the Central
American
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and market share. On the economic front, the country has been boosted by the
recovery of US demand for Mexico's manufactured products, but private
consumption remains subdued. Lower levels of consumer spending and employment
are likely to impact the over-the-counter (OTC) market, which is well-developed
given the prevalence and acceptability of self-medication, In the meantime, the
success of the ongoing roll-out
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scheme will have a major impact on the outcome of the upcoming 2012 general
elections, with the incumbent administration likely to pitch the progress of its
Seguro Popular programme against the unpopular need to wipe out illegal copy
drugs ( similares ), on which the low- income population relies heavily.Peru is
failing to exploit anywhere near its potential in petrochemicals. With over
340bcm of natural gas reserves supported by the massive Camisea reserves, it has
enough raw materials to support a petrochemical complex with capacity of more
than 1mn tpa, according to BMI's latest Peru Petrochemicals Report. This
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could become a significant petrochemicals producer and if it secures investment
could be producing 800,000tpa of ethylene by 2010, with further investments in
polyvinyl chloride (PVC) and polyethylene (PE) production. Peru will most likely
develop urea and ethanol production, an ethylene cracker and downstream polymer
and PVC production at the terminal point of the Camisea gas and liquid
pipelines. By 2009, Peru had no production capacity for basic petrochemicals
such as ethylene, propylene or polymers such as PE, polypropylene (PP), PVC and
polystyrene (PS). A small domestic
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petrochemical sector would have to be export-oriented. There is also unlikely to
be any dramatic short-term change in the end-2007 193,000 barrels per day (b/d)
of refining capacity, although modest plant expansion and some upgrading can be
expected by 2010. Depending on the timing of expansion and refinery utilisation
rates, Peru could be facing modest but growing products imports at the end of
the forecast period. Petroper?? is modernising the country's Talara refinery,
upgrading and expanding from 62,000b/d to 90,000-100,000b/d by 2013. Despite
significant gas reserves and the government's policy of prioritising domestic
gas needs over exports, growth in Peruvian petrochemicals production will be
focused on a small number of sectors, in particular fertilisers. According to
BMI forecasts, it is highly unlikely that Peru will see olefins and polyolefins
capacity coming onstream in the next five years. The only development in this
area is the proposed joint venture (JV) by PetroPeru and Brazil's Petrobras and
Braskem to create a facility that will produce 700,000-1.2mn tpa of PE. However,
this has been pushed back by two years to 2016 as investors wait for an increase
in gas supplies. In the fertiliser segment, proposed projects could provide
2.41mn tpa of ammonia capacity, but BMI does not believe any of these projects
will be completed before 2015. We are mindful that past proposed petrochemical
projects have not progressed and that some plants may not get off the
drawing-board. While the domestic petrochemicals market will remain small, it
will be stable with Peru's economy performing favourably in regional and global
terms.
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