THE CENTER OF GRAVITY

Colombia 2016 | INDUSTRY | INTERVIEW

TBY talks to Daniella Souza, President Colombia & LATAM Andean Region of Dow Chemical, on the new export landscape and building foundations to support long-term growth.

Daniella Souza
BIOGRAPHY
Daniella Souza began her Dow career in 1997, and worked in the Guaruja manufacturing site for four years as a production planner and as a Six Sigma improvement engineer. She then moved to the São Paulo headquarters as the Latin America Supply Chain Planner for various businesses. From 2006-2010, she was in Michigan at the company’s headquarters where she was a Global Planner and then Global Supply Chain Planner, before moving to Brazil to become the Latin America Purchasing Director. In September 2014, she undertook her current role. She holds a BSc in chemical engineering from Escola Politecnica Universidade de São Paulo and an MBA from Fundação Getúlio Vargas.

How important is Colombia for the Andean region?

All of the regional operations are managed from Colombia, which represents more than 60% of total sales. In 2014, we started to align our vision and make several investments to ensure were ready to lead the region. Now, we have 20% more people working from Colombia than when the region was created. Dow was recognized as one of the great places to work in Colombia for the first time, which represents an important achievement after the restructuring. The beginning of the year was difficult due to the demand variation and the uncertainties surrounding currency, among other factors. Once the value chain understood that currency fluctuations are permanent, the industry adjusted and we saw a much better third and fourth quarter, ending 2015 with a 4% YoY growth.

What level of R&D does Dow carry out in Colombia?

Dow in Colombia does R&D in conjunction with universities, as Dow does not have local laboratories. We have agreements with two top universities for the development of products, as we also do with some of our customers whereby we work together, having our R&D knowledge and people who come in from around the world to develop tailor made solutions for our local needs, such as solutions for building a tertiary road on the coast of Colombia. For those kinds of projects, an expert is selected to perform all the tests that are required with the soil, conditions, and climate, to develop local solutions.

What are the main goals of your $23 million investment plan for the next four years?

The investments that Dow is making are also in joint collaboration, and depending on the results of current discussions it may increase. This $23 million is what Dow have invested in increasing capacity and expanding our production portfolio in Barranquilla and Cartagena. Barranquilla is 100% aligned with the agro business, while Cartagena is evenly split between the agro segment and the chemicals and polyurethane business. Dow is investing in producing even more locally. Those two sites together account for 40% of what is exported, not only meeting the country's needs but also opening a door to foreign markets. Dow is diversifying its production portfolio, which already consists of globally competitive assets. Achieving 40% of exports is great progress, as in the past we were less competitive in the export market.

Can you elaborate on what Dow is doing in Peru, Ecuador, and Venezuela?

Recently, the whole leadership team of the Andean Region met in Peru to assess the opportunities that currently exist there. As it is a region with double-digit growth for some years already, Dow has been increasing the presence of its operative structure every year. In Ecuador, we are betting in terms of logistics and positioning, and have made some changes to how Dow participates in that market. The beginning of 2016 has been difficult in Ecuador; however, it is a country in which we should continue to invest. Some of our competitors and other players left Venezuela due to the current situation; however, Dow has been there for a long time and made the decision to stay. In spite of difficulties Dow will remain in the country as we believe that the business environment will improve.

What are your expectations for the rest of 2016?

The devaluation of the Colombian peso opens an opportunity for exports. Colombia is growing by 3-4% per year in the areas of the country with no rebel presence; therefore, the potential in new regions that will be open to investments is exciting. These will be leapfrog investments; for instance, infrastructure in the rural areas where investments stopped 50 years ago will advance to a better stage starting in 2016. Dow is betting on Colombia, which is why our President for Latin America was here in June along with our board of directors.