A growing demand for niche storage in South America has prompted QC Terminales to enhance their established industry position and capture more of the market share.
The storage operator, which operates out of Guayaquil, Ecuador and San Antonio, Chile, has recently completed several expansion projects following
two acquisitions at the end of 2013.
On the back of a blossoming GDP and highly favourable storage dynamics resulting in both facilities sitting at full capacity, senior executives committed $13 million to grow capacity on the back of demand.
The Guayaquil facility increased its capacity by 1,730 m3, bringing overall capacity to 21,100 m3. The San Antonio terminal involved the addition of 6,200 m3 comprising five new tanks as well as a new loading platform with three truck positions, a truck weighing scale and pier to terminal pipelines.
In addition, another expansion is underway, with the addition of a further 3,200 m3 spread across four tanks. This will bring overall capacity at the facility to 31,000 m3, which is due to be complete by September 2016.
In an interview with Tank Storage Magazine, Carlos Pineda, general manager at QC Terminales, says that capacity at both facilities has made moderate growth in the past ten years and a strong customer demand prompted the expansion.
‘We are focused on the storage market niches for corrosives, chemical solvents and other specialty liquid bulk. The regional demand for storage does not affect us because there are more storage suppliers, so we are much more dependent on local demand.’
Development of the facilities is firmly focused around customer demand and it is this driving force that has prompted the growth of the San Antonio facility. In Ecuador the business strategy is focused on enhancing the current terminal assets and making some tanks taller.
‘We think that with the extra capacity we can meet demand for our services for at least the next three to four years,’ says Pineda.
‘However Latin America is a place that can change quickly and new markets could be open to us in the future but it is dependent on the political environment. The market is not at a fixed point and could easily change.’
FUTURE GROWTH FOR EVOLVING DEMAND
The company’s facility in Chile is being developed to serve the central region of the country. However Pineda says that there could be an opportunity in the future to develop in the southern part of the country due to the growth of the wooden boards industry.
‘It all depends on the industry growing in the right way,’ he says.
Further growth in Ecuador could be a possibility however it is dependent on government policies concerning the economic, strategic and environmental implications of the oil sector development.
‘There could be opportunity in the future and the government is trying to drive some progress, however there is a problem around money and permits.
‘There are some barriers for investment in Ecuador but the region could be developed in the next three to four years and if the mining industry takes off in the country then there could be strong flows of mining solvents.’
The company’s current growth strategy has been the result of evolving demand for storage and growing throughput through the terminals.
The Guayaquil facility went from handling around 85,000 metric tonnes of throughput to 100,000 and business remains strong despite the market slowing down.
In Chile, the extra capacity will mitigate the loss of some tankage following an earthquake in 2010. Pineda says that the company is now recovering some of the volumes taken out of service as a result and with the expansion projects will add more capacity.
In fact, the San Antonio facility has a significant amount of growth potential thanks to its strategic location, which is close to the hinterland but well connected to the center of the country.
‘San Antonio is located close to a lot of industry in the Santiago metropolitan areas but the best opportunity for us going forward is in the hinterland.
‘Chile has a bigger market and more diverse industry and as a result there are large companies that are continuously producing.
‘However the dynamics in Ecuador are different, with some local competition. Our terminal is very well known, located and regarded.’