Braskem boosts stake in Mexico joint venture

Bob Moser

Published: January 16, 2013 9:55 pm ET
Updated: January 17, 2013 9:41 am ET

Related to this story

Topics Materials, Mergers & Acquisitions, Suppliers

SÃO PAULO, BRAZIL -- Braskem SA has increased its stake in the Mexican joint venture project Ethylene XXI, which includes construction of a petrochemical complex with an ethylene cracker and three polymerization plants at an investment of US$3.2 billion.

Braskem's ownership role in the project will increase from 65 percent to 75 percent, and Grupo Idesa SA de CV, its Mexican petrochemical partner, will drop from 35 percent to 25 percent. The change was made official in a contract in late 2012.

The industrial complex will be operational by July 2015, and the change in ownership structure will not delay the project schedule, Roberto Bischoff, vice president for Braskem's Latin America business unit, told Brazilian newspaper Valor Economico. Estimated production of the Braskem-Idesa joint venture will be 1 million metric tons of polyethylene resin per year, aimed at plastics for manufacturers of bottles, containers, pipes and building materials.

On Dec. 19, Braskem Idesa announced it had obtained a loan of US$3.2 billion from various development and commercial banks to build in Mexico. The companies said it was the largest lending package for a new project in the history of the petrochemical sector of the Americas.

Ethylene XXI is the largest private investment ever by a Brazilian firm in Mexico. It has also been referred to as a symbolic project for the petrochemical industry, in that it will be the first greenfield plant to have its prices tied to the U.S. shale gas market.

Mexican oil company Pemex will supply the natural gas, and Braskem's operating costs should be reduced significantly because of that feedstock. The U.S. price per million BTU is below US$3, while in Brazil it runs between US$12-$15.

Mexico is a major importer of polyethylene, satisfying 65 percent of its demand with imports, costing US$1.2 billion to US$1.5 billion per year.


Comments

Braskem boosts stake in Mexico joint venture

Bob Moser

Published: January 16, 2013 9:55 pm ET
Updated: January 17, 2013 9:41 am ET

Post Your Comments


Back to story


More stories

Image

Resin market has consolidated as it matured

November 28, 2014 6:00 am ET

The classic quantity vs. quality debate has played out in the ranks of North American resin makers in the last 25 years.    More

Image

Sipa buys Automa's PET bottle machinery business

November 28, 2014 10:02 am ET

Sipa SpA has acquired the injection-stretch-blow molding (ISBM) equipment business of Automa SpA. No transaction price was disclosed in the...    More

Image

'Evolution, not revolution' on the horizon for A. Schulman

November 28, 2014 6:00 am ET

Bernard Rzepka's schedule for his first year as CEO of compounding leader A. Schulman Inc. does not include reinventing the wheel.    More

Image

Penn Color plans $10 million expansion

November 28, 2014 6:00 am ET

Penn Color Inc. will break ground late next year on a 100,000-square-foot expansion of its manufacturing site in Hatfield, Pa.    More

New liquid colorants for PET packaging released

November 28, 2014 6:00 am ET

PolyOne Corp. has launched a line of new liquid colorants for PET packaging in personal care and cosmetic products.    More

Market Reports

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events