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
Companies & Associations

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

Feeling undervalued, China XD Plastics eyes leaving Nasdaq

February 21, 2017 2:59 pm ET

The chairman of China XD Plastics Co. Ltd. and an affiliate of private equity firm Morgan Stanley are making a bid to take the large automotive...    More

Image

Team NEO a 'single point of entry' for Ohio polymer players

February 21, 2017 1:49 pm ET

Plastics and polymers are a big economic growth driver for Northeast Ohio — and Team NEO is working to make sure it remains that way.    More

Image

Study backs options for blood bag plasticizers

February 17, 2017 9:09 am ET

Anaheim, Calif. — Eastman Chemical Co. conducted a clinical trial to evaluate a non-phthalate plasticizer for medical applications and the...    More

Image

2016 a good year for PVC sales; PP, PS also see slight increases

February 17, 2017 8:47 am ET

PVC resin sales in the U.S. and Canada enjoyed solid growth in 2016, while North American sales for polypropylene and polystyrene resins saw slight...    More

Image

Clariant increases sales in plastics business, dampens sell-off rumors

February 17, 2017 6:18 am ET

A change in strategy for its plastics-related businesses helped Clariant International Ltd. raise its sales by 2 percent to 5.5 billion euros. EBITDA ...    More