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

M. Holland acquisitions add to growth in Latin America

February 9, 2016 1:12 pm ET

Materials firm M. Holland Co. has continued its buying run by purchasing a pair of resin distribution firms in Puerto Rico.    More

Image

Omnova sells Indian rubber manufacturing business

February 9, 2016 11:28 am ET

Beachwood, Ohio-based Omnova Solutions said it has sold its Indian rubber manufacturing business to India-based Apcotex Industries Ltd. for $5...    More

Image

PE sales rise in 2015

February 9, 2016 10:00 am ET

Export markets helped boost polyethylene sales in the U.S. and Canada during 2015.    More

Image

A. Schulman adds capacity in Germany

February 8, 2016 2:29 pm ET

A. Schulman Inc. has added a pair of new production lines and a fully automated packaging line at its plant in Kerpen, Germany.    More

Image

Global oversupply of PET to continue pressure on recycled PET

February 8, 2016 1:41 pm ET

PET recyclers will feel pressure for the foreseeable future because of continued low prices of virgin resin, one plastics industry analyst believes.    More