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

PE prices drop for first time in two years, PP down 5 cents

November 26, 2014 10:22 am ET

North American polyethylene buyers might want to circle November 2014 in red on their calendars — since PE prices this month have fallen for...    More

Image

Visteon in talks to sell its stake in Halla Visteon Climate Control JV

November 26, 2014 9:07 am ET

Visteon Corp. confirmed this morning that it is in discussions with a private equity firm to sell its stake in South Korean joint venture Halla...    More

Image

2014 US machinery shipments up 6 percent

November 25, 2014 5:17 pm ET

Through the first nine months of 2014 U.S. shipments of primary plastics equipment — for injection molding, blow molding and extrusion —...    More

Image

Globalization brings sizable growth, primarily in Asia

November 25, 2014 1:40 pm ET

In 1990, the year after Plastics News published our first issue, there were 33,000 injection molding machines sold worldwide. Fast forward to 2013,...    More

Image

Taipei Plas vandal and German firm trade lawsuits

November 25, 2014 1:26 pm ET

Taiwan businessman Karma Tang, who splashed red paint at German firm Baumüller GmbH's Taipei Plas booth, is in a messy legal battle.    More

Market Reports

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

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

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

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