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

Covestro planning IPO in 2015

September 4, 2015 1:02 pm ET

Covestro AG, the former Bayer AG MaterialScience business, is preparing for an initial public offering before the end of the year.    More

Image

Thornton & Co. reaches agreement with its main bank

September 4, 2015 10:04 am ET

Resin distributor and reseller Thornton & Co. Inc. has reached an agreement with its main bank.    More

Image

Formosa Petrochemical considers new polyolefin plant in Louisiana

September 4, 2015 9:45 am ET

Formosa Petrochemical Corp. is reviewing a plan that could bring new production of polyethylene and related products — as well as more than 9,...    More

Image

PTT investing $100 million on ethane cracker study in Ohio

September 4, 2015 9:24 am ET

The American subsidiary of Thailand's PTT Global Chemical, a major petrochemical and refining company, is prepared to invest $100 million to conduct...    More

Image

Sinopec to buy stake in Russia's Sibur

September 3, 2015 5:02 pm ET

China's Sinopec Group plans to buy a share of Russian petrochemical major Sibur, the Russian firm announced Sept. 3, without disclosing details.    More