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

Nova expanding PE research center

August 26, 2014 1:36 pm ET

Nova Chemicals Corp. has broken ground on an expansion of its polyethylene research center in Calgary, Alberta.    More

Image

Lakeland Mold changes name to Avantech to reflect changing business

August 26, 2014 11:53 am ET

Lakeland Mold Co., which makes cast and machined aluminum tooling for the rotational molding industry, is evolving and has changed its name to...    More

Image

Sinopec licenses PP technology to USA, posts half-year results

August 26, 2014 11:46 am ET

China's state-owned petrochemical giant Sinopec Corp. said it is licensing polypropylene polymerization technology to a U.S. plant for the first time ...    More

Image

Megadyne buying Belt Corp. of America

August 26, 2014 10:35 am ET

In a move aimed at building its specialty belting manufacturing and fabrication operations, Jason Industrial Inc. — Megadyne SpA's wholly owned ...    More

Image

Sonoco buys Germany's Weidenhammer, plans for thin-walled packaging growth

August 25, 2014 1:41 pm ET

Sonoco Products Co.'s acquisition of Weidenhammer Packaging Group GmbH of Germany includes plastic packaging technology that the company is targeting ...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events