Mexichem formalizes VCM venture with Pemex

By Stephen Downer
Correspondent

Published: September 13, 2013 5:28 pm ET
Updated: September 13, 2013 5:41 pm ET

Related to this story

Topics Mexico, Materials Suppliers

MEXICO CITY — Petrochemicals giant Mexichem SAB de CV says it has formalized the establishment of a $518 million joint venture with state oil company Petróleos Mexicanos to produce vinyl chloride monomer at Pemex's Pajaritos complex, close to Coatzacoalcos in the state of Veracruz.

The two parties shook hands on the deal in January, when it was announced the joint venture would require an investment of $556 million. However, in a filing with the Mexican Stock Exchange September 11, Mexichem said Pemex will invest $228 million in assets in the project while Mexichem will contribute $90 million in assets and $200 million in capital.

The total of $518 million will allow the plant to be modernized, Mexichem said. Pemex uses only 50 percent of the facility's production capacity of 881 million pounds of VCM a year, according to industry consultants.

"It's important to emphasize that this joint venture will enable the development and greater efficiency of the national petrochemicals industry and guarantee that Mexican capital remains in the country while reducing [Mexico's] dependence on importations and the flow of capital to other countries," Mexichem said.

The deal was not an easy one to negotiate. Mexichem withdrew from the scheme in late 2012, accusing Pemex of procrastination, before agreeing to return to the negotiating table in early 2013, by which time a new government had been installed and Pemex had a new management team.


Comments

Mexichem formalizes VCM venture with Pemex

By Stephen Downer
Correspondent

Published: September 13, 2013 5:28 pm ET
Updated: September 13, 2013 5:41 pm ET

Post Your Comments


Back to story


More stories

Image

Ineos to combine ABS unit with Styrolution in Americas

March 4, 2015 10:03 am ET

Global materials firm Ineos Group will combine its ABS resin business with its Styrolution unit in the Americas.    More

Image

Bayer to stop MDI production in Brazil

March 4, 2015 9:21 am ET

Bayer AG's Bayer MaterialScience plans to stop production of MDI polyurethane at its plant near Rio de Janeiro in July, removing 55 metric tons per...    More

Image

Bayer expands with acquisition of Germany's Thermoplast Composite

March 3, 2015 10:59 am ET

Bayer AG's Bayer MaterialScience LLC has bought composite materials specialist Thermoplast Composite GmbH based near Nuremberg, Germany.    More

Image

Bayer MaterialScience spinoff on schedule

March 3, 2015 10:14 am ET

The head of Bayer AG said the group still must decide the details to spin off its Bayer MaterialScience plastics group this year.    More

Image

BASF keeps innovating to drive customers

March 2, 2015 11:39 am ET

Materials giant BASF Performance Materials is keeping innovation alive with new products and processes.    More

Market Reports

Flexible Packaging Trends in North America

North America represents about 30 percent of the global consumption of flexible packaging. Annual growth in this region is forecast at 4 percent during the next 5 years.

For more insight on growth opportunities, drivers of growth and the outlook for 2015, download this report.

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

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events