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Braskem and Grupo Idesa court Mexican plastics processors

By: Stephen Downer

November 11, 2013

COATZACOALCOS, MEXICO — Braskem SA's Ethylene XXI joint venture with Mexico's Grupo Idesa SA de CV is on target to start operations in July, 2015, and is within its $4.5 billion budget, according to the project's business development and commercial director.

"As in any mega project, it's very difficult to control all the variables but we are still managing to keep [the project] on time and within budget," Cleantho de Paiva Leite Filho, told Plastics News Nov. 7.

He added in an email: "up to now no major issue has caused a delay or problems in the construction, and we hope it will stay like that."

Leite spoke at the complex in the state of Veracruz. Braskem and Idesa started developing the site in 2010, after formalizing a 20-year agreement with Pemex Gas y Petroquímica Básica for the supply of ethane gas.

The site, in the municipality of Nanchital, a half mile from Coatzacoalcos on the Gulf of Mexico, covers 494.2 acres, equivalent to 373.7 American football fields.

Fifty-two percent of the project is finished, Leite said. Earlier he told an audience of 45, including potential customers who had been flown in on a chartered jet from Mexico City, that Ethylene XXI is Braskem's largest project to date.

It comprises an ethane cracker, which will produce 1.05 million metric tons of ethylene annually; two polymerization plants with a capacity to produce 750,000 metric tons of high density polyethylene a year, using Ineos technology; and a third polymerization plant that will produce 300,000 metric tons a year of low density PE using LyondellBasell technology.

Currently Mexico imports 60 percent of the 1.9 million metric tons of PE the country's plastics processors consume every year, according to Braskem-Idesa and Mexican consultancy Centro Empresarial del Plástico SA de CV, of Mexico City.

According to Centro Empresarial, 53 percent of the 1.9 million metric tons is used in film, 21 percent in blow molding, 11 percent in injection, 5 percent in pipe, 4 percent in rotational molding and 7 percent for other purposes.

Braskem-Idesa believes Ethylene XXI will improve Mexico's trade balance by $2 billion a year by substituting the importation of PE.

Asked whether Braskem Idesa had signed any supply contracts with customers in Mexico or elsewhere, Leite replied that "for the moment it is still premature to be talking about contracts.

"We have started the pre-marketing and we have already many customers with whom we are interacting in preparation for the operation phase."

Plastic processing company executives on the tour expressed optimism about the future of their businesses once Ethylene XXI is up and running.

"We think we'll have better supply and price options and this certainly will benefit Minigrip and enhance the value of our products," Luis Olavarri Hervella, operations director of Minigrip de México SA de CV, said.

Based in Mexico City, Minigrip is a leading manufacturer of flexible packaging and processes 25 million pounds of resins a year. It was founded in 1966.