SAO PAULO, BRAZIL — As part of a plan to increase its polystyrene capacity worldwide by 1.98 billion pounds per year until 2006, Dow Chemical Co. will soon double capacity at its 220 million-pound-per-year plant in Guaruj , Brazil.
The unit belongs to Estireno do Nordeste SA, a Brazilian styrene monomer and PS producer controlled by Dow since September 1996.
EDN also runs an 88 million-pound-per-year PS plant in Camacari, where the monomer facility is located, but that facility has been out of operation due to productivity problems. EDN's industrial units were built in the mid-1970s.
The expansion will demand a $50 million to $70 million investment to improve production processes and acquire equipment. The capacity is to become available in November 1999.
``In the next months, a group of engineers will open the plant and carry out a technical analysis, in order to define a work plan and determine exactly how much we are going to spend,'' said Gonzalo Barquero, EDN superintendent director.
EDN makes high-impact and general-purpose PS resins mainly for the appliance, electronics and packaging sectors.
The expansion will allow the company to offer the same grades with lower production costs and better processability, he said.
EDN is based in SÃo Paulo and employs 162. The company reported $135 million in sales last year and expects sales of $155 million in 1997.
The Guaruj facility runs at full capacity, with about 90 percent of the output staying in Brazil and 10 percent going to other Mercosul trade region nations — Argentina, Paraguay and Uruguay — and Chile.
Once expanded, EDN intends to ship 15 percent of its production to these countries, according to Barquero, who also is commercial director for the PS business at Dow Quimica Latin America SA.
Dow Quimica Latin America is based in SÃo Paulo.
The company's PS activities in the region include a 143 million-pound-per-year plant in Colombia.
Dow's capacity worldwide for PS totals 3.7 billion pounds annually.