SAO, PAULO, BRAZIL — Dow Chemical Co. of Midland, Mich., bought 50 percent of Brazilian engineering compound producer Branco Industria e Comercio Ltda., forming a joint venture to increase its presence in Latin America.
Terms of the deal, announced Oct. 15, were not disclosed. Sao Paulo-based Branco has a 55 million-pound-per-year compounding plant and a 14 percent share in the engineering compound market in Brazil.
The joint venture is designed to serve clients in the Mercosul trade region, as well as in Chile and Bolivia, especially global automotive, appliance and electronics suppliers.
``Global players require locally based global suppliers, as well as technical assistance services capable of providing timely solutions,'' said Roberto Noronha Santos, engineering plastics commercial director at Dow Chemical in Latin America and general manager for the new association.
``Without a compounding site in Latin America, Dow was already beginning to suffer disadvantages. This new business venture gives us very good leverage in relation to the competition,'' Santos said.
The joint venture's portfolio includes Branco's original product line — polypropylene, ABS and ABS/polycarbonate compounds — plus Dow's trademark materials, such as Pulse ABS/PC, Calibre PC, Inspire PP and Magnum ABS.
In the near future the new firm plans to offer nylon 6/6 compounds using Solutia Inc. resins.
Santos said Dow's investment fits the company's long-term plan for the region.
``According to the most reliable sources, the consumption of engineering compounds in emerging countries is expected to present an annual growth of 10-15 percent during the next years, with a 12 percent increase estimated for Brazil in 1999,'' he said.