Growth continues for São Paulo-based petrochemicals giant Braskem SA, which plans to add capacity for PVC and polyethylene by 2015.
Braskem has an increasing responsibility, as a major player in the region, to supply these resins, polymers Vice President Rui Chammas said at Chemical Market Associates Inc.'s World Petrochemical Conference, held March 23-24 in Houston.
The PVC expansion will be in the form of more than 400 million pounds of new capacity added in Brazil in the first half of 2012. The polyethylene addition is part of the much-larger Ethylene XXI project in Mexico. Ethylene XXI a 65/35 joint venture between Braskem and Mexican petrochemicals maker IDESA will create more than 2 billion pounds of capacity each for PE and ethylene feedstock. That project is expected to be operational by 2015.
Most material produced by Ethylene XXI is expected to remain in Mexico, which currently imports 70 percent of its PE needs. Chammas said the Mexican plastic processing market, which numbers some 3,500 firms, is very fragmented, much like Brazil's processing field.
In addition, Braskem is considering a project that could add more than 2 billion pounds of combined PE/ethylene capacity in Peru through a joint venture with Petrobras Brazil's national oil company, which also owns part of Braskem and Petroperu, the Peruvian national oil company.
Closer to home, Chammas said Brazil's per-capita consumption of PE, polypropylene and PVC is expected to increase from less than 42 pounds in 2010 to almost 51 pounds by 2015.
Brazil's overall economy represents 55 percent of the gross domestic product for all of South America. Its economy grew at a 6.3 percent in 2010 and is expected to expand at a rate of around 4 percent per year for the near future.
Braskem, formed in 2002 from the combination of seven Brazilian petrochemicals firms, also claims to be the world's first such company to have 100 percent renewable PE and PP resins. The firm opened a 440 million-pound-capacity plant making sugar cane-based PE in 2010. It expects to open a 70 million-pound-capacity plant making a similar PP resin by 2013.
Braskem has partnered with numerous multi-national firms, including U.S. consumer products giants Procter & Gamble and Johnson & Johnson, on its green plastic efforts.
In this area, Chammas said Braskem, which now has a total of more than 13 billion pounds of annual petrochemical capacity, s benefiting from Brazil's development of its sugar-based ethanol industry. The country entered that field in 1975, in the midst of the Middle East oil embargo.
Today, more than 45 percent of vehicles on the road in Brazil can run on ethanol or conventional gasoline. Among new vehicles sold in Brazil, 90 percent meet this description. Brazil's annual ethanol use now totals more than 6 billion gallons.
In spite of that increased use of ethanol and of sugar cane as feedstocks, Chammas pointed out that sugar cane crops use less than 1 percent of all Brazil's arable land. Sugar cane use also has no impact on Brazil's Amazon forest region, since it can't be grown in that type of climate.
Braskem also hasn't lost its focus on innovation, Chammas added. The firm spent $144 million on innovation projects in 2010. The firm operates eight pilot plants and to date has been granted 260 patents, according to Chammas. In 2009, 12 percent of Braskem's resin sales came from projects launched within the last three years, he added.