Having consolidated all of Brazil's polyethylene and polypropylene production under one corporate banner — and establishing a PP beachhead in North America as well — Braskem SA now is trying to improve the overall quality of the Brazilian plastics market.
“We're taking responsibility to support the whole value chain,”Rui Chammas, polymers vice president, said in an interview at Brasilplast, held May 9-13 in São Paulo. “There will be a very competitiveplastic chain in Brazil in the future.”
São Paulo-based Braskem — a joint venture between Brazilian construction giant Odebrecht SA and Petrobras, the Brazilian nationalnoil company — completed those first two actions last year. It first acquired Quattor Petroquímica SA, its only remaining national competitor in PE and PP — and then bought the North American PP business of Sunoco Inc., which consisted of three U.S. plants and a research center.
But the firm isn't resting on its laurels. Chammas said it's now important for Braskem to be able to supply enough raw material to allow the Brazilian market to continueto grow. That growth has been electric as Brazil's middle class has blossomed. Brazil consumed just over 9 billion pounds of plastic resin in 2005, but by 2010, that number had soared to more than 13 billion pounds. The amount of resin consumed per capita also increased from less than 51 pounds to almost 70 pounds in that same time frame.
To better meet this demand, Chammas said that Braskem also is looking to reorganize the product mix at its 31 resin plants in an attempt to reduce the number of grades produced at each plant. A series of debottleneckings also could increase potential capacity throughout the company, he added.
“We now have the scale to compete and invest in [research and development] and plan for organized growth,” Chammas said.
Already, Braskem has confirmed plans to add 400 million pounds of PVC capacity in Brazil by 2012. It's also moving forward with Ethylene XXI, a joint venture with Mexican petrochemicals maker Groupo Idesa SA de CV that will add 2 billion pounds of capacity for PE and ethylene feedstock in Mexico by 2015.
Braskem's scope within Brazil is remarkable to behold — especially considering the firm is only 9 years old. It first came together in 2002 when Odebrecht and Mariani Group combined six smaller Brazilian etrochemical firms. It made three more acquisitions between 2006 and 2009 before the Quattor deal last year. All of these moves came after the Brazilian government privatized the country's petrochemical industry — which previously had been largely state-run — in the 1990s.
The firm now operates a total of 33 billion pounds of annual capacity of PE, PP and PVC, as well as caustic soda, ethylene, propylene and related products. In PVC, Braskem's only competitor with production in Brazil is Solvay Group.
In 2010, Braskem rang up sales of $19.7 billion, up 36 percent from 2009. A 2010 profit of $1.9 billion was more than four times the firm's 2009 total. PE sales for 2010 checked in at 5.5 billionpounds, with PP sales at 5.3 billion pounds and PVC sales at 1.1 billion pounds. At Brasilplast, Chammas said that Braskem is working closely with its customers “to get the [supply] chain as strong as possible.” Braskem's connection to Petrobras also is important from a raw material standpoint, he added.
“Brazil already is exporting crude and investing to extract more oil,” he said. “The plastic chain can be derived from this resource.”
Chammas declined to comment on media reports that Braskem might be looking to invest in an ethylene cracker in North America, as a means of taking advantage of newfound supplies of natural gas in the region.
“We've got nothing solid to say” about a cracker investment, he said. “But like any other company, we'll look for pportunities for growth. We're committed to the industry.”
Braskem also has drawn a lot of attention for its 440 million-poundcapacity, sugar cane-based PE plant that opened last year in Brazil. The “green” PE plant is believed to be the world's largest bioplastics facility. Braskem has followed up that initiative with plans to open a 70 million-poundcapacity pilot plant making PP by similar methods by 2013. Chammas said that if the “green” PP product succeeds, there's a chance that plant could be ramped up as well.
And there's no doubt that Chammas and other Braskem officials understand the opportunity they have by being the major commodity resin supplier to such a fast-growing market.
“The main attraction of Brazil is the local market of almost 200 million people,” he said. “There's been a reduction in the number of families in the poorer class and an increase in products produced in Brazil.”