ORLANDO, FLA. (April 5, 6:35 p.m. ET) — Brazilian resins giant Braskem SA is seeing continued growth with its sugar-based Green polyethylene ad also is advancing with joint venture expansion plans in Mexico.
As if that wasn't enough, the Sao Paulo-based firm also is dealing with a polypropylene feedstocks supply issue while digesting the purchase of two separate PP businesses.
Green PE “is a very interesting niche product,” Braskem America chief executive officer Fernando Musa said in an interview at NPE 2012. “It's been sold mostly into packaging markets. There's a lot of demand in Asia, but demand in North America is growing as well.”
Braskem's initial 440 million pound-capacity plant in Brazil already is operating at more than half of capacity, and the firm is studying a second plant there as well. A pilot plant making sugar-based Green PP also is in the works.
In Mexico, construction has begun on Ethylene XXI, a massive joint venture that when completed will have more than two billion pounds of annual capacity for high density and low density PE and a similar amount of capacity for ethylene feedstock. The project – a JV between Braskem and Mexican conglomerate Grupo Idesa SA de CV – is expected to create 3,000 permanent jobs.
Ethylene XXI is set to be operational in mid-2015, but Musa said that officials “are trying to make it sooner.”
Braskem's big splash into the North American PP world has come in the last two years, when it's bought the PP businesses of Sunoco Inc. and Dow Chemical Co., immediately making Braskem one of North America's largest PP makers.
But that status hasn't come without its challenges, since volatility in supplies of propylene monomer have sent PP pricing haywire, causing processors to look at other materials in some cases. On top of that, Braskem was dealt a blow when Sunoco in December closed a gasoline refinery in Marcus Hook, Pa., that had been supplying the Braskem PP plant there with propylene.
Braskem America commercial and supply vice president Robert Nadin said the situation in Marcus Hook isn't as dire as it first appeared. Although Sunoco was the plant's largest propylene supplier, it never supplied even half of the plant's needs. Since the refinery closed, Braskem already has been contacted by several suppliers looking to fill the plant's propylene requirements, Nadin said.
Longer-term, Nadin said that North American PP demand growth should rebound and average 2-3 percent for the next several years. “We'll see strength in segments like automotive and packaging, where polypropylene is the material of choice,” he added.
Musa added that the amount of on-purpose propylene being made in North America “should increase drastically in just the next three years, which should improve the supply situation and hopefully reduce price volatility. He said Braskem currently has no plans to enter into on-purpose propylene production.
Braskem materials are being run by several companies at NPE 2012, including:
* Bekum America Corp. blow molding bottles using Green PE in Booth 2163.
* Davis Standard running Green PE on a cast film line in Booth 5945.
* BMB Spa injection molding high melt flow PP in Booth 323.
* Boy Machines Inc. molding PP in Booth 2819, demonstrating high clarity for eye glass frames.
* Milacron LLC is running clarified random copolymer PP to produce houseware lids in Booth 2803.