Braskem Mulling U.S. Cracker
Apr19

Braskem Mulling U.S. Cracker

Braskem’s new CEO Carlos Fadigas held a press roundtable at the New York Stock Exchange. Here are the main themes: 1) Braskem is considering building an ethylene cracker and polyethylene plant in the U.S. Mr. Carlos said he wants to tap into U.S. shale resources. He also reiterated Braskem’s designs to make an acquisition in the U.S. (I haven’t heard them say that for a while.) I’ll likely write a feature story on Braskem in an upcoming issue, so I don’t want to taint my objectivity. That said, I really can go either way on this. On the one hand, with its Sunoco and Quattor integrations and projects in Mexico and Peru, as well as other expansions and plans at home in Brazil, Braskem as a lot on its plate. (Also it would have two new crackers in the NAFTA region, counting Mexico.) A U.S. cracker is a tall order. On the other hand, Braskem is not to be underestimated. And Braskem executives have always struck me as capable. Moreover, Fadigas used to be CEO of Braskem Americas, where he oversaw the Sunoco acquisition. Finally, Braskem has polypropylene plants in West Virginia and Pennsylvania. So it is nicely positioned in the Marcellus region. 2) I pressed Mr. Carlos on whether he would build a plant in the U.S. without having an existing polyethylene business in the U.S. He acknowledged that it would be nice, though not necessary, to have such a presence. After the conference, we discussed how it is hard finding a polyethylene acquisition in North America nowadays because of all the interest in U.S. gas. He said he was willing to spend a little more than he would have a few years ago. I think we have a good candidate for Dow’s HDPE/PP business. Though, I doubt we’ll see Dow sell that until it wraps up its arbitration with PIC of Kuwait. The Dow business might be a little steep for Braskem, but I think it would find a way to make that happen. Don’t forget that we would likely be talking about a JV here, so Braskem would only have to buy half the business. 3) Braskem is interested in participating in Comperj, the proposed Petrobras refinery and petrochemical complex in the state of Rio de Janeiro. No surprise there. However, Mr. Carlos indicated it would invest in a gas-based ethylene cracker and polyethylene complex. This is a big detour from how the complex was originally conceived. It was supposed to be a high-severity fluidized catalytic cracker that would convert heavy oil directly into ethylene and propylene and onto derivatives. We are seeing the mitosis of...

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Braskem To Make Propylene From Ethanol
Oct29

Braskem To Make Propylene From Ethanol

Brazil’s Braskem is taking another step in its efforts to derive chemicals from sugar cane. In September, it started up production of a 200,000-metric-ton plant in Brazil to make ethylene for subsequent conversion into  “green“ polyethene. Now the company plans to invest $100 million to make 30,000 metric tons per year of propylene from ethanol by the end of 2013. The company will use the propylene to make polypropylene that will have same properties as conventional hydrocarbon-derived propylene. Late last year, Braskem signed a deal with Novozymes to develop a biotech route to propylene. However, the 30,000-metric-ton plant will not be based on this technology. At a press conference at the K 2010 plastics fair, the company called the plant‘s technology “proprietary“ and would give few details. However, a possible route that company officials have alluded to in the past is to use ethanol derived ethylene to make butylene, and then through metathesis, convert ethylene and butylene into propylene. The cost of the plant is staggering for a what amounts to semi-works scale production of polypropylene. However, Rui Chammas, executive vice president for polymers at Braskem, says that bio-based polymers have a completely different value proposition than regular polymers. “We are not in competition with fossil polymers,“ he says. He is also quick to add that 70% of the output from the polyethylene is already under contract. Manoel Carnauba Cortez, vice president of Braskem’s based chemical unit, says the company also has its its sights set on another ethanol derivative, ethylene glycol. “We may be an ethylene supplier for EO production in the near future,“ he said. There is strong interest in bio-based ethylene glycol. Coca Cola is beginning to use ethylene glycol as a co-monomer in its PET bottles, likely sourced from Asia. Japanese trading firm Toyota Tsusho, which incidentally is a green polyethylene distributor for Braskem, recently formed a Taiwanese joint venture to make ethanol-based ethylene...

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