NPRA ’08: Brazil petchem consolidation continues

31 March 2008 23:14  [Source: ICIS news]

By George Martin

SAN ANTONIO, Texas (ICIS news)--The consolidation of Brazilian petrochemicals will stabilise and strengthen the industry when completed, but still faces some difficulties, Rui Chammas, Braskem polypropylene (PP) business director said on Monday.

The growing presence of Petrobras in the petrochemical business will support the sector and will better project the Brazilian companies outside Brazil to secure a bigger role in the region, Chammas said at the 33rd National Petrochemical & Refiners Association (NPRA) meeting.

A year ago Braskem announced the acquisition of Ipiranga in a three-way deal involving Ultra, Petrobras and Braskem.

Although some minor hurdles are still to be worked out in 2008, the acquisition has proceeded without significant difficulties. The end of the negotiations will leave Petrobras with 25% of Braskem.

Another group of Brazilian companies is currently negotiating a merger in which Petrobras will also be a major player.

Marco Antonio Quirino, managing director of Rio Polimeros, said the wave of negotiations between Unipar and Petrobras was headed towards a pre-determined result that would leave Unipar with 60% of Companhia Petroquimica do Sudeste (CPS), while Petrobras will have the remaining 40%.

CPS currently encompasses Unipar, Polietilenos Uniao, PQU, Riopol and Nova, formerly known as Suzano.

The CPS name is a temporary one to describe the conglomerate until a new name is selected, Quirino said.

Some milestones in these negotiations have already been achieved, such as the 100% ownership of Suzano by Petrobras, which paved the way to bring PQU and PU to the table.

But much lies ahead as these companies go beyond the legal frameworkts and start the merging process, Chammas said. In this respect, the Braskem group is a few years ahead of them, he added.

Petrobras' interests go beyond the ownership of some petrochemical assets, Chammas said.

Petrobras needs to get solid partners to build the Comperj (Complexo Petroquimico do Rio de Janeiro) project to extract more value from its new oil discoveries.

Comperj will refine 150,000 bbl/day of heavy crude when comes on stream in 2012-2013, said Jose Lima de Andrade Neto, president of Petroquisa, a subsidiary of Petrobras in a recent industry event.

When the project is complete, Comperj will group a basic petrochemicals unit and a series of downstream units to produce products such as styrene, ethylene glycol, polyethylene (PE), and polypropylene (PE).

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By: George Martin
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