UpdateBraskem touts location, feed advantage in Sunoco deal

01 February 2010 18:45  [Source: ICIS news]

(adds updates thoughout)

HOUSTON (ICIS news)--Brazilian petrochemicals maker Braskem on Monday touted its acquisition of Sunoco Chemicals, saying the company’s feedstock advantages make it one of the most competitive polypropylene (PP) producers in the US.

Braskem said Sunoco has a leg up on most of its PP rivals because two of its plants are located outside the US Gulf region, which allows them to buy refinery-sourced propylene at a discount.

Sunoco has plants at Marcus Hook, Pennsylvania, and Neal, West Virginia, and La Porte, Texas, with combined PP capacity of 950,000 tonnes/year, or roughly 13% of installed US PP capacity, according to the company.

The feedstock advantage stems from reduced logistics costs, said Braskem’s vice president and chief financial officer Carlos Fadigas, adding that 60% of US refineries are located outside the US Gulf area.

Sunoco has 70% of its feedstocks on contract and relies on the spot market for the remaining 30%, the executive said.

According to Braskem, PP is among the fastest growing thermoplastic resin markets in the world.

The company quoted industry projections calling for PP demand in the US to grow by around 1.3-1.7 times the growth of the US gross domestic product (GDP).

Braskem said Sunoco is the fourth-largest PP producer in the US, making it a top player in the world’s largest PP market.

($1 = €0.72)

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By: William Lemos
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