23 June 2010 19:57 [Source: ICIS news]
SAO PAULO (ICIS news)--Brazil’s petrochemical major Braskem signed a contract with Brazil ethanol firm Cosan to purchase 175m litres/year of sugarcane-based ethanol for use in its “green” polyethylene (PE) plant, a company spokesman said on Wednesday.
Cosan confirmed the value at Brazilian real (R) 1bn ($565m).
“Cosan will supply Braskem with 175m litres/year of hydrated ethanol during 5 years,” Braskem’s spokesman Nelson Letaif told ICIS news in Portuguese.
Letaif did not confirm the value of the contract.
“I confirm the R1bn figure, which is an approximate value calculated based on the price of ethanol in the local market, which could suffer changes,” said a Cosan spokesperson who did not want their name used.
Under the deal, Cosan would supply industrial ethanol to Braskem's Triunfo plant in the state of Rio Grande do Sul. The company said it would start supplying in August.
“The deal acknowledges that ethanol is a part of the solution for the development of an economy based on low carbon measures,” Cosan’s ethanol sales director Mark Lyra said in a statement.
Shares of Cosan were up over 1% at Sao Paulo stock exchange BOVESPA.
Braskem said it planned to process around 700m litres/year of ethanol at its Triunfo complex to produce "green" polyethylene at the unit, scheduled to begin production by September.
Braskem’s PE plant had investments of around R500m and should have the capacity to produce 200,000 tonnes/year.
($1 = R1.77)
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