Top 10 chemical companies in Latin America

17 September 2010 17:46  [Source: ICB]

Our breakdown shows just how badly companies have been hit by the global economic downturn

Welcome to the second part of the ICIS Top 100 listing where we focus on emerging markets. Few chemical companies were immune from the worst economic crisis in a generation. Indeed, many regional players were hit particularly hard in 2009, as domestic demand collapsed and export markets faltered.

For full footnotes plus extra financial information such as capital expenditure see the main ICIS Top 100 listing

 

BRASKEM LEADS LATIN AMERICAN RECOVERY

Brazil's strengthening economy enabled Braskem, Latin America's largest chemicals producer, to return to profitability last year. Brazil has recovered from the global crisis faster than most other economies, and the country's GDP is expected to grow by 7% in 2010. Sao Paulo-headquartered Braskem has indicated that it expects the Brazilian resins market to grow by 10% in 2010, led by the polyvinyl chloride (PVC) segment.

Braskem strengthened its position as the region's leading producer earlier this year by merging with Brazilian rival Quattor and acquiring the polypropylene (PP) business of the US's Sunoco Chemicals. The company says the two initiatives, completed in April 2010, combined with overseas investments, will help it achieve its target to become one of the world's five largest petrochemical companies by 2020.

Braskem is investing in a major project in Mexico, named Ethylene XXI, and is also pursuing projects in Venezuela and Peru. In Brazil, the company is starting up a new 200,000 tonne/year "green" ethylene plant, based on sugarcane ethanol at its Triunfo site in Rio Grande do Sul. The company intends to become a world reference on renewable source chemistry, and could produce petrochemicals from different renewable resources, says Jorge Buhler of US-based Polyolefins Consulting.

Braskem will use the ethanol-based ethylene to produce "green" polyethylene (PE) at an existing plant at Triunfo. The company has established a series of partnerships with clients, including global consumer products company Procter & Gamble and Japanese cosmetics manufacturer Shiseido. According to Buhler, Braskem has already identified potential demand for "green" PE of 600,000 tonnes/year, three times the capacity of the new plant.

Mexican petrochemical and synthetic fibers producer ALPEK has climbed to second place in the ranking of Latin American chemicals companies. ALPEK, which is part of industrial group Alfa, achieved record earnings before interest, tax, depreciation and amortization (EBITDA) in 2009, aided by stable demand for its core products and lower expenses, including energy costs. The business achieved further improvements in the first quarter (Q1) of this year, aided by improved conditions in the North American petrochemicals sector.

Mexico's chemicals sector showed signs of recovery in Q4 2009, following an extremely difficult 12 months, observes Raul Arias, a consultant with US-based Nexant. "The first quarter of 2010 provided reasons for optimism, when year-over-year GDP change was above 2%. The positive mood remained, despite a slowdown in growth reported in [Q2]," he says.

Progress on Mexico's Ethylene XXI project has contributed to the positive mood, notes Arias. The project, a joint venture between Braskem and Mexican partner Grupo IDESA, will be Mexico's first large-scale petrochemicals project in 20 years. Located in Coatzacoalcos, Veracruz, the plant will produce 1m tonnes/year each of ethylene and PE and is due to start up in 2015.


By: Anna Jagger
+44 20 8652 3214



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