APLA '10: New Momentive Brazil plant to reach full capacity early

08 November 2010 23:22  [Source: ICIS news]

RIO DE JANEIRO (ICIS)--Momentive Specialty Chemicals' new plant in Brazil will likely reach full capacity before expectations because of fast growth in the nation's construction industry, a company executive said on Monday.

Momentive opened the plant this year in Montenegro, Rio Grande do Sul. It has a capacity of 450,000/year of phenol and urea-formaldehyde resins.

The new plant helped Momentive increase its Brazilian market share to 50%, said Cicero da Silva, Latin American vice president of the company's forest products division.

Silva was speaking on the sidelines of the Latin American Petrochemical Association (APLA) annual meeting.

Two years ago, the market share was 30%, he said.

"We had a great start-up," Silva said.

Momentive now expects its investment to pay off earlier than expected, he said.

The plant is performing well in part because its product is used to make wood board, he said. Wood board, in turn, is used in the construction industry, which is growing along with the Brazilian economy.

In general, the wood-panel market grows by at least twice the speed of a nation's economy, Silva said.

The International Monetary Fund (IMF) expects the Brazilian economy will grow by 4–4.25% a year in 2011–2015.

In addition, the World Cup and the Olympics will both be held in Brazil, which should further boost demand.

Also, while Dilma Rousseff was campaigning for president, a key part of her platform was continuing a programme intended to build 5m houses, Silva said.

So far, 1m of the houses have been built, he said. Since Rousseff won the election, the programme will likely continue.

Momentive operates another urea-formaldehyde plant in Curitaba, Parana, in Brazil.

Momentive used to be called Hexion Specialty Chemicals.

The APLA meeting lasts through Tuesday.

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By: Al Greenwood
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