INSIGHT: Brazil´s Braskem is changing to accommodate growth

11 May 2011 17:31  [Source: ICIS news]

By George Martin

Braskem display at BrasilplastSAO PAULO (ICIS)--Braskem is going through a profound transformation as a result of the company’s recent phenomenal growth, participants in the the domestic market reaffirmed on the sidelines of Brasilplast 2011 this week.

“The company has grown tenfold in a short period of time, and it is rebuilding the commercial structure, revising strategy and laying the ground work for future growth,” said Walmir Soller, a polypropylene (PP) business director with Braskem.

Braskem is well on its way to becoming a major player worldwide, with its latest acquisitions – including the absorption of last-holdout Quattor – and ongoing joint ventures far beyond Brazil’s borders.

The Quattor takeover and the acquisition of US polypropylene (PP) maker Sunoco make Braskem the world’s eighth largest resin producer, the company said last year.

Braskem and Mexico’s Grupo Idesa are working on their 1.05m tonne/year Ethlyene XXI venture at Coatzacoalcos, Mexico.

Personnel transfers and internal changes abound in the new organisation, and many positions are now redundant, according to former Braskem employees and would-be employees who were left out in the shuffle.

But one of the main challenges ahead for Braskem is finding its proper place in a domestic market where some transformers lament the lack of alternatives, and complain about being unable to compete with imported finished products now proliferating in the Brazil.

Braskem is seen by many as a monopoly, a label the company will need to overcome by proving that a sole polyolefins producer can be a good thing for everyone.

This comes at a time when margins are threatened by seemingly ever-rising feedstock prices and by mounting difficulties in transferring costs downstream.

Few will bet against the Brazilian giant, which has accomplished so much in such a short period of time, but for some, the changes are just starting. Stay tuned.

A strong presence at Brasilplast

Braskem is making its mark this week at the Brasilplast trade fair.

Among other things, the company introduced 16 new products, including eight
polyethylene (PE) and eight polypropylene (PP) products to provide new options for the automotive, packaging, food and other sectors.

Braskem also announced plans to establish its first office in Singapore this month,  and even unveiled a children’s book to encourage recycling.

The company lamented Brazil’s infrastructure woes as an obstacle to growth of the nation’s polyvinyl chloride market. and noted its growing resin shipments to Chile

Brasilplast is a major trade fair for the plastics industry in South America, and is organised and promoted by Reed Exhibitions Alcantara Machado, a joint venture between Reed Exhibitions and Alcantara Machado.

Brasilplast runs from 9 to 13 May.

For more on Braskem visit ICIS company intelligence

By: George Martin
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