Brazil Braskem to avoid ethanol volatility as it uses it for PP

30 June 2011 19:20  [Source: ICIS news]

SAO PAULO (ICIS)--Brazil’s Braskem has the means to avoid strong price swings in ethanol as it prepares to develop its new renewable polypropylene (PP) plant, a company spokesman said on Wednesday.

“Braskem maintains regular long-term contracts with some 10 ethanol suppliers in order to guarantee supplies of the product, and we have deals established to reduce price volatility as time goes by,” said Braskem spokesman Nelson Letaif in Portuguese.

However, according to Letaif, details of those measures may not be revealed because of confidentiality agreements.

Braskem’s ethanol-derived PP plant is expected to begin operating in the second half of 2013 and will cost $100m (€69m), according to the company.  

The unit would have an initial production capacity of 30,000 tonnes/year of PP. However, Braskem said it could increase the capacity of the plant to 50,000 tonnes/year.

The exact location of the facility has not been decided, the company added.

According to Braskem, the new unit would increase the company’s demand for ethanol to 800m litres/year.

In 2011, Braskem expects to use 700m litres/year of ethanol - 3% of the country's total production projected for 2011 - which puts Braskem as Brazil's top ethanol buyer for industrial use, according to industry data.

Meanwhile, domestic ethanol production continued to drop by nearly 30% year on year since the start of the sugarcane harvest in April, according industry association Unica.

($1 = €0.69)

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