Brazil agency approves Dow, Braskem PP deal over Abiplast protest

08 February 2012 16:04  [Source: ICIS news]

HOUSTON (ICIS)--A Brazilian antimonopoly agency approved Dow Chemical's sale of four polypropylene (PP) plants to Braskem, despite the protests of the nation's plastics trade group, a report said on Wednesday.

The agency, the Conselho Administrativo de Defesa Economica (Cade) unanimously approved the deal without restriction ­ despite a request by the trade group Abiplast to veto it, according to a report by the Agencia Estado, a news agency of the Brazilian newspaper, O Estado de Sao Paulo.

Under the deal, Dow will sell two German plants and two US plants to Braskem. The acquisition, worth $340m (€258m), had already closed last year.

In defending the deal, Cade official Marcos Verissimo said the deal would have a negligible effect on Brazil's domestic market, given the relative size of Dow's exports to the country, Agencia Estado reported

As such, Verissimo said there was no visible concerns about the Dow and Braskem deal restricting the nation's market, as reported by Agencia Estado.

Braskem's acquisition of the four Dow plants concerns Brazilian processors because they increasingly rely on imports, given both the demand in the market and the relatively high prices for domestic resin.

If Braskem acquires four outside plants, processors worry that it would give them fewer alternatives for supplies.

The Brazilian chemical trade, Abiquim concluded that the nation's industry is quickly becoming less competitive. In 2011, imports grew by nearly 25% year on year.

Apparent consumption of chemical products for industrial use grew by 9.68% in 2011 compared with the previous year, but the January-December period of 2011 shows a 3.83% decline in production, and a 4% reduction in domestic sales compared with 2010 figures, Abiquim said.

Additional reporting by George Martin and Leo Siqueira

($1 = €0.76)


By: Al Greenwood
+1 713 525 2645



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