Brazil’s Ultrapar eyes expansion opportunities in US

09 November 2012 22:26  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Brazilian fuel distributor and specialty chemicals producer Ultrapar said on Friday that the US is central to the company’s future expansion plans, and the company is currently eyeing a number of opportunities in the region.

“Current demand exceeds our ability to supply to the US,” said Ultrapar’s chief financial officer Andre Covre during a conference call with investors.

“This high demand, coupled with current shale gas potential, means opportunities in the US are huge,” he said.

Ultrapar’s recently announced $92m (€72m) of investments for the expansion of 100,000 tonnes/year in production capacity of the company’s specialty chemical subsidiary Oxiteno in the US and Mexico.

Ultrapar said that investments totalling $5m would be made in 2012.

Earlier this year, Oxiteno had acquired a specialty-chemicals plant in Pasadena, Texas, for $15m. It plans to spend $15m more to retrofit the plant so it can make Oxiteno's line of specialty surfactants.

The plant has a capacity of 32,000 tons/year, and operations should start in 2013, Oxiteno said.

At the time when Oxiteno announced the acquisition, the company said it would use the infrastructure at the Pasadena site as a platform for more expansion in the US, which is the largest surfactants market in the world.

Oxiteno is also the only Brazilian producer of ethylene oxide (EO), ethylene glycol (EG), ethanolamines, glycol ethers and methyl ethyl ketone (MEK).

Late on Thursday, Ultrapar reported third-quarter net earnings of Brazilian reais (R) 291m ($143m), up 29% year on year.

Third quarter net revenues totalled R14bn, up 9% year on year, Ultrapar said.

Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at R647m, up 21% year on year.

Oxiteno posted sales revenues of R795.9m, up 27% year on year. Higher sales volumes were attributed to increased production capacity, Ultrapar said.

Ultrapar also owns fuel distributors Ipiranga and Ultragaz as well as Ultracargo, a storage subsidiary.

Additional reporting by Al Greenwood

($1 = €0.78)
($1 = R2.04)

By: Simon West

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