09 January 2013 23:33 [Source: ICIS news]
LONDON (ICIS)--US-based Dow Chemical and Japan's Mitsui have postponed the second phase of a joint venture to construct a $1.5bn (€1.14bn) sugarcane-based ethylene and polyethylene (PE) production facility in southeast Brazil, Dow said on Thursday.
The 50-50 joint venture was formed in 2011 and operations at the Santa Vitoria plant were due to begin in the second quarter of 2013.
Dow said the postponement was mainly due to increasing operational costs and uncertainties connected to land ownership in Brazil.
“The Santa Vitoria project is of high strategic importance for Dow and Mitsui,” said a spokeswoman for Dow.
“The two companies are working together to resolve the current difficulties and will continue with the second phase of the project as soon as possible,” she said.
The first phase of the project, which includes the expansion of sugarcane plantations and the construction of an ethanol facility, remained on schedule, Dow said.
The companies currently cultivate 20,000 hectares of sugarcane and expect to process the first full sugarcane harvest in 2014, the company said.
($1 = €0.76)
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