Brazil Braskem raises forecast for resin demand growth

09 August 2013 20:47  [Source: ICIS news]

MEDELLIN (Colombia)--Braskem has raised its forecast for domestic thermoplastic resin demand growth in 2013 on the back of a solid second quarter, the Brazilian petrochemical giant said on Friday.

“We had a 5% figure – we are now thinking of something between 7% and 8%,” said Braskem chief executive officer Carlos Fadigas in a conference call with investors.

Fadigas pointed to strong growth in the agribusiness, automotive and infrastructure sectors that had helped push resin demand to 1.4m tonnes, a 10% increase compared with the first quarter.

The company’s own domestic sales of resins increased by 3% from the previous quarter to 947,000 tonnes, accounting for 66% of total market share – five percentage points down from the first quarter.

Fadigas described the company’s second quarter results as “strong”, with net revenue increasing by 6% year on year to Brazilian reais (R) 9.5bn ($4.2bn, €3.2bn), and earnings before interest, tax, depreciation and amortisation (EBITDA) up 24% to R1.05bn.

The 94% capacity utilisation of Braskem’s crackers during the quarter was “the best performance in four years”, Fadigas said. The rate was helped by a government initiative that reduced tax rates for raw material purchases in the chemical sector.

“That added to the competitiveness of the whole sequence – the crackers and the polyethylene, polypropylene and polyvinyl chloride lines,” he said.

“On the other hand, a lot of things have to come together to run at 94%,” the director said, showing caution in suggesting that this rate could be maintained in the remaining quarters. “I will be a little bit more conservative – I think something between 90% and 94% would be more feasible for the third quarter.”

Fourth quarter capacity would be impacted by planned maintenance on the company’s cracker unit in Bahia, northeast Brazil, at the end of September, Fadigas said.

The stoppage, which is scheduled every 6 years, would last for about 40 days and temporarily reduce the cracker’s 1.2m tonne capacity by 50%, he said.

($1 = €0.75, $1 = R2.28)

By: Simon West

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