23 September 2013 00:00 [Source: ICB]
The rankings remain the same, but Mexichem is making a surge with acquisitions. The future will depend on increased production of oil and gas in the region.
The Latin America leaders ranking remained the same based on 2012 sales, with Brazil’s Braskem continuing to dominate with $17.3bn (€13.1bn) in sales – more than double the $7.4bn in sales of Mexico’s Alpek, part of Grupo Alfa and #2 in the rankings. Both saw sales growth in local currencies, but the weakness of the Brazilian real in 2012 muted growth in US dollar terms while Alpek received a boost from the strong Mexican peso versus the US dollar.
But the real standout in the rankings was Mexichem, the leading producer of polyvinyl chloride (PVC) in Latin America.
The company has undertaken a major acquisition spree in the past few years, which fuelled a 34% jump in sales in local currency terms. And the impact of the strong peso versus the US dollar in 2012 boosted sales in dollar terms by 44% to $4.9bn, further solidifying its #3 position.
Mexichem is planning a joint venture with US-based Occidental Chemical to build a 544,000 tonne/year ethane cracker at Occidental’s existing site at Ingleside, Texas, US. The ethylene produced would be used to make ethylene dichloride (EDC) and then vinyl chloride monomer (VCM) at the site. The VCM would then be shipped to Mexichem’s PVC facilities in Mexico and Colombia.
The company also completed a major VCM joint venture with Mexico’s state-owned energy and chemical company Pemex. The venture plans to significantly raise capacity in Mexico.
Mexichem has continued its acquisitive ways in 2013 with the $250m buyout of US-based PolyOne’s vinyl dispersion, blending and suspension resin assets in May.
Brazil’s Braskem is focusing on gas-based investments in the petrochemical sector. In that respect, it is progressing the Ethylene XXI project – a 75:25 joint venture with Mexico’s Grupo Idesa to build a 1.05m tonne/year ethane cracker and downstream polyethylene (PE) facilities in Coatzocoalcos, Mexico. The project is scheduled to start up in mid-2015.
In Brazil, the long-delayed Comperj petrochemical project, which was supposed to the largest chemical project in Latin America, has yet to get the green light.
Braskem has been negotiating with state-operated energy producer Petrobras to secure supplies of ethane for a cracker. The ethane would come from the offshore oil and gas fields in Brazil’s massive pre-salt formation.
Latin America’s petrochemical future will indeed depend on increased production of hydrocarbons for feedstocks. In addition, Mexico’s proposed energy reforms could go a long way in boosting investment and production in the coming years.
Brazil’s pre-salt crude oil and natural gas deposits are huge, but it remains to be seen if they can be developed effectively.
Argentina is attempting to revive its oil and gas production after nationalising energy company YPF from Spain-based Repsol. It has a preliminary deal with US-based Chevron to develop reserves, but increased production appears to be a long way off.
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