Brazil: Braskem is committed to distribution

21 March 2014 10:03  [Source: ICB]

Brazil’s petrochemical giant Braskem is fully committed to the chemical distribution market in Brazil and Latin America to reach smaller customers and develop new products and solutions.

The chemical distribution market has made great progress in the region over the past decade, according to Isabel Figueiredo, commercial director for basic petrochemicals for Braskem. “There has been a huge and positive change in the chemical distribution market over the past 10 years with major consolidation among local players as well as multinational players buying out Brazilian companies,” says Figueiredo.

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“This has been good for our country and markets, as these companies are much more professional now, taking on more responsibility in safely transporting products,” she adds. Chemical distributors that are members of Associquim (Brazil’s trade association for chemical and petrochemical distributors) have adopted PRODIR – a Responsible Distribution Process with third-party verification. This is one of the many important achievements of Associquim under Rubens Medrano’s outstanding leadership.

GLOBAL PLAYERS INVEST IN BRAZIL

Global distribution players have increased their presence in the Brazilian market over the past several years through acquisitions. In September 2013, Netherlands-based IMCD Group acquired a majority stake in distributor Makeni, marking its entry into Brazil and Latin America. US-based Univar also entered the Brazilian market with the acquisition of Arinos Quimica in 2011, and is bringing its global expertise and capabilities to the market, leading to higher standards. Figueiredo expects more mergers and acquisitions (M&A) in Brazil’s distribution market, although she says most of the consolidation has been done.

Isabel Figueiredo

“Of course US shale gas has hurt the PE business, but we have seen quite the opposite in aromatics, butadiene and propylene

Isabel Figueiredo
Commercial director, basic petrochemicals, Braskem

Braskem views the chemical distribution market as a critical part of its commercial operations. “This is a very important market for Braskem – about 52% of our solvents are sold through distributors. We count on them to distribute our products well, and develop small customers. They are the face of Braskem to the market and to the smaller customers that we cannot reach,” explains Figueiredo.

Braskem has a majority stake in Brazilian chemical distributor QuantiQ, which operates as an independent company. “QuantiQ brings us good results but it is treated by Braskem as any other distributor – like a separate company,” says Figueiredo. “They are Braskem’s most important distributor in terms of ­volume and they distribute most of Braskem’s products, but we also sell through other strategic ­distributors.”

She adds: “Distributors are very important to Braskem because we cannot reach smaller customers on our own and count on distributors to deliver product in a safe way. We also need them to support us in developing new blends, products and solutions to our customers.”

For Brazil and Latin America’s chemical market, Figueiredo sees slight growth in 2014 after a reasonable 2013 where growth was within expectations. “This year we are hopeful that there will be some growth. But we think 2015 and beyond will be much better for Brazil and Latin America,” she says.

While low cost US shale gas has impacted businesses such as polyethylene (PE) in Brazil with increased competition, other products have actually seen rising margins. “Of course US shale gas has hurt the PE business, but we have seen quite the opposite in aromatics, butadiene and propylene, as shale gas does not produce these products,” notes Figueiredo. “The more these products become scarce in the US, the more the price will tend to go up in the coming years.”


Author: Joe Chang



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