By Anna Jagger/London
Brazil’s chemical sector is better positioned than most to weather the financial slump. Producers were hit badly by the collapse in global demand at the end of last year, but they have reason to be optimistic about the year ahead. There are signs that domestic chemical demand is picking up, helped by government investment in infrastructure projects and a growing middle class.
Following a contraction this year, the Brazilian economy is expected to rebound in 2010. Some Brazilian economists are predicting GDP growth of 4.5%.
The country, which is the world’s 10th-largest economy, is already self-sufficient in oil, and new hydrocarbon discoveries should improve the availability of petrochemical feedstocks in the long term. The discoveries will complement already available feedstock from the Campos Basin, which will feed a major new refinery and petrochemical complex in Rio de Janeiro (see page 18).
Another reason for optimism is the untangling of the Brazilian chemical industry’s complicated ownership structure to create two large players: Braskem and Quattor. Braskem CEO Bernardo Gradin is cautious about predicting a recovery, but says the company is progressing on new projects in Latin America, and will explore opportunities in the US. A US production base would help Braskem become a truly global player.
A US production base would help Braskem become a truly global player.