Brazil Oxiteno sees continued growth in Q1 2014

21 February 2014 23:52 Source:ICIS News

MEDELLIN, Colombia (ICIS)--Brazil-based ethylene oxide (EO) and surfactants producer Oxiteno’s earnings and specialty chemical sales volumes will continue to grow at a steady pace during the first quarter of 2014, an executive for Oxiteno’s parent company, Ultrapar, said on Friday.

Oxiteno’s earnings before interest, taxes, depreciation and amortisation (EBITDA) in Q4 totalled Brazilian reais (R) 107m ($45m), up by about 47% from R73m in the prior-year quarter, mainly due to the depreciation of the real and a more favourable sales mix.

And despite a 4% year-on-year drop in consolidated quarterly sales volumes, mainly due to lower sales of glycols, Ultrapar said that sales of specialty chemicals increased by 6% – or 10,000 tonnes – as a result of recent investments in capacity expansion.

“We see in this quarter the same trends that we saw in the fourth quarter,” said Ultrapar chief financial officer Andre Covre during a conference call with investors.

“Therefore we expect speciality volumes and EBITDA to grow at a similar pace as seen in the fourth quarter,” he said.

Ultrapar said that in 2013 it invested R139m in Oxiteno, mainly directed to the expansion of ethoxylation production capacity at the company’s plants in Pasadena, Texas in the US and in Coatzacoalcos, Mexico.

The conglomerate plans to invest some R244m in its chemical division in 2014, with R161m earmarked for the conclusion of capacity expansion in Coatzacoalcos and potential capacity expansion in Pasadena.

The expansion in Mexico is expected to be operational this year, Ultrapar said, and will add 30,000 tonnes/year of production capacity.

Oxiteno is the sole producer of EO in Brazil and the largest producer of specialty chemicals in Latin America, according to Ultrapar’s website.

The industrial conglomerate also owns fuel distributors Ipiranga and Ultragaz, liquid bulk storage firm Ultracargo and the recently acquired drugstore chain Extrafarma.

By Simon West