Synthos moves ahead with Brazil plant despite BD supply hurdle

23 July 2014 18:36 Source:ICIS News

LONDON (ICIS)--Poland's Synthos said on Wednesday it was continuing to move forward with its project to construct a neodymium polybutadiene (Nd-PBR) rubber plant in Brazil despite not yet having guaranteed butadiene (BD) feedstock for the installation.

The company had announced plans to build an 80,000 tonne/year Nd-PBR plant at the Triunfo Petrochemical Complex in the southernmost Brazilian state of Rio Grande do Sul.

Synthos has been unable to secure the BD because the planned producer of the raw material, Braskem, has been unable to contract naphtha supplies from fellow Brazilian company Petrobras. Braskem needs that naphtha to produce BD.

“The investment will be carried out provided that 2013 contracts on raw material supplies come into effect,” said Synthos spokesperson Agata Koscielnik in a statement.

“Synthos is waiting for the fulfilment of that condition,” she added.

Ongoing investment project activity included the preparation of documents to obtain an installation license while a week ago the contract for detailed engineering, procurement and construction management was concluded between Synthos Brasil and a Brazilian consortium, Engecampo – Promon, Koscielnik said.

A source at Synthos in Oswiecim, southern Poland, said, however, that “much of the project activity is necessarily suspended until the raw material is secured, and we cannot wait indefinitely for that of course”.

Synthos has signed a conditional 15-year agreement with Braskem for the supply of BD to the synthetic rubber plant, based on Michelin neodymium catalyst technology and due to be operational by 2017.

It would be wary of any renegotiation of that agreement that would aim to add naphtha import costs to the price of the pledged BD, the company source said.

A spokeswoman for Braskem, Vilma Balint, said Braskem was committed to jointly finding a solution with Petrobras for the required petrochemical naphtha supply agreement.

“The company will continue its efforts to steer negotiations toward a positive result that ensures Brazil’s chemical and petrochemical industry remains competitive,” she said.

Additional reporting by Al Greenwood

By Will Conroy