ICIS Top 100 Chemical Companies: Latin America leaders

Joseph Chang

12-Sep-2014

There was no change among the Latin America-based chemical leaders in 2013, as the top five companies maintained their positions. However, climbing fast in the rankings is polyvinyl chloride (PVC) producer Mexichem, which continues to build its empire through mergers and acquisitions (M&A).

The #3 player, Mexichem, which reports its financials in US dollars, saw 2013 sales gain 8.6% to $5.2bn. The top line benefited from its May 2013 acquisition of US-based PolyOne’s vinyl assets for $250m, adding $147m in annual sales, along with its June 2012 buyout of Netherlands-based polymer pipe manufacturer Wavin for €531m.

Latin AmericaMexichem is poised to advance further with two major deals signed in August. The company is buying US-based polyethylene (PE) pipe and conduit producer Dura-Line for $630m, adding around $650m in annual sales in a deal expected to close in the third quarter of 2014.

Mexichem also plans to acquire Germany-based specialty PVC producer Vestolit in a €219m deal. That deal, which would add sales of around €477m, is expected to close in the fourth quarter of 2014. If the two deals go through, Mexichem could boost annual sales by over $1.2bn in 2015.

Brazil’s Braskem, the leading Latin America player, saw sales in local currency rise 13.3%. Yet in US dollar terms, sales actually fell 1.7% to $17.3bn on the severe decline in the Brazilian real.

In the years ahead, Braskem’s sales should increase on the construction of its Ethylene XXI project in Mexico being built by Braskem Idesa – a 75:25 joint venture between Braskem and Mexico’s Grupo Idesa.

The Ethylene XXI project, slated to start up by July 2015, will consist of an ethane cracker with 1.05m tonnes/year of ethylene capacity, along with derivative PE plants with equivalent capacity.

Mexichem is also working on two major projects. The first involves upgrading the vinyl chloride monomer (VCM) plant at its majority owned joint venture with Pemex in stages ending in 2015.

The other is a 50:50 joint venture cracker in Ingleside, Texas, US with partner Occidental Chemical. That project, scheduled to be completed in the first quarter of 2017, will add 544,000 tonnes/year of ethylene capacity, which will ultimately be used to produce VCM at an existing facility on site. The VCM would be shipped to Mexichem’s PVC plants in Mexico.

Latin America

Mexico’s energy reform signed into law in August 2014 allowing for private and foreign investment in the energy, refining and petrochemical sectors also bodes well for growth. State-owned energy company Pemex could see its petrochemical sales rise significantly in the years ahead.

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