Brazil’s Braskem expects operations at Triunfo to normalize in ‘coming days’

SAO PAULO (ICIS)–Braskem’s operations at Triunfo in floods-hit state of Rio Grande do Sul are still yet fully normalized, despite the plant having restarted more than two weeks ago, a spokesperson said to ICIS on Wednesday.

The company expects operations to return to normal “in coming days”, the spokesperson added, without providing more details about exact timelines.

Braskem’s facilities at the Triunfo petrochemicals hub, near the state’s largest city of Porto Alegre, are a key production hub for Brazilian polymers, but transport to and from the facilities was heavily disrupted by the historic floods.

That made access for employees and inputs almost impossible for the most of May.

“If weather conditions and access to the complex remain stable, the units are expected to be operational as planned in the coming days. Access to the Triunfo complex by road has already been cleared,” said Braskem’s spokesperson.

“Employees are mostly using buses and minibuses contracted by the company to access the complex. Trucks are also circulating on the roads, gradually regularizing logistics operations.”

For Braskem’s capacities at Triunfo, see bottom section.

LONG ROAD TO NORMALITY
At the peak of the crisis, which began on 29 April, around 90% of industrial facilities in Rio Grande do Sul were shut because of the floods, according to local authorities.

The state is an industrial and agricultural powerhouse within Brazil and shutdowns there had a knock-on effect on other industrial sectors.

Automotive majors Volkswagen and Stellantis, for instance, were forced to shut or reduce operating rates at some of their facilities in Brazil and Argentina, which depended on automotive parts suppliers in Rio Grande do Sul.

Both companies confirmed to ICIS this week that they are returning to operations, although Stellantis’s plant in Goiana, in the state of Pernambuco, is still operating at reduced rates.

Earlier this week the manufacturing purchasing managers’ index (PMI) showed activity in May had greatly been impacted by the floods aftermath.

Moreover, this week Brazil’s statistics office IBGE said GDP in the first quarter had registered healthy growth of 0.8%, quarter on quarter, but analysts have said economic output may sharply slowdown in the second quarter because of the impact of the floods.

Meanwhile, while road transport may be slowly normalizing, one of the state’s three main ports – Porto Alegre – remains shut to operations, Portos RS, the ports authority in Rio Grande do Sul, said on Wednesday morning.

The Port of Pelotas was shut until mid-May, while the Port of Rio Grande was never affected by the floods.

The destruction caused by Brazil’s worst flooding in history will take many months, years perhaps, to return to normal operations.

The Federal government has announced credit lines with generous financing terms, but industrial groups in the state have said they are insufficient.

Analysts have pointed out that the fertilizers markets may be hit by the roads as planting in Rio Grande do Sul’s important agricultural sector will be affected.

According to the emergency services in the state, more than 35,000 people are still taking refuge in shelters, while nearly 600,000 remain displaced from their homes.

In the state, with a population of 12 million, nearly 2.4 million people have been affected by the floods, which left 172 dead and 44 people unaccounted for.

TRIUNFO KEY FOR PLASTICS
Braskem is Brazil’s sole manufacturer of polyethylene (PE) and polypropylene (PP), the most widely used polymers. Its market share in 2023 for PE stood at 56% and for PP at 70%, according to figures from the ICIS Supply & Demand Database.

The Triunfo complex, meanwhile, is key for the country’s polymers supply chain, accounting for nearly 37% of Brazil’s PP capacity and 40% of PE capacity.

Brazil’s total PP production capacity is nearly 2 million tonnes/year. PE capacity is about 3 million tonnes/year, with 41% being high-density polyethylene (HDPE), 33% being linear low-density polyethylene (LLDPE) and 26% being low-density polyethylene (LDPE).

Braskem’s Triunfo complex can produce 740,000 tonnes/year of PP, 550,000 tonnes/year of HDPE, 385,000 tonnes/year of LDPE and 300,000 tonnes/year of LLDPE.

Front page picture: Braskem’s facilities in Triunfo
Source: Braskem 

Additional information by Bruno Menini