Photo
Business Update

Reuters business newsletter, your daily business coverage.

Subscribe

Braskem optimistic on Venezuela expansion

Tue Apr 1, 2008 1:06pm EDT

Reporter's Notebook

[-] Text [+]

By Andrei Khalip

RIO DE JANEIRO (Reuters) - Brazilian petrochemical company Braskem is set to expand into Venezuela and sees its planned investment in two plants there as safe even though ExxonMobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) had been involved in the same project before quitting that country.

Supplies of high-quality Venezuelan naphtha and abundant natural gas are key to competing with Middle Eastern suppliers of petrochemical products in the Americas and Europe, Braskem (BAK.N: Quote, Profile, Research, Stock Buzz)(BRKM6.SA: Quote, Profile, Research, Stock Buzz) Chief Executive Jose Carlos Grubisich said late on Monday.

The Venezuelan venture will be Braskem's first project outside Brazil and part of an international expansion for the largest petrochemical company in Latin America.

"It's not a question of optimism, it's business -- we have supply contracts for ethane and propane already negotiated that put us at the same competitive level as the Middle East," Grubisich said during the Reuters Latin America Investment Summit in Sao Paulo.

"It's a fact, plus we are combining advanced technology with global scale -- that's unbeatable," he said. "This opens a very big prospect for us to consolidate our position and become a much more important player in North America and Europe."

Braskem and Venezuela's state petrochemical company, Pequiven, hold stakes of 49 percent each in the Jose petrochemical complex project. Another 2 percent is owned by Japanese trading house Sojitz (2768.T: Quote, Profile, Research, Stock Buzz).

Plans call for a 450,000-tonne-a-year polypropylene plant that should start working in early 2010. A 1.2-million-tonne polyethylene plant working on ethane produced from natural gas should launch in 2012.

Braskem estimates the total cost of the two plants at $3.2 billion to $3.5 billion, funded for the most part from debt and equity financing. Braskem's own investment should be around $520 million, Grubisich said.  Continued...

 
Japan Investment Jul 01 - 2, 2008 Country Summits
Global Real Estate Jun 23 - 25, 2008 Real Estate
Consumer and Retail Jun 16 - 18, 2008 Consumer Retail
Investment Outlook Jun 09 - 12, 2008 Financial Services / Exchanges
Global Energy Jun 01 - 5, 2008 Energy

What are Summits?

Reuters Summits are your direct link to top business leaders, investors and regulators. Our journalists interview heavyweights in a particular industry, spin out hard-hitting breaking news and sharp analysis that can often move markets. If you want to understand what the insiders are thinking, look for Reuters Summits.  Launch Full Video 

 

Stay connected. Get e-mailed alerts with schedules, speaker lists, and headlines from upcoming and live Industry Summits.