Latin America has faced political and economic challenges in recent years, but continued expansion of the middle class positions the region as a vital global market for chemical makers with strong potential, says LyondellBasell CEO Bob Patel. “It is a story, just like in China, where a growing middle class is driving economic growth and supporting strong demand for plastics,” Patel says.
LyondellBasell announced in June that it had entered into exclusive discussions regarding a potential acquisition of Odebrecht S.A.’s controlling stake in Braskem. And the company’s recent acquisition of A. Schulman has also strengthened its position in the region, with compounding assets in Brazil and Mexico as well as a joint venture in Argentina.
LyondellBasell’s legacy assets in the region include a 49% stake in Indelpro, and a joint venture with Alfa, a leading Mexican producer of polypropylene (PP) with capacity of 1.3 billion lbs/year. The company also has wholly-owned PP compounding plants in Mexico and Brazil.
“It’s a very important market long term and, frankly, a market that’s not easy to reach from the United States or the Middle East, traditional export suppliers,” said Patel.
LyondellBasell is evaluating how best to serve that demand. “Broadly, we see opportunity in Latin America. We’re also continuing to invest in the United States, where we have several major projects underway,” Patel says. “In terms of US capacity, our [export] focus is still on the Asian market and the European market.”
The recent acquisition of A. Schulman has strengthened LyondellBasell’s compounding presence in Latin America and created the company’s new, global advanced polymer solutions segment. “I think that the advanced polymer solutions business will also be a key platform for us to build out further as demand grows in that region,” Patel adds.
Exclusive discussions with Odebrecht about a potential acquisition of Braskem are ongoing. Braskem, with 2017 revenue of R$58 billion ($15.5 billion), would give the company a leading position in Brazil and South America as well as production assets in Mexico, Germany, and the United States. Braskem would make LyondellBasell the largest global maker of polypropylene (PP) and give it a top-five position in polyethylene (PE). Braskem has PE capacity of roughly 3 million metric tons/year spread across several sites in Brazil, and PP capacity of nearly 4 million metric tons/year spread across sites in Brazil, the United States, and Germany. Braskem would also gain a position in polyvinyl chloride (PVC) in Brazil.
Braskem’s non-Brazil assets include a 75% stake in Braskem Idesa, an ethane cracker and derivatives complex in Mexico that started up in 2016. Braskem acquired Sunoco Chemical’s PP assets in the United States in 2010 and Dow Chemical’s US and Germany PP business in 2011.
Patel, who will deliver the opening keynote at the Latin American Petrochemical Conference (APLA) in Cancun, Mexico in November, says near-term and long-term prospects in Latin America remain strong. “We see unlocked potential with the growing middle class in the region,” Patel says. “And, given the difficult economic environment that some countries have been through, we think that will start to set the basis for more sustained growth.”
By Robert Westervelt
Source: Chemical Week
We are closing the chapter of the Chemicals Import Export Headquarters, and opening a new chapter under the name of Qemetica – a chemical group driving many industries on all continents. Therefore, the change of name is also accompanied by the adoption of the key goals of the business strategy for the next 6 years. – says Kamil Majczak, President of the Management Board.
In its efforts to advance chemical recycling, Neste has successfully conducted its first processing trial run with a new challenging raw material, liquefied discarded tires. In the processing run, Neste produced high-quality raw material for new plastics and chemicals.
Sika is opening a state-of-the-art facility in Lima, Peru, to produce synthetic macro fibers, and expanding the rollout of a product range with great growth potential in Latin America. With this innovative technology, Sika is further strengthening its position as a leading supplier to the mining industry and a strong partner for infrastructure projects.
