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January 1 - January 7 2010
Today's News Headlines
* Chemical industry to invest US$26bn through 2014, says Abiquim - Brazil
* Negotiations on Braskem, Quattor merger advance - Brazil
* PVC imports could increase in 2010 - Brazil
* Industrial production down in November versus October, up year-on-year - Brazil
* Bunge Brasil names new CEO - Brazil
* Dow Brasil receives Anpei seal for innovation - Brazil
* Bill to boost fertilizer production to be ready by March, says minister - Brazil
* PPQ reports trade deficit of US$4mn in January-November 2009 - Mexico
* Petrochemical sector consumes 13Mm3/d of gas in 2009 - Venezuela
* Technip awarded FEED for Polimérica plant - Venezuela
* Calderón appoints Herrera chief of PGBP - Mexico
* WorleyParsons to acquire Camargo Corrêa's CNEC for US$99mn - Brazil, Regional
* Braskem could become 5th largest ethylene producer globally after merger - Brazil
* Plastics sales, production to increase 5% in 2010, says Asipla - Chile
* Investments in "green" chemicals could reach US$3bn in three years - Brazil
* Petrobras, Odebrecht to pay US$505mn for Quattor - Brazil
* Government, Salta province ink agreement to aid petrochemical industry - Regional
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* Chemical industry to invest US$26bn through 2014, says Abiquim - Brazil
Investments in the production of industrial chemicals in Brazil are expected to total US$26bn through 2014, national association of chemical industries Abiquim said in a statement.
Approved and current projects account for US$10.9bn. Some US$11.9bn corresponds to projects under study and US$3.3bn will be for maintenance, process improvement, safety and the environment.
The investments are expected to generate 5,800 direct jobs, Abiquim said.
Rio de Janeiro state will receive the highest amount, with US$9.17bn, which will be earmarked chiefly for the implementation of Brazilian federal energy company Petrobras' (NYSE: PBR) Comperj petrochemical complex.
Under Abiquim's proposed national plan for the chemical industry, the sector will require US$132bn in investments through 2020 in order to continue growing in line with the country's GDP and eliminate the trade deficit, BNamericas reported previously.
With the policy, Abiquim's goal is to transform Brazil's chemical industry in one of the top five globally, as well as create a production surplus and become a leader in the production of "green" chemicals.
By Business News Americas staff reporters
* Negotiations on Braskem, Quattor merger advance - Brazil
Negotiations on a potential merger between Brazilian petrochemical companies Braskem (NYSE: BAK) and Quattor have advanced, Braskem and Brazil's federal energy company Petrobras (NYSE: PBR) said in separate statements in response to recent press reports.
Petrobras controls 40% of Quattor and 31% of Braskem's voting capital.
In August 2009, Petrobras, Braskem and Brazilian petrochemical group Unipar (Bovespa: UNIP6), which controls the remaining 60% of Quattor, confirmed they were in talks concerning the merger of the two firms.
According to Brazilian press reports, Petrobras and local conglomerate Odebrecht, which has majority control of Braskem, have reached an agreement to incorporate Quattor's assets into Braskem.
Odebrecht and Braskem announced in a filing with the São Paulo Bovespa stock exchange that several transfers of Braskem's ordinary and preferred shares had taken place among Odebrecht controlled companies.
With Quattor's incorporation, Braskem would become the 11th largest petrochemical company worldwide, newspaper Folha de S Paulo reported. The agreement foresees a capitalization worth 3bn reais (US$1.75bn) to 4bn reais, from both Braskem and Petrobras.
The merged company would be renamed Nova Braskem (New Braskem), which is expected to be controlled by Odebrecht, with Petrobras holding 49% of the voting capital, the report said.
The deal would create a petrochemical firm with 30.4bn reais in annual revenues and capacity to produce 15.6Mt of petrochemicals and chemical intermediates, according to a report from newspaper O Estado de S Paulo.
Quattor has been valued at 7.3bn reais. Excluding debt, the amount reaches 600mn reais.
GEYER FAMILY
According to O Estado de S Paulo, shareholders of Vila Velha holding, which controls the majority of Unipar, have presented a proposal to sell all their shares.
The Geyer family, the shareholders of Vila Velha, has gone to court in an effort to prevent the merger of Braskem and Quattor.
In late December, businessman Alberto Soares de Sampaio Geyer was granted an injunction preventing any agreement being reached. The injunction was later lifted.
Alberto's sister Joanita Soares de Sampaio Geyer was granted a similar injunction in October, but in December withdrew legal proceedings, relinquished her 20% stake in the holding and stepped down from the board.
By Business News Americas staff reporters
* PVC imports could increase in 2010 - Brazil
The improvement in Brazil's civil construction sector could result in higher imports of PVC, chiefly from Argentina, Mexico and the US, news service Agência Estado reported.
In 2010, demand is expect to surpass 1Mt, which will force producers to import more resin, the report read.
In 2008, Brazil produced 698,000t of PVC, according to national PVC association Instituto do PVC.
Civil construction accounts for approximately 70% of local PVC demand, which is mainly used to manufacture tubes and pipes for infrastructure works.
In 2008, apparent consumption grew 27% to 1.04Mt largely due to a 107% increase in imports, which reached 365,000t compared to 176,000t in 2007, according to the most recent information from Instituto do PVC.
Government incentive programs, in addition to works related to preparations for the soccer World Cup in 2014 and the Olympic Games to be hosted in Rio de Janeiro in 2016, are also expected to give a boost to the Brazil's PVC industry.
Brazilian petrochemical company Braskem (NYSE: BAK) is investing US$500mn to increase PVC output at its plant in the northeastern state of Alagoas by 210,000t/y. The new capacity is expected to come online in 2012.
Solvay Indupa, a subsidiary of Belgian chemical group Solvay, also has plans to increase PVC capacity in Brazil to 350,000t/y. Works are expected to be concluded by the end of 2010 or beginning of 2011.
In 2009, Solvay Indupa completed the first phase of its production expansion, which increased PVC capacity to 300,000t/y.
Solvay Indupa is also constructing a unit to produce 60,000t/y of sugarcane-based ethylene, which will be fed into the company's PVC production and generate 100,000t/y of "green" PVC.
By Business News Americas staff reporters
* Industrial production down in November versus October, up year-on-year - Brazil
Brazilian industrial production declined 0.2% in November from October 2009, but increased 5.1% compared to November 2008, according to national statistics bureau IBGE's monthly research.
The year-on-year improvement is attributed to growth in 20 out of 27 sectors included in the research.
Automotive production led the way, increasing 22.9% in November versus the same month of 2008. Production of rubber and plastics grew 14.2% and chemical products 7.9% over the same comparison.
In January-November last year, industrial production declined 9.3% year-on-year.
By Business News Americas staff reporters
* Bunge Brasil names new CEO - Brazil
US agribusiness and food company Bunge (NYSE: BG) has appointed Pedro Parente president and CEO of its local subsidiary Bunge Brasil, the company said in a statement.
Parente will head all of Bunge's business units in the country and will report to the company's global chairman and CEO Alberto Weisser.
The Brazilian fertilizer division will continue to be headed by Mário Barbosa and the agribusiness, food and bioenergy unit by Sérgio Waldrich, both of whom will report to Parente.
By Business News Americas staff reporters
* Dow Brasil receives Anpei seal for innovation - Brazil
The Brazilian subsidiary of US company Dow Chemical (NYSE: DOW) has received the seal of innovative company from Brazil's national association of research and development of innovative companies (Anpei) for its investments in R&D and technology, Dow said in a statement.
In awarding the seal, Anpei considers information on companies' structure, businesses and investments to promote innovation and technological advancements, the statement read.
"Anpei's recognition underlines Dow's long-standing efforts towards sustainability and innovation. The seal is another opportunity to publicly showcase the leadership of our company in the chemical industry," R&D director for Dow in Latin America, John Biggs, said.
By Business News Americas staff reporters
* Bill to boost fertilizer production to be ready by March, says minister - Brazil
Brazil's agriculture minister Reinhold Stephanes and the mines and energy ministry expect to have a bill proposal focused on developing the local fertilizer industry ready by March, news service Agência Estado reported.
"With the new bill we aim to have self-sufficiency within 10 years," Stephanes was quoted as saying.
The fertilizer bill is being drafted separately from the new mining regulatory framework, according to the mines and energy minister Edison Lobão.
Stephanes added that the goal is to reduce the bureaucracy surrounding the production of raw material for fertilizer production.
The agriculture minister recently said that he expects federal energy company Petrobras (NYSE: PBR) to advance with its projects to increase fertilizer production in the country.
Petrobras is planning to invest some US$2bn in the construction of an ammonia and urea plant to produce 1Mt/y.
By Business News Americas staff reporters
* PPQ reports trade deficit of US$4mn in January-November 2009 - Mexico
Mexican state oil company Pemex's petrochemicals subsidiary PPQ registered a trade deficit of US$4mn in January-November 2009, Pemex said in a statement.
International sales totaled US$127mn and 669,000t during the period while imports summed US$131mn and 330,000t.
Pemex reported a trade surplus of US$14.9bn in the eleven-month period.
By Business News Americas staff reporters
* Petrochemical sector consumes 13Mm3/d of gas in 2009 - Venezuela
Venezuela's petrochemical sector received 459Mf3/d (13.0Mm3/d) of gas from the gas subsidiary of state oil company PDVSA in January to mid-December 2009, according to a report by state news agency ABN.
Of the total, 183Mf3/d went to Pequiven Oriente and 134Mf3/d to Fertinitro, as well as to El Tablazo Fertilizantes and state petrochemical company Pequiven in El Tablazo and Morón.
The report provided no comparisons to 2008.
By Business News Americas staff reporters
* Technip awarded FEED for Polimérica plant - Venezuela
French oil and gas services company Technip has been awarded a front end engineering and design contract by JV Polimérica for a new ethylene plant to be constructed at the new US$3.2bn Jose petrochemicals complex in Venezuela's Anzoátegui state, the former said in a statement.
The plant will have the capacity to produce 1.3Mt/y.
The FEED is scheduled to be completed by 2011, the statement said.
Polimérica is owned 49% each by Venezuela's state petrochemicals company Pequiven and Brazilian petrochemical giant Braskem (NYSE: BAK) and 1% each by Caracas-based private sector company Coramer and Japan's Sojitz.
By Business News Americas staff reporters
* Calderón appoints Herrera chief of PGBP - Mexico
Mexico's President Felipe Calderón has appointed Jordy Herrera Flores as the new CEO of state oil company Pemex's gas and basic petrochemical subsidiary PGBP, Pemex said in a statement.
Herrera replaces Roberto Ramírez Soberón, who resigned.
An economics graduate from the Iberoamericana university, Herrera has ample experience in the public domain, and served as the energy ministry's deputy minister of energy planning and technological development from December 2006 up until his recent appointment.
By Business News Americas staff reporters
* WorleyParsons to acquire Camargo Corrêa's CNEC for US$99mn - Brazil, Regional
Australia-based industrial services provider WorleyParsons (ASX: WOR) has agreed to buy Brazilian construction group Camargo Corrêa's engineering projects subsidiary CNEC for 170mn reais ($99mn), WorleyParsons reported in a release.
Of the purchase price, 40mn reais will be initially retained by CNEC as a non-core asset.
The deal is part of Camargo Corrêa's strategy to focus on core areas such as construction, cement, road concessions and electricity, raising funds for new investments and boosting revenue, Brazilian daily O Estado de S Paulo reported.
Camargo Corrêa has also considered selling major stakes in financial holding company Itaúsa, US aluminum maker Alcoa(NYSE: AA) and denim giant Tavex, according to a previous report published by the paper.
The capability of CNEC complements WorleyParsons' businesses and provides a springboard for the next phase of the company's growth across South America, the release said.
CNEC specializes in thermoelectric and hydroelectric plants, subways, ports, airports, highways, wastewater, industrial plants, refining and distributing of oil and gas, petrochemicals and urban development. The company has around 700 employees and has offices in Brazil, Argentina and Peru.
By Business News Americas staff reporters
* Braskem could become 5th largest ethylene producer globally after merger - Brazil
Brazilian petrochemical company Braskem (BYSE: BAK) could become one of the five largest ethylene producers worldwide in the short term by combining its assets with fellow petrochemical firm Quattor, newspaper Valor Econômico reported.
Currently, the merger of the two companies would create the 11th largest ethylene producer worldwide, with capacity of 3.7Mt/y, the report read. In light of expansion projects announced by Braskem, the company could shortly surpass 5Mt/y and become one of the top five ethylene producers globally.
Braskem has an aggressive plan to become a leader in thermoplastic resins production in the Americas. The company recently announced a US$2.5bn investment in partnership with Mexican company Idesa for Mexico's Ethylene XXI project.
In Venezuela, Braskem is advancing with its Propilsur and Polimérica joint ventures with Venezuelan state petrochemical firm Pequiven. Braskem also has projects in Bolivia and Peru, in addition to being close to finalize a deal to acquire assets in the US.
In the global resins market, however, the "New Braskem" would account for only 3% of total supply, with capacity to produce 5.4Mt/y.
Large scale also offers better conditions to compete globally, Valor said.
In 2010 the petrochemicals industry will look to maintain tight margins and absorb the production surplus coming chiefly from the Middle East and China. Naphtha prices are also expected to increase, pressuring the sector's profitability throughout the year.
By Business News Americas staff reporters
* Plastics sales, production to increase 5% in 2010, says Asipla - Chile
Chile's plastic industry is expected to register an increase of around 5% in both sales and production to US$2.65bn and 740,000t in 2010 compared to last year, according to the president of Chilean association of plastics companies Asipla, Pablo Escobar.
Last year, production totaled 700,000t and sales US$2.50bn, both down 17% compared to 2008, according to a report by Chilean business daily Estrategía.
Of total production 52% is exported, chiefly to the US and Europe, and last year generated around US$1bn, a figure Escobar expects to increase 10% in 2010 as the industry considers entering Asian markets, namely China, Indonesia, Malaysia and Thailand.
Escobar also said 2010 would be marked by plans to begin using oxo-biodegradable plastics as well as encourage companies to reduce their carbon footprint, the report said.
By Business News Americas staff reporters
* Investments in "green" chemicals could reach US$3bn in three years - Brazil
Investments in Brazil in alcohol chemical projects, especially those focused on developing a new route for ethylene, are expected to total US$3bn over the next three years, newspaper Valor Econômico reported.
Brazilian petrochemical company Braskem (NYSE: BAK) and foreign companies like Dow Chemical (NYSE: DOW), DuPont (NYSE: DD), Amyris and Rhodia are directing investments towards raw materials based on ethanol.
Currently, approximately 1Bl/y of ethanol is consumed by the chemical industry and this is expected to increase to 5Bl/y over the next three years and to 10Bl/y within five years, said president of consultancy Job Economia e Planejamento, Júlio Maria Martins Borges.
Dow Chemical, for example, has plans for a US$1bn project for the production of sugarcane ethanol-based polyethylene (PE). The project, which is temporarily on hold, was to be carried out in partnership with Santelisa Vale, which has been incorporated by French company Louis Dreyfus.
If the partnership with Santelisa falls through, Dow said it intends to find another partner to move ahead with the project.
"The search for 'green' products based on renewable raw materials has become a priority for several companies," president of ETH Bioenergia, José Carlos Grubisich, was quoted as saying.
ETH Bioenergia will supply 150Ml of ethanol to Braskem over three years. The ethanol will be used for production of "green" PE at Braskem's plant currently under construction at the Triunfo petrochemical pole, in Rio Grande do Sul state. The unit will produce 200,000t/y and operations are scheduled to begin at the end of 2010.
In December, Amyris Brasil partnered with sugar and ethanol producers Cosan (NYSE: CZZ), Açúcar Guarani and Bunge (NYSE: BG) for the production of specialty chemicals and fuels based on renewable sources. The company has also closed a deal to acquire 40% of the Boa Vista ethanol mill, controlled by Brazilian group São Martinho. Amyris is expected to announce a new joint venture this month, the report read.
By Business News Americas staff reporters
* Petrobras, Odebrecht to pay US$505mn for Quattor - Brazil
Brazil's federal energy company Petrobras (NYSE: PBR) and local conglomerate Odebrecht have agreed to pay 872mn reais (US$505mn) to control Brazilian petrochemical company Quattor, newspaper Valor Econômico reported.
The move ends a legal battle with the Geyer family, who has tried to prevent the merger of Quattor and Brazilian petrochemical company Braskem (NYSE: BAK).
The Geyer family, through the Vila Velha holding, controls Brazilian petrochemical group Unipar (Bovespa: UNIP6), Quattor's parent company.
Braskem is controlled by Odebrecht and Petrobras.
According to Valor, businessman Alberto Soares de Sampaio Geyer had attempted to buy shares in the holding in an effort to take control and prevent the merger going through, but the other shareholders refused to sell.
Family issues and Quattor's 6.5bn real debt contributed to the decision of Vila Velha shareholders to sell the petrochemical firm.
As a result, Unipar is likely to have a no more than 5% share in the new petrochemical giant.
The petrochemical group will maintain its 50% participation in Brazilian chloralkali producer Carbocloro, while its other subsidiaries Unipar Comercial and Polibutenos will be consolidated into Braskem, the report read.
By Business News Americas staff reporters
* Government, Salta province ink agreement to aid petrochemical industry - Regional
Argentina's federal government and Salta province have signed an agreement to boost the local ICT industry, and at the same time design and implement a Strategic Digital Program, the provincial government said in a statement.
The agreement also includes industries such as agribusiness, petrochemicals, mining, energy, tourism and services.
By Business News Americas staff reporters
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In-deph interview
* "The Central and South American market will grow by an average of 4% a year, reaching around US$4.8bn in 2013"
Paul Gaster
Divisional manager - flexible packaging
PCI Films Consulting
http://www.bnamericas.com/interviews/petrochemicals/Paul_Gaster_,PCI_Films_Consulting,/169437406
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Main companies covered in today's news
* PEMEX Petroquímica
http://www.bnamericas.com/company-profile/en/PEMEX_Petroquimica-Pemex_Petroquimica/169437406
* Quattor Petroquímica S.A.
http://www.bnamericas.com/company-profile/en/Quattor_Petroquimica_S,A,-Quattor/169437406
* Cosan S.A. Indústria e Comércio
http://www.bnamericas.com/company-profile/en/Cosan_S,A,_Industria_e_Comercio-Cosan/169437406
* 3Com Corporation
http://www.bnamericas.com/company-profile/en/3Com_Corporation-3Com/169437406
* Unipar Comercial e Distribuidora S.A.
http://www.bnamericas.com/company-profile/en/Unipar_Comercial_e_Distribuidora_S,A,-Unipar_Comercial/169437406
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