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Friday, January 15, 2010
Today's News Headlines
* Flexible plastic packaging revenues down in 2009, improved outlook for 2010 - Brazil
* Pequiven implements energy saving measures - Venezuela
* Morón fertilizer production up 10% in 2009 - Venezuela
* Petroecuador, PDVSA have 45% of land needed for RPD refinery - Ecuador
* CF ends attempt to take over Terra - Peru
* Petrobras to double Comperj refining capacity - Brazil
* PetroquímicaSuape looks for partner - Brazil
* Brazil interested in developing Bolivian gas-chemical pole - Bolivia, Brazil
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* Flexible plastic packaging revenues down in 2009, improved outlook for 2010 - Brazil
Brazil's flexible plastic packaging industry revenues are expected to have declined 3-5% last year from 11bn reais (US$6.2bn) in 2008, national flexible plastic packaging industry association Abief's president, Alfredo Schmitt, told BNamericas.
The decrease is attributed to the global economic downturn. "The crisis resulted in falling prices and an unfavorable business environment," Schmitt said.
Volumes are also expected to have experienced a similar decline, according to the executive.
For 2010, Abief is projecting revenue growth of at least 6% in view of an upturn in the Brazilian economy.
"Historically, the flexible plastic packaging industry has grown at up to two times faster than the country's GDP," the executive added.
While the forecast for the domestic market is positive, exports could still face a difficult year.
"The current exchange rate is unfavorable for exports. In addition, producers are affected by unfavorable taxes and production costs, including energy, which are expected to continue increasing," Schmitt said.
The executive is optimistic about the effects of the potential merger between Brazilian petrochemical firms Braskem (NYSE: BAK) and Quattor on the domestic market.
"The merger of Braskem and Quattor is expected to provide the necessary conditions for local plastics producers to compete in the domestic and international markets," he added.
Merheg Cachum, president of national association of plastic industries Abiplast, also expects the merger to create a positive environment.
"When the plastics manufacturing industry has a reliable supplier, it is better placed to compete with products manufactured internationally," he told BNamericas previously.
The full interview with Alfredo Schmitt will be published on Monday, for subscribers only.
By Fernanda De Biagio
Business News Americas
* Pequiven implements energy saving measures - Venezuela
Venezuelan state petrochemical company Pequiven plans to implement a number of measures in an effort to reduce power consumption by 20%, in accordance with the government's energy saving plans, state news agency ABN reported.
Starting January 14, Pequiven will reduce the opening hours of its corporate headquarters, located in Valencia in Carabobo state, to between 7:00am and 1:00pm, company president Clark Inciarte said, adding that the company plans to purchase a power plant in order to guarantee the opening hours during the rationing program in Carabobo.
Pequiven is also considering modifying operations at a number of its plants subject to raw material supply, domestic demand and international commitments, according to Inciarte.
The company is currently evaluating which production lines could be suspended at the Ana María Campos petrochemical complex in Zulia state, which, while generating much of the electricity it consumes, receives power from state power company Corpoelec through state energy company Enelven.
The José complex in Anzoátegui state, which receives power from the national grid, could connect to the system designed by the energy and oil ministry for the east of the country, the president added.
The measures would not apply to the Morón complex in Carabobo state, according to Inciarte, which generates 100% of the electricity it consumes.
Venezuela's current power crisis has been triggered both by low hydro levels due to the El Niño weather phenomenon and investment shortfalls.
By Business News Americas staff reporters
* Morón fertilizer production up 10% in 2009 - Venezuela
Venezuela's Morón petrochemical complex, in Carabobo state, produced 1.26Mt of fertilizers in 2009, an increase of 10% from 1.13Mt the previous year, according to a report by state news agency ABN.
Nitrogen fertilizer output totaled 360,127t and phosphate fertilizer production 900,520t, ABN reported.
By Business News Americas staff reporters
* Petroecuador, PDVSA have 45% of land needed for RPD refinery - Ecuador
Ecuador's state oil company Petroecuador and its Venezuelan counterpart PDVSA have acquired 44.9% of the land needed for the prospective Pacífico refinery (RDP) to be built in Manabí province, according to a report by state news agency El Ciudadano.
The companies have 1,347ha of the total 3,000ha needed for the refinery and its buffer zone, the report cited the refinery's chief Carlos Proaño as saying.
The two firms have completed basic engineering of the refinery and petrochemical complex since announcing plans for the JV in 2008.
Originally, the companies said the refinery would have a 300,000b/d capacity and be 51% owned by Petroecuador.
Testing of the refinery is expected to begin in December 2013, according to Proaño.
Foreign investors from the UK, South Korea and Japan had made a "firm commitment" to finance 70% of the project, Proaño said, without providing further details of the financiers or precise investment amounts.
In 2008, the companies estimated the project's cost at US$5bn.
By Business News Americas staff reporters
* CF ends attempt to take over Terra - Peru
Illinois-based fertilizer manufacturer and distributor CF Industries (NYSE: CF) has withdrawn its offer to acquire Iowa-based nitrogen producer Terra Industries (NYSE: TRA), the former said in a statement Thursday evening.
"It is clear that an acquisition of Terra now would require a significant increase in our offer, given the substantial uplift in equity values in the fertilizer sector," said CF's CEO Stephen Wilson. The stock and cash offer was worth around US$4.5bn.
CF Industries has a nitrogen complex under development in Peru for which it announced in October that it had signed a natural gas supply agreement with the Camisea consortium, led by Argentine oil company Pluspetrol.
The company also said it has sold all its Terra shares.
CF is itself the subject of a hostile takeover bid from Canadian fertilizer maker Agrium (TSX, NYSE: AGU).
By Business News Americas staff reporters
* Petrobras to double Comperj refining capacity - Brazil
Brazilian federal energy company Petrobras (NYSE: PBR) could increase refining capacity of its Rio de Janeiro Comperj petrochemical complex from 150,000b/d to 300,000b/d, newspaper Valor Econômico reported.
"We are evaluating the situation in order to make the project more competitive," Petrobras downstream director Paulo Roberto Costa was quoted as saying.
The Comperj refinery is expected to be constructed before the basic petrochemicals unit and the second generation petrochemical plants for the production of resins, the report read.
Difficulties in negotiating partnerships for the project lead Petrobras to focus on the refinery and, consequently, postpone talks on the petrochemicals unit until the situation regarding the merger of Brazilian petrochemical companies Braskem (NYSE: BAK) and Quattor is resolved.
Petrobras is a shareholder in both petrochemical companies and the only national supplier of raw material for petrochemicals production.
Some 60% of the earth moving works for Comperj's refinery have been concluded, Valor said.
Estimated investments in Comperj are expected to total US$8.4bn and operations begin in 2012.
By Business News Americas staff reporters
* PetroquímicaSuape looks for partner - Brazil
Brazil's federal energy company Petrobras (NYSE: PBR) is seeking a partner for its PetroquímicaSuape project to produce PTA, PET resin and polyester fibers, local newspaper Jornal do Commercio reported.
Indian conglomerate Reliance Industries, which has signed a technical cooperation agreement for PetroquímicaSuape, is seen as a preferred partner for the venture.
Negotiations with Reliance were at an advanced stage, but slowed down after the global economic crisis hit, the report read.
In addition to Reliance, Petrobras is also in talks with another Indian group and with Spanish industrial group La Seda.
PetroquímicaSuape's first production units are expected to begin operations in the second half of 2010 and investments are expected to total 4bn reais (US$2.27bn).
By Business News Americas staff reporters
* Brazil interested in developing Bolivian gas-chemical pole - Bolivia, Brazil
Brazil is interested in investing in the industrialization of Bolivia's natural gas reserves and will submit to President Evo Morales' government projects to install a gas-chemical pole in Bolivia, according to Brazil's ambassador in La Paz, Frederico Cézar de Araújo, Spanish news portal EFE reported.
The government is working with Brazilian petrochemical company Braskem (NYSE: BAK) and federal energy group Petrobras (NYSE: PBR) on related projects, according to De Araújo.
The gas-chemical pole is expected to require investments of between US$1.5bn and US$2bn and would contribute to Bolivia's plan to industrialize its natural gas reserves.
De Araújo said that Brazil would wait until Bolivia's new hydrocarbons regulation is ready before advancing with any project.
Brazilian demand for Bolivian gas is currently 16M-18Mm3/d, but the Brazil purchases 24Mm3/d under a contract it has with its neighbor.
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,/170073206
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Main companies covered in today's news
* Quattor Petroquímica S.A.
http://www.bnamericas.com/company-profile/en/Quattor_Petroquimica_S,A,-Quattor/170073206
* PEMEX Petroquímica
http://www.bnamericas.com/company-profile/en/PEMEX_Petroquimica-Pemex_Petroquimica/170073206
* Cosan S.A. Indústria e Comércio
http://www.bnamericas.com/company-profile/en/Cosan_S,A,_Industria_e_Comercio-Cosan/170073206
* 3Com Corporation
http://www.bnamericas.com/company-profile/en/3Com_Corporation-3Com/170073206
* Unipar Comercial e Distribuidora S.A.
http://www.bnamericas.com/company-profile/en/Unipar_Comercial_e_Distribuidora_S,A,-Unipar_Comercial/170073206
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