Oct 31, 2001 http://www.findarticles.com/cf_0/m3066/40_163/80163672/p1/article.jhtml?term=brazil
Streamlining
Brazil's Chemicals Ownership.
Copene Consolidation is First Step
THE RESTRUCTURING OF Brazil's domestic petrochemical sector took
a major step forward recently when Odebrecht and Mariani assumed control of
Brazil's largest cracker, Copene (Camacari), through their purchase of
government-owned holding company Companhia Nordeste de
Participaciao (Conepar) . Odebrecht and Mariani, which each
already owned a stake in Copene, bought Conepar for R785 million
($320 million).
Brazil's Central Bank sold Economico group's 63.82% stake in Conepar, a company which has a 23.69% share in Norquisa, a holding company with a 58.4% control stake in Copene. The sale was an auction in which Odebrecht and Mariani were the sole bidders.
Odebrecht already had a 16.02% stake in Norquisa, through its PVC-producing Trikem subsidiary. Mariani already had a 16.09% stake in Norquisa via its Pronor holding company.
The
long-anticipated auction of Conepar was a key step in reducing
the number of owners at Brazil's three crackers--Copene, Copesul
(Triunfo), and Petroquimica Uniao (PqU; Sao Paulo). Odebrecht
also owns a controlling stake in Copesul. Having fewer owners
should mean fewer management disputes and conflicts of interest,
local industry leaders say.
Odebrecht and Mariani will consolidate their assets at Camacari
into a new company, Braskem. Assets include the controlling stake in
Copene, Odebrecht's chemicals division OPP Petroquimica, as well
as affiliates of Odebrecht and Mariani including vinyls company
Trikem, polyethylene terephthalate (PET) maker Proppet,
caprolactam producer Nitrocarbono, and polyethylene (PE) producer
Polialden.
Consolidating the assets into Braskem will save $500 million over
the next 10 years, says Osvaldo Deiro, v.p./technology at OPP
Petroquimica. An estimated $300 million of that total will come
from savings on the 3.65% tax the Brazilian government charges
for every transaction between separate companies operating at
Camacari. The remainder will come from streamlining
administrative and operational functions, says Odebrecht, and
union leaders fear job cuts are on the horizon.
Analysts say the $500 million in cost savings is optimistic, hut
it is needed to help pay down Odebrecht's more than $1 billion in
debt. Odebrecht and Mariani used loans to pay for the Conepar
purchase, exacerbating the debt burden at Odebrecht's
petrochemical and vinyls divisions.
"To achieve anywhere dose to the kind of savings it needs,
Odebrecht must consolidate those assets today," says Luiz
Laydner, oil and petrochemical analyst at investment bank Pactual
(Rio de Janeiro). "Odebrecht is running against the clock
because it has a large amount of debt and reduced margins,"
says Laydner. "At the same time, it will not be easy to
consolidate all the companies because minority shareholders--some
of which are public companies--will demand a premium be paid on
their stock."
Critics say the Odebrecht-Mariani deal was good for Odebrecht but
bad for Copene. "Odebrecht had a very high debt, and now it
has control of a company that generates a lot of cash," an
industry observer says. "But for Copene itself, it was not
such a good deal because it now has much more debt." The
first company to be incorporated into Braskem was PET producer
Proppet, an Odebrecht-Mariani joint venture.
The Copene sale to Odebrecht and Mariani took many turns and at
least two years to complete. Analysts wam that streamlining
management at Brazil's other petrochemical production centers,
PqU and Copesul, also will take time. Local executives expect
PqU, which produces 500,000 m.t./year of ethylene and is Brazil's
smallest cracker, to merge with the gas-fed ethylene complex that
will be built by Rio Polimeros at Duque de Caxias. Rio Polimeros,
a consortium of Unipar, Suzano, Petrobras, and national economic
development bank BNDES (Rio de Janeiro), will build a
500,000-m.t./year ethylene cracker and a 500,000-m.t./year PE
unit. Unipar and Suzano are also partners in PqU.
Platts 2003/8/13
Braskem CEO envisions consolidated industry, few majors
The future of Brazil's petrochemical industry would likely be a
consolidated one controlled by two or three major groups, Braskem
CEO Jose Carlos Grubisich told Platts in an interview Tuesday.
Of these rulers of a consolidated market, one player would be
Braskem, and the others would likely be the Suzano and/or Unipar
groups. "In the next five to ten years, I see two or, at most, three
petrochemical groups emerging as part of a consolidated and
restructured petrochemical sector.
Braskem, controlled by the
Odebrecht and Mariani groups, owns Brazil's largest cracker at
the Camacari petchem complex in northeastern Bahia state and
various Camacari polymer producers.
Suzano has a 50% stake in
Polibrasil Resins, Brazil's major PP producer, a 35% stake in PE
major Politeno and a 20% stake in
synthetic rubber producer Petroflex.
Unipar owns Polietilenos Unio, a
major PE producer, and has the largest (37.5%) stake in the
Petroquimica Uniao, Brazil's No. 3 cracker.
Brazil's three crackers--Copene, Copesul (Triunfo), and Petroquimica Uniao (PqU; Sao Paulo).
Odebrecht also owns a controlling stake in Copesul.
Copesul http://www.copesul.com.br/english/index.htm
Classified as a large-size cracker, Copesul produces about 40% of ethylene consumed in Brazil, nameplate capacity of 1.135 million tons/year. Besides ethylene, its main product, Copesul produces propylene, butadiene, benzene, toluene, xylenes, MTBE, butene-1, propane, and others, a total of 3 million tons per year of petrochemicals. More than 80% are consumed in South Petrochemical Complex. Remaining products are sold to other Brazilian states or exported.
World Bank http://www.ifc.org/ogmc/brazil.htm
Brazil: Triunfo Petrochemical Complex Expansion
IFC organized the financing for a major expansion of this world scale petrochemical complex in southern Brazil.
IFC raised a total of US$ 490 million from a combination of its own funds and syndicated loans with major international Banks. The Truinfo petrochemical complex is now one of the largest, most modern complexes of its type, in the world.IFC' s investments were:
COPESUL (Compania Petroquimica du Sul) US $220 million funding for the:Expansion of the naphtha based ethylene cracker capacity from 685,000 tonnes/year to 1,135,000 tonnes /year of ethylene, with corresponding increases in propylene and aromatics capacity.
The expansion also included: a new high purity benzene unit, expansion of the MTBE plant and a site wide optimization of steam and utility services.COPESUL's expansion allowed the further development of downstream plants in the Triunfo complex. These expansions were also financed by IFC.
IPIRANGA (Ipiranga Petroquimica SA) $190 millionCOPESUL's increased ethylene and propylene production allowed Ipiranga to build :
A new 150,000 tonnes/year " swing " plant to produce an extended range of both HDPE and LLDPE polyethylene resins and a new 150,000 tonnes/year polypropylene resins plant.
These new plants enabled Ipiranga to widen its range of polyethylene resins and to add polypropylene resins to its extended product mix.INNOVA (INNOVA SA) $80 million
The expansion of COPESUL's ethylene production, coupled with the production of high purity benzene provided the necessary feed stocks for the economic production of styrene and polystyrene resins at Triunfo.
INNOVA, a new company, was established to rehabilitate an existing ethyl benzene plant and build new styrene and polystyrene plants. Innova now produces:
190,000 tonnes/year of ethyl benzene, 180,000 tonnes/year of styrene and combined total of 120,000 tonnes/year of General Purpose (GPPS) and High Impact (HIPS) grades of polystyrene.
Petroquimica Uniao S.A (PQU) http://www.pqu.com.br/ingles/aempresa/index.htm
Petroquimica Uniao S.A. is the central raw materials manufacturing plant of the Sao Paulo petrochemical complex. It was the first company of its kind in the country, and started production in 1972. Since then, it has been growing in size, quality and variety of products for the domestic market and export.
PQU's plant nowadays occupies an area of 741 thousand square meters in the townships of Santo Andre and Maua, in Greater Sao Paulo, manufacturing half a million tons of ethylene and over one million tons of petrochemical products per year, in addition to the Unilene Resins.