Mexico-based Braskem Idesa sets up venture for new ethane terminal; Huntsman completes sale of dyes, pigment division to Archroma; Braskem runs at reduced rates in Brazil but steady in the U.S.

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Petrochemicals help produce dyes and pigments. Pantone, known for its matching system that helps transfer colors from design to products, started as a chemical company specialized in pigments. Image courtesy of Stux, Pixabay.

Mexico-based Braskem Idesa signs equal join venture for new ethane terminal

Braskem idesa, a Mexico-based company that resulted from a venture of Brazil-based Braskem with Mexico-based Idesa and is based in Nanchital, Veracruz, completed a joint venture accord regarding 50% ownership of a terminal built to import ethane into Mexico’s Gulf Coast.

The ethane import facility in the Gulf of Mexico named Terminal Química Puerto México is now 50% owned by Advario after this company completed a payment of $56 million to Braskem Idesa, the company said on March 1, 2023.

The terminal will have import capacity of 80,000 barrels per day of ethane.

Braskem Idesa has been importing ethane from the U.S. to feed a cracker that supplies ethylene to its 1.1 million annual tonnes per year polyethylene complex, completed in 2016. Braskem plans to import ethane and build the terminal that connects to its plant were first announced in late 2019 and the company has been importing for the past years already but without a dedicated terminal that will allow more volumes.

The decision to approve the construction of the Braskem Idesa ethylene and polyethylene complex, at a cost of $5.2 billion, had resulted from Braskem and its Mexican partner winning an auction to receive ethane from Pemex for a long-term contract.

Pemex, however, saw its ethane production decline along with all its hydrocarbons production in the past decade resulting in the Braskem Idesa-owned complex being increasingly challenged in terms of feedstock availability because of failure by Mexico to deliver.

Braskem Idesa and the Mexican government, led since December 2018 by President Andres Manuel Lopez Obrador, were confronted at several points over the past two years in relation to contractual agreements by Mexico to deliver ethane and fines associated with missed deliveries. Mexico, meantime, carried investigations of auctions in previous governments.

An accord was reached in 2021 that made more investment, such as the import terminal, possible.

Huntsman completes sale of dyes, pigment division to Archroma

Huntsman said on Feb.15, 2023 it has closed the sale of what was its Textiles Effects division to Archroma with a transaction for $593 million.

The company said that the Textile Effects business merging with Archroma will create “the world's leading textile chemicals and dyes company.”

Archroma is owned by SK Capital Partners. The transaction was announced on Aug. 9, 2022. Huntsman said at the time it was going to use proceeds to strengthen core businesses and return cash to shareholders. 

SK Capital is comprised of experts in specialty materials, chemicals and pharmaceuticals, according to its website. “We leverage our experience to acquire companies with unrecognized potential,” it said in its website.

Huntsman has over 70 manufacturing and research plants globally that make products including polyurethanes. Polyurethanes, besides providing cushioning through rigid and soft foams, also helps make coatings, adhesives, sealants and elastomers.

Brazil-based Braskem runs at reduced rates in Brazil but steady in the U.S.

Brazil-based Braskem, a company majority owned by Novonor with Brazilian state oil company Petrobras owning the biggest minority stake, said in late February in an advance of its fourth quarter 2022 Report of Production and Sales filed with Brazilian stock authorities that it has reduced its running rates for petrochemical  operations.

Braskem, Latin America’s biggest petrochemical company, reported declines of 7% in the fourth quarter of 2022 compared with the third quarter of 2022 and of 13% compared with the fourth quarter of the previous year for Brazil ethylene production.

“Compared with 2021, the medium rate of operation of petrochemical plants in 2022 was less (down 3 percent points) explained, mainly, by smaller spreads in the international market (…) Compared with 2021, the medium rate of utilization of chemical plants in 2022 was impacted by the scheduled maintenance” of Rio Grande do Sul, 47 days, and the PVC plant in Alagoas, 37 days, the company said.

A table showed the company´s ethylene capacity utilization as of the fourth quarter of 2022 at 72%, down from 79% in the third quarter and 85% in the fourth quarter of 2021.

The average ethylene utilization rate in Brazil by Braskem was 78% in all of 2022, down from 81% in the previous year.

Braskem owns five polypropylene production facilities in the U.S. located in the Northeast and in the U.S. Gulf Coast. Its polypropylene production capacity in the U.S. continued to run at a steady pace.

“In the U.S., the utilization rate was in line with the third quarter of 2022, in function of adjusting the production volume to stock levels,” Braskem said citing slower polypropylene demand in the region.

In the U.S. “compared with the fourth quarter of 2021, there was an increase of two percentage points explained by the stoppage planned for maintenance in one of the plants in the region in the fourth quarter of 2021,” the company said.

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