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AmSty offices in Cartagena use solar panels as part of sustainability efforts. Image courtesy of AmSty.

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Brazil-based soda and chlorine producer Unipar Carbocloro to audit bigger Braskem for a purchase

Unipar Carbocloro, a company in the soda and chlorine industry with production assets in Argentina and Brazil, planned in early July a due diligence aimed at presenting an offer for much bigger Braskem, biggest polypropylene producer in North America and Latin America’s biggest petrochemical company.

Officials at Unipar Carbocloro, a company with an estimated market capitalization of $1.7 billion according to companiesmarketcap.com, informed Brazilian stock authorities through an early July letter that it received “signaling that the pretended operation structure serves the interests of Novonor and interested parties.” Novonor, formerly Odebrecht, owns just over 50% of Braskem. Braskem had in early July a market capitalization of $4.5 billion, according to companiesmarketcap.com.

“The company, together with its advisers, creditor banks, Petrobras, Novonor, and other parties involved will look carefully at the next operating steps,” it said. Petrobras is the biggest minority stakeholder in Braskem with a 38% stake in the company.

Unipar Carbocloro said on June 10 it planned a public offer to acquire Braskem shares both in Brazil as well as its New York-listed ADRs.

Braskem confirms due diligence

Braskem officials informed on July 3 to Brazilian stock authorities that it gave due diligence approval to Unipar. Braskem officials also said that they didn´t know about any other formal offer from any other suitor in reply to an information request on the veracity of media reports about other offers.

“We’ve sent today correspondence to Unipar, inviting them to start a due diligence process that will aim at the presentation of a final binding offer. We emphasize such invitation wasn’t extended with exclusivity,” Braskem said.

Braskem has been informing stock authorities about initiatives carried out by its majority owner, Novonor (formerly Odebrecht), for the past couple of years in relation to a potential sale of the company by its two main owners. This is the first due diligence notice to investors.  

Petrobras raises $1.25 billion 

Brazilian state oil Petrobras, as Braskem’s biggest minority stakeholder, will have first refusal rights to acquire Novonor´s stake, according to Brazilian media reports. Petrobras had a market capitalization in July 2023 of just under $88 billion, according to companiesmarketcap.com information.

Petrobras said in June it contemplated a decision that could involve divestment from Braskem. But it said that it may also increase its participation in the chemical company.

Petrochemicals were a “strategic” component of the state oil company´s plans and the company weighed a decision, it explained.

Petrobras said in early July that it raised $1.25 billion through 10-year bonds paying lenders a yield of just over 6.6%. Demand was 3.4 times over the offered volume, it said.

The total operated production at Petrobras reached just over 3.7 million barrels of oil equivalent per day in the January-March period.

Petrobras owns 13 refineries in Brazil that process about 80% of the gasoline consumed in the biggest South American country. Brazil has installed capacity to process just over 2.4 million barrels of crude oil per day into oil products.

Luiz Inacio Lula da Silva, who was Brazilian president twice with an initial term between 2003 and 2007  and a second from 2007 to 2010, won in Oct. 2022 Brazil’s closest elections ever by defeating Jair Bolsonaro (2019-2022) and is currently in his third term in office. Lula is a member of the Workers Party.

Earlier this year there was a reported interest for an offer for Braskem from the Abu Dhabi National Oil Co. but Novonor decision makers would not even meet as the offer was deemed low, Braskem officials said earlier this year.

Braskem was set up in Aug. 2002 from the integration of the Brazilian investor group Mariani with six companies of Odebrecht, an organization named after the family name of founders and that is mostly known for its participation in engineering and large infrastructure projects such as highways. 

Braskem owns five plants in the U.S., all located in Texas and in the East Coast. Along with other leading North American polypropylene producers, it is facing a very complex market with receding demand for that resin after much price volatility since 2021 as well as a due to coming supply glut, a polypropylene market participant said in a late June interview.

AmSty advances with efforts to have 30% recycled content in food packaging by 2030

Americas Styrenics, or AmSty, announced on June 30 that its seven manufacturing facilities (six in the U.S. and one in Colombia) received a sustainability and carbon certification, and that this is a step in efforts to be greener that include the fulfillment within seven years of its 30%-recycled-content-in-all-polystyrene food packaging.

Amsty, which describes itself as the leading producer of styrene monomer, polystyrene, and certified recycled polystyrene in the Americas, owns plants in California, Connecticut, Illinois, Louisiana, Ohio, and in Cartagena, Colombia.

Certification  “reinforces our committed goal that all polystyrene food packaging contains 30% recycled content by 2030," said Randy Pogue, CEO of AmSty, according to a June 30 press release.

The Cartagena location, the only AmSty plant outside of the U.S., supplies polystyrene to Mexico, the Caribbean, Central America and South America, the company said on July 10.

In May AmSty said it installed “100 kWp of solar panels on the company's office building roofs at the Cartagena” to improve sustainability.

By Reuters Events Downstream