Braskem Eyes Major PP Export Opportunities with the Development of New US Delta Plant
Braskem, a leading thermoplastics resins producer, announced on 25th June 2020 that it is planning on exporting a significant amount of the polypropylene (PP) from its new facility, Delta, which is located next to Braskem's existing production facilities in La Porte, Texas, US The plant has a production capacity of 450,000 tonnes/year and is the latest major milestone in company's global growth strategy. The company has PP production facility in the US and Brazil, as well as Europe, centred in the Netherlands.
Within the US, Braskem currently operates through five PP plants, situated in Texas, West Virginia, and Pennsylvania, having a combined capacity of 1.59m tonnes/year. The company will line load around its assets in the US, aiming to find the best efficiency for the exports and deliver from the plant that can make the product available to the export client at the right time, at the right cost.
For polypropylene exports from the US, the company is targeting central Europe and the west coast of South America. As shipping from Brazil to Chile and Peru in South America is very challenging and expensive, the new North American facility will provide an edge to the company by significantly reducing the shipping cost and efficiently meeting the growing demand of clients. This would allow the company to optimize operations in all three production regions.
The company's Delta project in La Porte is expected to start in the third quarter of 2020. Currently, the company is engaged in designing a business plan to supply 50% or more of its polypropylene production in Delta plant to Braskem affiliates in other parts of the world. The company is working to develop the infrastructure to achieve this goal efficiently and has partnered with the Port of Charleston, which has a capacity of up to 450m lb (204,000 tonnes) of exports. For this, the company is designing and developing an export hub, which is expected to be completed by Q3.
Strategically, the company is also focusing on Asian markets for PP exports from the US. The company has some commitments to export to Asia, and India presents a good opportunity in the context of Asia. Braskem has been planning to foray into Asian markets and has been looking at it for the last six years, following which the company has recently opened its office in Mumbai, India. India has limited ability to produce PP, and the demand for the product in the region is considerably growing. The country imports most of these products, and thus, the region is expected to provide a significant opportunity to Braskem to expand its business and fulfill its strategy of efficiently participating in other markets.
Although some of Braskem's PP is also exported to China, the region is not as strategic a market as India. China is capable of producing its own propylene chain, and thus, the market in the region does not provide ample growth opportunities to aid Delta project and its expansion across North America.
As polypropylene (PP) is used in a variety of applications, including packaging for consumer goods, plastic parts for several sectors such as the automotive industry, textiles, and so on, its demand is increasing across the globe. It is one of the most widely produced plastics in the world and has positively influenced people's lives in sectors like food, housing, as well as mobility.
Braskem, a Brazilian petrochemical company, is currently the largest manufacturer of thermoplastic resins in the Americas as well as the leading producer of polypropylene in the United States. It produces polyethylene (PE), polypropylene (PP), and polyvinylchloride (PVC) resins, along with other basic chemical inputs. The company has one of the most comprehensive portfolios in the industry, which also includes the green polyethylene prepared from the sugarcane, a 100% renewable resource.