Braskem withdraws from PET business
In May 2007, Braskem announced the deactivation of its DMT production unit and the temporary suspension of its PET production, both of which are located in the Camacari Petrochemical Complex.
At the time, a study was initiated to assess the possibility of resuming PET production based on a new technological approach that would ensure competitive costs for Brazil’s polyester chain.
The results of the studies indicated that reactivating PET production on a competitive basis was not viable. For this reason, Braskem decided to deactivate the unit, terminating the Company’s activities in this business. The decision was grounded in Braskem’s focus on prioritizing investments that provide the Company with returns above the cost of capital and that are aligned with its business strategy.
This decision will result in the constitution of an accounting provision (with no cash impact) of approximately R$125 million.
The deactivation of the PET unit in Camacari will not lead to any dismissals. Moreover, Braskem will ensure the supply of PET resin until, at least, April 2009, or as long as inventories last, to all its clients through an agreement signed with M&G Polímeros Brasil S.A. During this period, Braskem will maintain its current sales policy for this product, including technical support, in order to assure service excellence for all of its clients.
Braskem have informed also about beginning work on the new green PE plant. Work has already begun at the job site for Braskem’s new green polyethylene plant in Triunfo. In the beginning of January, the Environmental Protection Foundation (Fepam) granted the Installation License (LI), which authorizes the beginning of the construction process.
Braskem is working on engineering project details. The unit will be installed next to Basic Petrochemical Unit Plant 2. Investments will reach R$ 500 million and the plant will have the capacity to produce 200 thousand tons / year.