Friday, April 30, 2010

Braskem to review all investments in Venezuela

Image source
It was obvious, but yet still, I didn´t want to see, Braskem is reconsidering all its investments in Venezuela, in order to adapt them to the new global reality.

What is this new global reality?

- The plastic consumers do not look for added value.
- The old saying: "Think global, act local" has been replaced.

In my opinion, the previous investments were already in line with today´s reality. This information, for me, is not more than a pateada de ahogado, something that simply will die, and is still trying someway to survive.

Thursday, April 15, 2010

PVC in Venezuela

Image source

Ok, I will translate one of previous entries in spanish.

The PVC or polyvinyl chloride is +30 year polymer product. In all these the process has become much safer (the monomer is a known carcinogenic compound), and their application are broader and broader. Their biggest blow was when it was forbidden to use it to contain potable water. Specifically its production in Venezuela started in 1979, and currently has an installed capacity of 190 MTA (which it expected to double by 2013).

The internal demand of PVC in Venezuela is about the 200 MTA, therefore there is little export margin. Although when those new capacity comes online, Venezuela will produce the double of its consumption and approximately an 20% of all the latinamerican market.

However, comparing the use of PVC in Venezuela, by CONAPRI figures, 80% of the production is used in piping. Comparing this percentage with other regions, apparently there is a huge margin for development. In fact, the so called "Petrocasas", are a good step.

In my opinion, more interest should be focused in producing PVC profiles and packaging.

Saturday, April 10, 2010

Some thoughts about venezuelan plastic market

Image source

As I previously said in the blog, the petrochemical business (polymers) is intrinsically linked to the end user consumption.

In order to select the best method or technology to produce any polymer, and market study has to be done to determine the trends of the consumers.

In the middle east for example, an ExxonMobil technology, which has the best cost position and high tonnage its selected.

In india, because some cultural particularities, its a batchwise process because of the numerous (over 100 I think) different grades they have to produce in a single plant.

In the Netherlands the polymers companies needs also to compete beside a cost position, to a differentiation position.

Now, How should a Venezuelan polymer producer company should behave in order to please the domestic market?

The example is the tooth-paste, I was amazed to find in Europe the toothpaste in which the cup have to be completely loosen from the tube in order to get paste out. It was different from Venezuela where everything is linked to an easy-to-open easy-to-close cup.

So the answer to the question is: similar to the US, the venezuelan consumer adopt very easily the packaging preferences of the american consumer.

Sunday, April 4, 2010

Update - Braskem - Pequiven is reconsidering polyolefin plant location in Venezuela

Image source

According to this source

Braskem intention is to relocate the PP plant from Jose petrochemical complex to Falcon. The production capacity its expected to be now 300 mta (from previous 450 mta). This reduction in the production capacity is indeed strange. I could only speculate in the reasons of it.

- Lack of propylene.
- Lack of market for high volumes of PP.
- To reduce capital expenses.

The 3bn project is still going, but IMO, somewhat delayed. The reason of the delay? Difficulties for funding and global crysis. This information was provided by Braskem CEO, so it can be trusted.

Update: the third reason appear to be the correct one, if built in Jose, an propane dehydrograntion plant is needed. In order to reduce the capital expenses, is it better to move the project to Falcon and use the FCC propylene rich streams.