Braskem Idesa inaugurates Mexico Ethylene XXI PE complex

MEXICO CITY (ICIS)–The Braskem Idesa joint venture inaugurated on Monday its Ethylene XXI integrated polyethylene (PE) complex.

“[This is] a historic moment in Braskem’s trajectory,” said Fernando Musa, the company’s CEO. “This event culminates an effort of five to six years jointly [with] our colleagues of Idesa.”

Construction started in May 2012 at the site in Coatzacoalcos, Veracruz state. The project cost $5.2bn.

Ethylene XXI includes a 1.05m tonne/year ethane cracker, 750,000 tonnes/year of high density PE (HDPE) capacity and a 300,000 tonne/year low density PE (LDPE) unit.

Braskem-Idesa started up the first HDPE plant on 6 April and the second on 28 April.

Company executives said the LDPE plant will be start operations before the end of the week.

Braskem Idesa is starting up the complex as state producer Pemex struggles with lower production rates at its PE plants, which sources attributed to domestic supplies of ethane.

Pemex is the sole domestic producer of ethane in Mexico, and it supplies both its own crackers and Braskem Idesa’s, the latter under a 20-year supply agreement.

Roberto Bischoff, vice president of Braskem Latin America Unit and CEO of Braskem Idesa, assured that the joint venture has had no problems getting enough ethane from Pemex.

Looking ahead, Ethylene XXI should help lower the magnitude of Mexico’s PE deficit. Longer term, the project should benefit from steady growth in demand.

Braskem Idesa expects demand for packaging and PE to increase in Mexico because more people are moving into cities. Urbanisation causes large changes how consumers buy groceries and other goods, with those living cities purchasing more packaged products.

In addition, the economy continues to grow, giving consumers more money to spend on goods.

As such, Braskem Idesa expects PE demand to grow at rates of 3.5-4.5% in the next two to three years.

Additional reporting by Al Greenwood