Maua, Brazil


The new plant is in Maua in Capuava in Brazil. This is in the state of São Paulo, which is the main centre of Brazil's heavy industry. Polibrasil, the owner of the plant, is a 50/50 joint venture between Suzano, a Brazilian industrial group, and Basell. Basell was launched on October 1, 2000 when Montell, Elenac and Targor were combined in a new global polyolefins joint venture owned 50/50 by BASF and Shell. Polibrasil is seeking to concentrate on polypropylene as a core competence.

SPHERIPOL PP PROCESS POLYPROPYLENE PLANT

The polypropylene plant was initiated in 1997, however due to financing, construction did not begin until February 2001. The plant is expected to start production in the last quarter of 2002. The project was been delayed by difficulties in raising finance, partly caused by bureaucracy and partly by the general economic problems in Brazil. It was originally intended to reach completion during 1999. The cost of the project has been approximately $230 million.

The project originally involved opening a new 300,000t/yr polypropylene plant, as well as shutting down a 110,000t/yr polypropylene facility that had come close to the end of its useful life. The plant uses Montell's advanced Spheripol PP process technology, which is used in more than half the world's polypropylene plants. The new plant will raise Polibrasil's total capacity from 430,000t/yr to 620,000t/yr. The Maua plant also built a 24,000t/yr compounding facility, bringing the company's total capacity to 50,000t/yr.

PETROBRAS PROPYLENE CONTRACT

For raw material supply, Polibrasil signed a contract with Petrobras for 140,000t/yr from their propylene cracker. Polibrasil also paid for a $45 million propylene separation unit at its Capuava refinery, which will be owned and operated by Petrobras. This unit will also be used to supply raw material to the Maua plant. The lead contractor for the project is Tecnimont, which has responsibility for all aspects of engineering, procurement and construction at the plant.

In October 2001 Polibrasil and Petrobras announced a £217m agreement for a propane gas separation unit. It should go online in the fourth quarter of 2003 at the Petrobras Recap refinery and should be able to separate 145,000t/yr of propane. The Recap site will cost $47m, while the other $170m will be spent on the new polypropylene site to increase Polibrasil's production capacity.

BRAZILIAN POLYPROPYLENE MARKET GROWTH

The plant will produce copolymers and other products for the packaging, textile, automotive and consumer product industries. As the Brazilian demand for polypropylene has been estimated as growing by around 10-11% a year, it has been the focus of a lot of investment. Most of Polibrasil's production is geared to supplying this growing home market. However, the very investment may have created a slight mismatch between the supply and demand, in that the new plant coming online is probably enough to supply the local market for some time to come.

Financing the plant was more difficult than expected, partly because the Brazilian financial crisis kicked in before completion. Part of the money, a loan of $130 million, was secured as long ago as 1998. The cash came from the Dutch FMO and was managed by ABN AMRO. Despite this, the financing deal was not finalised until 2001, by which time there had been a significant delay in plant construction.