Engineering the Future at Paulínia
Petrobras and Braskem are investing in a new plant with a view to joining the exclusive club of the world’s top 10 polypropylene manufacturers
written by ◦ Karolina Gutiez photos by ◦ Holanda Cavalcanti

Braskem is striving to consolidate its commanding market share for polypropylene in Brazil, looking beyond the year 2007.” This announcement by Luiz de Mendonça, the Braskem Vice President responsible for the Polyolefins Unit, signals the future trends for this business in Brazil and worldwide. Polypropylene, a plastic resin that was introduced in the chemicals industry in 1954 and first hit the market in 1960, is increasingly present in people’s daily lives because it is used in almost everything we see around us: food packaging, textiles and cosmetics, pop bottle caps and freezer containers, even car bumpers and panels. Polypropylene can also be used to make toys and household appliances, broom and brush bristles, sacking, safety nets for construction, disposable diapers, hospital products and furniture, among many other products.

Because of its versatile applications, polypropylene consumption in Brazil is growing 10% per year. The current demand is 1 million tonnes (metric tons) per year, and by 2007 it will be 1.2 million t/yr. It will also be the year when Braskem and Petroquisa, a Petrobras subsidiary, will begin running the polypropylene production unit to be built in Paulínia, São Paulo. “The decision to invest in this new plant demonstrates our confidence in the growth of the Brazilian economy and the thermoplastic resins market,” says Braskem Entrepreneurial Leader (CEO) José Carlos Grubisich.

Construction of the plant, which will be situated in the heart of Brazil’s main consumer market for polypropylene, will require a total investment of USD 240 million. The new unit will have an initial production capacity of 300,000 to 350,000 tonnes per year, but the aim is to reach 400,000 t/yr, in addition to the 650,000 t/yr that Braskem already produces at the Triunfo Petrochemical Complex in the state of Rio Grande do Sul. The new unit is expected to earn an average of over USD 300 million annually.

Initially, the Paulínia plant will sell 40% to 50% of its output in the domestic market. The remainder will enable the company to increase its exports of this product. “This new unit will position Braskem as an important player in the international polypropylene market, ranking among the world’s top ten producers of that plastic resin,” says Luís Felli, the company’s Sales Director for Polypropylene. The main importers of the Braskem Polyolefins Unit’s production are Argentina, Chile and Peru, followed by Europe and Asia, particularly China. “The Chinese market will show robust growth, according to forecasts of polypropylene consumption, and Braskem will keep pace with that development,” adds Felli.

The process technology that Braskem will contribute to Paulínia is the most advanced of its kind on the world market, and the key to making the expansion project possible. Braskem has two plants called Bulk 1 and Bulk 2 at the Triunfo Petrochemical Complex that are identical to the unit being built in the interior of São Paulo State. “Basell, the company that licenses the Spheripol technology, has hailed these plants as the best in Brazil and an international benchmark for quality and productivity,” observes Luiz de Mendonça. To ensure that Bulk 3, the new plant in Paulínia, stays at the cutting edge, Braskem has signed an agreement with Basell to upgrade its technology until 2010.

In a competitive and promising market like the polypropylene sector, Braskem is using technology to stand out from the competition: innovation, the development of new products and plans for replacing other materials. The aim of all this is to ensure the loyalty of the company’s key-clients. “Braskem is pursuing growth in its segment of the market in order to consolidate its commanding market share. The strategy for achieving this is to offer outstanding products and services without causing predatory competition and unfair pricing,” explains Luís Felli.

Paulínia Unit

The master plan for the new unit has been completed. The next step is creating a Specific Purpose Partnership (SPE) in which Braskem will have 60% of the voting stock and Petroquisa will own 40%.

Both companies will share the management of the Paulínia unit: in addition to supplying the technology, Braskem will be responsible for product marketing and sales, technical assistance and client service; Petroquisa will supply the raw materials – polymer-grade propylene.

The shareholders will contribute 30% of the USD 240 million cost of the project and the remainder will be obtained through specific long-term loans. “We are investing in a world-class unit that combines production scale, state-of-the-art technology and access to raw materials on competitive terms,” says José Carlos Grubisich.

Braskem’s next step will be to sign the engineering and construction contracts to build the plant. Then, the process of hiring new company members to operate the facility will begin. These teams will be trained at the Bulk 1 and Bulk 2 plants. Other important features of the project are logistics involving raw materials and the final product, as well as advance marketing, which will begin in early 2007.

All of these operations must be in place by the time the plant is up and running. “The Paulínia unit is the first brand-new installation, or what we call a ‘greenfield’ project, that Braskem has taken part in since its inception three years ago. And we are acquiring a taste for this kind of challenge,” observes Luiz de Mendonça.