Styrolution and Braskem have signed a memorandum of understanding to investigate the formation of a joint venture in Brazil, the companies announced on Monday.
The proposed 100,000 tpy plant would supply specialty styrenics, acrylonitrile butadiene styrene (ABS) and styrene acrylonitrile (SAN) copolymers, to customers in Brazil and throughout South America.
With a population of over 200 million and an estimated gross domestic product of over $2.3 trillion, the Brazilian market is robust. In recent years, Brazil has seen significant growth in the household appliance and automotive industries, both of which are key consumers of the specialty styrenics the joint venture would produce, according to the companies.
Traditionally, ABS and SAN have been imported into the region by styrenics providers like Styrolution. Officials say the new company would seek to capitalize on the favorable market dynamics to create a domestic and regional producer, thereby offering customers more localized service and greater security of supply.
Styrolution says its contribution to the proposed joint venture would include its expertise in the development and production of styrenics, the industrys broadest styrenics product portfolio, technology licensing and its existing business in the region.
Meanwhile, as the regions top petrochemical company, Braskem would provide its knowledge of the local and regional markets, supply chain infrastructure and the site for the production facility.
The consummation of the joint venture is subject to regulatory and antitrust approvals. It is planned that Styrolution would be the majority shareholder with 70% and Braskem holding 30%. Subject to an agreement by both parties to proceed and provided relevant approvals are obtained, groundbreaking for the site could be expected as early as 2015 with production likely starting in 2017.
Styrolution recently unveiled a new strategy which calls for a shift in three areas of our business, namely expanding our footprint in emerging markets, growing our specialty styrenics business and focusing on select, higher-growth industries, says Roberto Gualdoni, CEO of Styrolution.
For Styrolution, this proposed joint venture ticks all the boxes, and we are pleased to be partnering with Braskem to explore the opportunities this could afford us," he added.