Brazil Petrochemicals Industry Update Quarter 3 2012

  • July 2013
  • -
  • Business Monitor International
  • -
  • 77 pages

Includes 3 FREE quarterly updates

BMI’s Brazil Petrochemicals report for Q312 examines the enormous long-term potential of the local consumer industry, but raises concerns over the potential impact of a rapid depreciation of the real against the US dollar over the short term.
We also examine the ways in which Brazil is tackling issues related to competitiveness, which has taken a hit because of the strong real and high naphtha feedstock costs. The report also analyses the growth and risk management strategies being employed by the leading players in the Brazilian petrochemicals segment, as they seek to maximise the tremendous growth opportunities on offer in the local industry .
The Brazilian petrochemicals industry has considerable potential for growth, with plastics consumption at 32kg per capita, which is less than one-third of the US and Western European level. Growth will be fuelled primarily by the 2016 Olympic Games in Rio de Janeiro and the 2014 FIFA World Cup. The chief concern is the fragmentation of the plastics conversion segment . Braskem is the monopoly supplier of polymer resins, serving over 11,500 converters which produce these at a high cost, which is not helped by a difficult regulatory environment as well as energy supply problems.
Key views in the segment include: - Brazil is set to experience continued petrochemicals capacity growth in 2012. Braskem has stated that its PVC expansion project in Alagoas and the new butadiene plant in Rio Grande do Sul will come onstream as scheduled in May and July 2012, respectively. These will add capacity of 200,000tpa PVC and 100,000tpa butadiene.
- The depreciation of the real against the US dollar, coupled with a rise in domestic demand, should help sustain rising output growth through the rest of 2012. Previously, BMI warned that the strength of the real, in conjunction with the increased competitiveness of US producers due to greater volumes of cheap gas feedstock, could undermine investment in the Brazilian petrochemicals market .
- Brazil is third in BMI’s Americas Petrochemicals risk/reward ratings (RRRs), with a composite score of 65.9 points. While it has a relatively large petrochemicals market, Brazil’s score is weighed down by higher levels of risk than most other countries in the region, with its long-term financial industry risks a notable cause for concern, although this component of the business environment has improved. Brazil is 6.2 points ahead of Mexico and 11.8 points behind Canada.

Table Of Contents

BMI Market View 5
Industry SWOT Analysis ..... 6
Brazil Petrochemicals Industry Environment and Risk Analysis ... 6
Brazil Political Environment and Risk Analysis ....... 6
Brazil Economic Environment and Risk Analysis ..... 7
Brazil Business Environment SWOT ...... 8
World Petrochemicals Overview ..... 9
Petrochemicals Industry Overview 9
Data : World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) ....... 9
Financial Results ... 13
Data : Financial Results Of Major Petrochemicals Firms, 2011 .. 13
World Oil Products Price Outlook ...... 14
Data : BMI's Refined Products Projections, from 2010 to 2016 ....... 14
Latin America Overview......... 23
Brazil Industry Overview 26
Industry Trends and Developments ......... 27
Projects And Expansions . 27
Foreign Ventures ... 28
Bioplastics ... 29
Petrochemicals Risk/Reward Ratings ...... 31

Market Projection Scenario ... 32
Performance 32
Petrochemicals Projections 32
Data : Brazil’s Petrochemicals Segment, from 2008 to 2016 (‘000tpa, unless otherwise stated) ........ 35

Macroeconomic Data ....... 36
Data : Brazil - Economic Activity ....... 38
Company Profiles ......... 39
Braskem ....... 39
Dow Quimica ......... 42
Glossary of Terms ........ 43
Data : Glossary Of Petrochemicals Terms .... 43
Demographic Outlook .. 44
Data : Brazil's Population By Age Group, 1990-2020 ('000) ..... 44
Data : Brazil's Population By Age Group, 1990-2020 (% of total) ........ 45
Data : Brazil's Key Population Ratios, 1990-2020 .. 46
Data : Brazil's Rural And Urban Population, 1990-2020 .. 46
BMI Methodology ......... 47
How We Generate Our Market Projections .... 47
Chemicals and Petrochemicals Market ........ 47
Cross Checks ......... 48
Risk/Reward Ratings ........ 48
Data : Petrochemicals Business Environment Indicators And Rationale ......... 50
Weighting ..... 50
Data : Weighting Of Indicators . 51

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