Braskem increases stake in Etileno XXI

Thursday, January 17, 2013

Brazilian petrochemical company Braskem (NYSE: BAK) has increased its stake in its U$3.2bn ethane polyethylene (PE) joint venture in Mexico, Etileno XXI.

According to a report in Valor Econômico, Braskem has increased its shareholding to 75% from 65%. Mexican industrial company Idesa has cut its stake to 25% from 35%.

Etileno XXI, which will have capacity to produce over 1Mt/y of PE, is due to start operating in July 2015. Mexican national oil company Pemex's gas and basic petrochemicals subsidiary PGPB will supply the ethane feedstock for the cracker.

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According to the report, the change in shareholding is due to the smaller scale and weaker financial position of Idesa.

At the end of 2012, Braskem completed US$3.2bn in project financing for the Etileno XXI project.

Over 65% of demand for PE in Mexico is currently met by imports. Total demand for PE in Mexico is around 1.9Mt/y.