Mexico City – Braskem operations in Mexico are about to gain expected reinforcement for polyethylene production at the coatzacoalcos factory, a tough city in the state of Veracruz. The Chemical Terminal Puerto Mexico (TQMP), an investment scheduled for four years, finally will be inaugurated on Wednesday (7). The project required resources of around US $ 450 million and was designed to bring from the United States a raw material that is missing in the Mexican plant: the ethane.
The chemical compound is a starting point for polyethylene production, industrial resin used in the production of a multitude of everyday plastic items and highly demanded by the packaging industry. But the lack of ethane has accentuated in recent years, causing the Veracruz factory to operate in half its capacity and even paralyze production.
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“Today we cannot exceed 80% of the capacity. [….] Intensive capital company needs to run the full cargo, ”said Isabel Figueiredo, CEO of Braskem Idesa, in a meeting with journalists at the company’s headquarters in Mexico City.
TQMP promises to end this bottleneck, with structure to receive ships from Texas, where are the largest ethane producers in the world – and at a distance of just two days of navigation through the Gulf of Mexico. Braskem has invested more than $ 200 million in two vessels with an appropriate structure to transport the raw material, which is embedded in a liquefied state and packed at negative temperatures. Ships will be dedicated to TQMP logistics.
Braskem plays the operation in Mexico with a local minority partner, IDESA, petrochemical that is currently controlled by Carlos Slim’s Casso Group. For the construction of the terminal, Braskem Idesa did joint venture With a third name, Advario, the Dutch Division of German Oiltanking, specializing in construction, financing and operation of port terminals.
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Mexican state supply compromised production
Braskem and Idesa came together in 2009 to participate in the Mexican Petroleum Auctions (Pemex) and won the event. In the agreement, signed the following year, the Mexican state -owned company pledged to provide 66,000 daily barrels of ethane to Braskem Idesa for two decades.
The coatzacoalcos ethylene factory began operating in 2016, at the expense of an investment of US $ 5.2 billion. The problems of ethane supply by Pemex began two years later and climbed, generating noise with the government of Andrés Manuel López Obrador. The president in power at the time even questioned the legitimacy of the contract he classified as “Leonino”, claiming that Braskem Idesa acquired the ethane for only one fraction of what the raw material cost in the market.
In 2021, the parties reached an agreement with a contractual additive that reduced the obligation to supply Pemex to 30,000 barrels per day until the TQMP operation was entry into operation. The Mexican state company also agreed that it would contribute to project, granting areas for the construction of the terminal.
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The new port structure has the capacity to import 80 thousand daily barrels of equivalent ethane. “The terminal can provide us beyond our ability today,” explained Isabel Figueiredo. The total production capacity of Braskem Idesa today is 1 million and 50 thousand tons of polyethylene per year. With the new structure, the company studies the possibility of expanding production capacity to up to 125%.
“This is not yet decided, it has to be approved by the Council. But it makes a lot of sense, because we will have an available ethane, and our polyethylene plant is designed to be able to operate beyond nominal capacity,” explains the CEO.
At the time of departure of the terminal, Pemex is no longer obliged to provide ethane to Braskem Idesa. But the executive says that Braskem Idesa will try to continue buying the state’s raw material. “And the [etano] More competitive, because it comes from ducts. It will always be our best alternative. And we have already said that to Pemex, which we are willing to buy. ”
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Focus No Mexican Market
The operation in Mexico accounts for approximately 15% of Braskem’s volumes and global revenues and increased production tends to raise this percentage. Today, 60% of the polyethylene who leaves the Veracruz plant is sold within the country, which makes the company the company player place with greater market share – about 20%. “The remaining 80% are practically from the United States,” explains Isabel.
What does not supply the domestic market is mainly exported to Central America, the Caribbean and the northern portion of South America, regions where logistics facilities make export more competitive.
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“We want to focus on the Mexican market, because it is deficient and matters 80% of what we consume. We have advantages over the product that comes from outside. We are here, we guarantee availability and delivery, because we are a local producer,” says the CEO.
Asked how the tariff war started by US President Donald Trump could impact logistics on the new terminal, the executive says she is not concerned. “The Mexican government is unlikely to put some taxation in the ethane [dos Estados Unidos]Because the Mexican government itself depends a lot on American gas, ”he says.
On the other hand, markets that may decide to tax the American polyethylene can become potential buyers of Braskem Idesa. “Mexico has bilateral agreements with more than 50 countries around the world. There will be no lack of market for us,” concludes the executive.
*The report traveled to Mexico City at the invitation of Braskem
