Brazilian company to make renewable polyethylene

By Erin Voegele | January 03, 2009
Web exclusive posted Dec. 29, 2008, at 12:27 p.m. CST

Braskem, a Brazilian thermoplastic resin producer, recently announced that the company's board of directors approved the Green Polyethylene Project, which will produce ethylene and polyethylene from sugarcane-based ethanol. An investment of R$500 million ($211 million) was approved for the project, which will be located at the Southern Petrochemical Complex in the state of Rio Grande do Sul.

According to an announcement issued by Braskem, the company has already completed the conceptual and basic design phase of the project. The detailing phase and start of construction are expected to begin in early 2009, with operational startup scheduled to begin in 2011.

Braskem has made firm reservations for the project's critical equipment, such as the feed gas compressor and refrigeration compressor. To finance the operation, the company plans to pay 30 percent of the costs out of its own funds and is seeking financing for the remaining 70 percent.

Braskem has identified demand for 600,000 tons of green polyethylene and estimates the chemical will command a price premium of 15 percent to 30 percent over the price of polyethylene made from nonrenewable materials. The project could be the first of other larger-scale projects that are currently being analyzed by the company. Braskem estimates a $200 million return in net present value on the project.