Braskem to exit PET business due to non-viability

02-Jan-09
Braskem, leading thermoplastic resin producer in Latin America announced plans to withdraw from its PET business by deactivating its temporarily suspended PET unit located in Camaçari Petrochemical Complex. As per a company statement, the non-viability of the PET production on competitive basis as evident by the company's assessment conducted after May 2007, led to this decision. In May 2007, Braskem announced the deactivation of its DMT production unit and the temporary suspension of its PET production, both of which are located in the Camaçari Petrochemical Complex. Braskem conducted a study to assess the possibility of resuming PET production based on a new technological approach that would ensure competitive costs for Brazil's polyester chain. However, the decision will not lead to any dismissals, the company said, and it will ensure the supply of PET resin until, at least, April 2009, or as long as inventories last, to all its clients through an agreement signed with M&G Polímeros Brasil S.A. This decision will result in the constitution of an accounting provision (with no cash impact) of approximately R$125 million. The decision was grounded in Braskem's focus on prioritizing investments that provide the Company with returns above the cost of capital and that are aligned with its business strategy.
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