Braskem to shelve caprolactam production

20-May-09
Brazilian petrochemical major Braskem has announced to shelve the production of caprolactam, a raw material used to manufacture nylon 6, and provisionally shut the product's industrial unit located at the Camaçari Complex in Bahia (Brazil). The decision took into account a detailed assessment of the business, considering the difficulties the Brazilian market for caprolactam has been undergoing in recent years, as well as the impact of the international crisis. Braskem will continue supplying its domestic market caprolactam clients until the end of 2009, with current stocks. After that date, they can resort directly to international suppliers. The company said in a statement that most caprolactam produced was for the international market, which has lost liquidity since mid-2008 led by the worldwide economic crisis and tight credit supply. The company thus had to drastically reduce the use of plant capacity, which reduced profit margins and momentarily made it unfeasible to continue with the operation. Since these assets can be reactivated in the future, this deactivation will not entail any accounting impact. Out of Braskem's 106 employees involved in this business, 38 were reabsorbed by other units, 34 are in the process of retirement, 19 remain employed at the cyclohexane unit and 18 may be dismissed.
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