Basell buys out Argentine PP maker Petroken

31-Aug-05

Dutch petrochemicals major Basell has purchased the balance 50% stake in Argentine polypropylene company Petroken. Basell, now the 100% stakeholder, is set to consolidate its South American growth strategy. This deal also marks the final step in Basell's South Cone expansion plans. In Brazil, Basell has recently concluded a US$240mln asset swap, in which it sold its 50% stake in local polypropylene maker Polibrasil to Brazilian petrochemicals group Suzano in return for increasing its ownership of Suzano's polypropylene compounding operations to 100% from 50%. Once Basell completes the construction of its 40,000 tpa plant in São Paulo in December 2005, along with these two deals, Basell's total capacity total to 200,000 tpa of polypropylene compounds in Argentina and 63,000 tpa in Brazil. Polypropylene production in Brazil and Argentina supplies mainly to the automotive industry in Brazil, which grew by 20% in 2004 and is expected to grow another 10% in 2005. Basell has stopped production of other petrochemicals in Brazil and Argentina to concentrate on specialty PP compounds for Brazil's growing automotive industry, that demands lighter and more recyclable products. To gain geographical advantage, Basell needs to relocate closer to the automotive hub. Basell plans to shut down its 23,000 tpa operations in northeastern Bahia state and move to São Paulo from 2006. By 2007, Brazil's São Paulo plant will be expanded to 50,000 tpa, with a US$20mln investment program started this year.