After several weeks of negotiations involving the Treasury and Development and Promotion departments of the state of Rio Grande do Sul, Braskem gave assurances to Governor Tarso Genro that it would invest R$300 million to double butadiene production at the Triunfo Petrochemical Complex located in the state. The product is used to make tires and rubbers in general, and the investment will provide an opportunity for the growth of the elastomers chain in the state.

The confirmation came from Marcelo Lyra, Braskem's vice-president of institutional relations, and from Alfredo Tellechea, a member of its board of directors, during a meeting held this Tuesday (29) at the Palácio Piratini, where the state's executive branch is housed. "The decision, which must still be ratified by the company’s Board of Directors, was influenced by the government’s strategic vision for the state's growth and is aligned with Braskem’s commitment to the economic development of Rio Grande do Sul," said Lyra.

The state government guaranteed the exemption of ICMS state VAT tax on machinery and equipment that are not made in the state and that enter Brazil through the state's ports. In addition, taxes will not be charged on machinery and equipment acquired from companies domiciled in the state, and Braskem was authorized to pay suppliers located in the state using part of its tax credits.

"Our team has acted with great responsibility. The incentives we are granting will benefit job creation and income generation, as well as the state's entire production chain, which will enjoy advantages when selling machinery and equipment to Braskem. In this way we also value and benefit other regions," said Governor Genro.

The investment will be formally announced at Palácio Piratini. On the same date, we plan to announce the creation of a program to promote the development of the plastics and rubber chains. The investment provides for the installation of 100 ktons/year of additional butadiene production capacity. Braskem’s installed capacity of this product in the state of Rio Grande do Sul is currently 105 ktons/year.

The decision to invest in this capacity expansion is based on the potential of the elastomer production chain in the state, whose main players are Lanxess and Borrachas Vipal, and on the solid results of the raw material in the international market, with butadiene prices rising by more than 50% in 2010 from 2009. The increase reflects factors such as the limited world supply due to the greater competitiveness of natural gas as feedstock and the reduced use of naphtha, which limits the supply of byproducts like butadiene.

The construction of the new plant should be concluded by the end of 2012. The works will generate 1,000 direct jobs and, once operational, the plant will have 60 permanent jobs. In a visit to Porto Alegre in January, Braskem’s CEO Carlos Fadigas emphasized the state's importance to the company. "In the period from 2007 to 2012, Braskem will invest R$2.2 billion in the state of Rio Grande do Sul, with the highlight the plant producing green plastic made from ethanol, which is the world’s largest using this technology. This figure also includes the investments to boost productivity and modernize assets and for maintenance stoppages."

Source: Braskem

 

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