Braskem Idesa SAPI, is a joint venture from Brazilian firm Braskem S.A., a producer of chemistry products, and Mexican company, Idesa, specialising in petrochemical, construction and distribution.
The site will have a capacity of one million tons annually of polyethylene, through an ethane cracker and three polymerization plants, two high density polyethylene (HDPE) and one low density (LDPE).
This breaks down to annual amounts of 450,000 tons of HDPE, 350,000 tons of linear polyethylene of low density and 200,000 tons of LDPE.
HDPE and LDPE for food and beverage
The company said 300,000 tonnes of HDPE, and 150,000 of LDPE would be for use in the food and beverage market, mostly in Mexico.
The cost of the Etylene XXI project is US$3bn (€2.4bn) which will be financed both privately and by a group of financial institutions with $2.2bn coming from external institutions.
Jorge Rubio Escalona, external affairs and communications officer atBraskem Idesa, told FoodProductionDaily.com production will depend on demand and adjustments will be made if necessary.
“Braskem Idesa’s petrochemical complex will be producing 300 thousand tons per year of HDPE for the food and beverage industry and 150 thousand tons per year of LDPE for these industries.
“All of the grades produced will comply with all FDA regulations and European regulations for the use in contact with food and beverage.”
Rubio Escalona added Ethylene XXI is the largest industrial project in the Americas in the past two decades.
“Mexico’s polyethylene market has a deficit of 1.3 million tons. The polyethylene production of Braskem Idesa will help the Mexico’s overall trade balance and will reduce this deficit to 300 thousand tons of polyethylene (PE).”
Supply from ethane as feedstock
The 20-year supply contract will come from PEMEX Gas y Petroquímica Básica (PEMEX Gas) in the form of 66,000 daily barrels of ethane as feedstock, according to Idesa.
The Etielno XXI Project is located in Nanchital, Veracruz, and is expected to generate over 9,000 jobs during construction and 3,000 direct and indirect jobs once operations begin in 2015.
Rubio Escalona added: “The food and beverage sector is a good sector for producers of PE because it is influenced by the gross domestic product (GDP), but mostly in a good way. When the GDP falls, this sector falls as well but not as much, but when the GDP increases this sector increases more than the GDP.
“It is important to state that all products will be affected by recession at some point, but this does not necessarily mean there will be a cut in their production.”
The project also received the Resolving of the Environmental Impact Statement Assessment (EISA) by the Ministry of Environmental and Natural Resources of the Mexican Federal Government (SEMARNAT) earlier this month.
This means the venture complies with relevant environmental regulations and allows the start of construction, which the firm said has subsequently been started, and future operation of the facility.