Major petrochemical producer Braskem aims to recover market share in Brazil in 2025, aided by higher tariffs and new duties on imports, after nearly two years of losses.
Braskem posted $935mn of losses last year, with additional losses of $440mn spread across the first three quarters of 2024.
Looking ahead to 2025, Braskem expects to increase its domestic share of polyethylene (PE) and polypropylene (PP) markets in Brazil, in part through higher import tariffs.
Brazil raised tariffs on imported polymers to 20pc from 12.6pc effective on 15 October. That has already benefited the company, with sales in the fourth quarter expected to increase by $30mn from the previous quarter, Braskem said in November.
Additionally, with fewer imports, Braskem's operating rates for plastic resins are expected to rise in the first quarter from around 64pc during the seasonally weak fourth quarter.
In addition to the higher tariffs, Braskem is asking Brazil to apply anti-dumping duties on US- and Canada-produced PE. This could reduce the amount of this material coming into Brazil, which has surged in recent years. The case is being investigated.
Braskem has requested duties on PE imports of 21.4pc from the US and 26.9pc from Canada. This would mean a 20pc import tax, plus a 21.4pc provisional dumping duty, totaling a 41.4pc tax on materials purchased from the US, and 46.9pc on Canadian PE.
To put the numbers in perspective, Brazil imported 1.82mn metric tonnes (t) of PE in January-November, a 45pc increase from the same period a year before. Of the total figure, 77pc was bought from the US and Canada.
Brazil's PE imports in November alone fell to 106,200t, 39pc lower than October and the lowest this year, showing the initial impact of the higher import duties. Still, November PE imports were up by 6pc from the same month in 2023 despite the 20pc import duty as well as theUS dollar's appreciation to the Brazilian real since October.
The Argentina case
Braskem has looked to neighboring Argentina to recapture part of the sales lost to imports in Brazil during the year.
Braskem's PE sales to Argentina have increased monthly through October, when the company became the largest PE exporter to Argentina.
Argentina PE imports in October increased by 39pc from the same month in 2023, reaching 24,300t, a boost attributed to the reduction in the country's import duty to 7.5pc from 12.6pc in September. Brazil sold 46pc of that total, leading the market. North America lost its first position, falling to 42pc in October from 54pc a year earlier.
January-October PE imports into Argentina fell to 226,800t, down by 19pc from the same period in 2023, with North America's share at 44pc and South America — represented solely by Braskem — at 39pc.
Executive reshuffle
As part of its efforts to become more competitive, Braskem reshuffled its executive board, aiming to improve operational efficiency and cost management.
The company's new chief executive, Roberto Ramos, stepped into his role in early December, succeeding Roberto Bischoff. Ramos previously served as Braskem's vice president from 2002-2010.
Ramos almost immediately announced changes for the positions of chief financial officer, head of the olefins and polyolefins South America unit, Brazil and global industrial operations, and Mexico and US operations.
At the time, Braskem said that changes in the board would not affect plans for a possible sale of infrastructure company Novonor's controlling share in Braskem, Novonor said.
Braskem's sale is of extreme importance to Novonor as it plans to use any proceeds to repay R14bn ($2.34bn) in debt to creditors.
Braskem is the largest producer of thermoplastic resins in the Americas and a leader in biopolymer production. Fellow conglomerate Novonor holds a 38.3pc stake in Braskem with 50.1pc of voting shares, while Brazilian state-controlled oil company Petrobras holds a 36.1pc share with 47pc of voting capital. The remaining 25.6pc is split among other shareholders.
