BASF has finally broken ground on a new acrylic acid production complex at Brazil's Camacari, Bahia state petrochemical complex, with plans to replace imported products going into latex paints and other downstream products, and to begin exports by 2014.
With a planned investment of $660 million, the acrylic acid complex will be the first of its kind in Latin America, and the largest investment by the company in the region thus far, BASF claims. Camacari is an industrial area near the state capital of Salvador.
BASF will also use its proprietary technology to produce butyl acrylate and superabsorbent polymers from propylene feedstock provided by Braskem, which is upgrading its facility at Camacari to serve BASF requirements. BASF also will use acrylic acid from Camacari to begin production of 2-ethyl-hexyl acrylate by 2015, a raw material for adhesives and special coatings, at its existing factory in Guaratinguetá, São Paulo state, also to be the first such production in the region. Braskem is said to be the largest petrochemical in Latin America in terms of production capacity and the fifth-largest petrochemical producer globally.
The investment should reduce the production cost of Suvinil, BASF's premium architectural paint line in Brazil. The company claims a 60 percent market share for the premium sub-segment of architectural paints in Brazil. The Camacari production will supplant some $200 million in Brazilian chemical imports, and add $100 million in exports, the company calculates. BASF currently exports some products from Brazil to neighboring Bolivia and Paraguay, to Venezuela and Cuba in the north, and to several countries in Africa.
The construction start of the plant also is significant given the long time line for its planning, which dates back years, and its surmounting economic and political obstacles. Competitor Dow Chemical in 2005 signed a memo of understanding with Brazilian petrochemical company Elekeiroz to do feasibility studies for an acrylic acid plant. Dow has since then seemingly abandoned future capacity plans for propylene-route acrylic acid, instead investing last year in feasibility work with OPX Biotechnologies Inc., of Boulder, Colo. for producing acrylic acid from a fermentable corn or sugar cane-based sugar. OPX utilizes proprietary Efficiency Directed Genome Engineering (EDGE) technology.
Currently, most, if not all acrylic acid produced globally is by the propylene route, tying the production cost of acrylic acid to the price of oil-derived propylene. Dow suggests that the global market for acrylic acid is worth $8 billion and growing at a rate of three to four percent per year. Brazil is a major producer of petroleum and propylene, among other basic petrochemicals, in several chemical complexes around the country, in addition to Camacari.
Valter Milani, director of the acrylics unit of BASF in South America indicated during a recent Camacari community outreach meeting that the company's cumulative sales in the region last year amounted to about $5.8 billion. At the same time, BASF's president for Latin America, Alfred Hackenberger, suggested to the local audience that a series of acrylic acid customers would follow the company and build new facilities at Camacari.
BASF Building New Acrylic Plant in Brazil
Production cost of its Suvinil paint line to drop.
By Charles Thurston, Latin America Correspondent
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