Chemical Undertakings of Brazilian Company Not Subject Venezuelan Nationalization

---

Researched by Industrial Info Resources (Sugar Land, Texas)--In the first week of June 2009, Venezuela's government made another move toward the nationalization of the different industries in the country when President Hugo Chavez publicly announced the nationalization of chemical plants, forcing the private companies to form joint ventures with the government as minority partners. According to authorities, Braskem SA (NYSE:BAK), the Brazilian petrochemical company headquartered in the city of Camaçari, will not see its present undertakings in Venezuela affected by the governmental measure. On one hand, Venezuela's president has stated that the government is in the process of nationalizing all of the companies operating in the country except for the Brazilian ones. On the other hand, the government has already stipulated that Venezuela will be in control of production supply of the projects carried out by Propilsur, Propilenos del Sur and Polimerica, Polietilenos de America S.A.--companies that are equally owned by Pequiven, the petrochemical company of Venezuelan state-owned PDVSA, and Braskem.

In early 2007, Pequiven and Braskem agreed on the construction of the $5 billion Jose Petrochemical Complex in the Jose Oil Complex in Anzoategui, Venezuela, one of the most modern and competitive integrated petrochemical projects in the Americas. For more details, view related December 26, 2007, article - Brazilian, Venezuelan Firms Formalize Joint Venture for Petrochemical Complex.

Polimerica will be in charge of the construction of an ethane cracker with natural-gas feedstock that is scheduled to start operating in the first quarter of 2014 with an ethylene-production capacity of 1.3 million tons per year. A low density polyethylene unit, a linear low density polyethylene unit and a high density polyethylene unit, each with a capacity of 365,000 metric tons per year, will also be in the hands of Polimerica. Propilsur, the second subsidiary, will be responsible for the construction of a 450,000-metric-ton-per-year polypropylene unit that is scheduled to be complete by the end of 2011.

View Project Report - 69000208 69000209 69000210 69000211

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.