Can you provide an overview of ExxonMobil Chemical’s (EMC) activities and evolution in Latin America?
ExxonMobil Chemical (EMC) has conducted business in Brazil and Latin America since the early 1960s. Activities started with the distribution of hydrocarbon fluids, either locally produced or imported from other regions. The chemical portfolio has evolved over the last decades to support industry needs across a great variety of segments and applications ranging from agriculture to plastics, from the tire industry to chemical intermediates. São Paulo has become ExxonMobil’s chemical headquarters in Latin America, but we also have chemical hubs in Colombia, Argentina and Mexico.
Today, the company’s chemical footprint in the region includes polyethylene, butyl rubber, adhesives and elastomers (solids), as well as hydrocarbon fluids, isomeric branched oxo alcohols, polymer modifiers and plasticizers (liquids). We support customers either directly or by leveraging strategic partnerships with global and regional branded distributors.
Can you tell us about EMC’s range of performance PE polymers and the application that they are used for?
EMC’s Exceed XP, Exceed and Enable performance polyethylene (PE) polymers are ideal for a range of applications. From solutions that require extreme performance to those that offer an optimum balance of stiffness, toughness and processing capabilities. These metallocene linear low-density polyethylene (mLLDPE) are designed to support our customers on the development of innovative and sustainable solutions in flexible packaging, shrink and stretch, industrial and agricultural film applications. EMC is very proud of its superior technology capabilities and will continue bringing innovation to the flexible packaging industry. A new platform is coming soon, so please stay tuned!
Which factors have been driving the PE market in 2021, and where is demand coming from?
This answer requires us to step back and understand how Covid has impacted the overall petrochemical market. Traditionally, PE demand has a strong correlation with GDP growth. When the pandemic first hit, there were concerns about demand destruction due to economic inactivity and GDP decline. However, PE demand in 2020 was more resilient than expected. The pandemic resulted in people consuming food in a different way, such as buying from supermarkets where more packaging is needed, rather than going to restaurants, which buy ingredients in bulk. Positive growth trends were also observed on industrial applications, such as stretch & shrink, as well as agriculture, an important niche market in the region.
In 2021, while demand was still robust, the unprecedented winter storm Uri impacted global PE supply, as North America represents 20% of global capacity. In Latin America, regional manufacturing outages and the storm further increased supply tightness. Nevertheless, EMC has been able to support projected demand of our customers in Latam in the last 12 months, reinforcing our long term commitment to the region.
What capacity does EMC have in Brazil for the production and distribution of intermediates and polymers?
EMC does not have manufacturing capabilities in Brazil nowadays. We supply the Brazilian market taking advantage of our EMC integrated assets in association with a robust supply chain. Operations are coordinated by a best in class customer service organization based in Curitiba, where we have one of our Global Business Centers (GBC). Our portfolio is imported from USGC assets or Europe or Asia Pacific, either directly from customers or managed through our warehouses located in Paulinia, Santos and Itajai.
How does EMC source its raw material feedstock?
At most of our sites, EMC’s operations are integrated with our own refining operations within a single complex. These world-scale manufacturing plants provide the capacity to meet customer preferences and needs in every region. We also continue investing to support the PE industry. By 4Q21 we are starting up the GCGV JV (Gulf Coast Growth Ventures) in Corpus Christi, TX – US, adding a total of 1,300 kTa’s of LLDPE capacity in the Americas region.
What is ExxonMobil Chemical’s vision for the next two years in Brazil and Latin America?
Brazil represents ~50% of Latin America’s GDP and ~40% of total PE demand. Irrespective of economic uncertainties, in the non-OECD countries energy use will rise along with population growth, increasing access to modern energy and improving living standards. This economic growth also drives petrochemical demand which tends to rise and fall at multiples of GDP.
ExxonMobil is committed to producing the energy and chemical products that are essential to modern life, economic development and improved standards of living. In doing this, we are also committed to protecting people, the environment and the well-being of communities where we operate. We will continue to run our business in Latin America aligned with those principles, growing sustainably our high-value performance products to meet increasing demand.