Stefan Lepecki CEO, BRASKEM IDESA
"We have strengthened our relationship with Pemex and the government, and importantly, we will create an alternative to Pemex for ethane supply."
Has demand for Braskem Idesa’s products kept up in 2022?
Inflation is creating a complex global situation and many countries are starting to talk about a recession. Braskem Idesa has not yet seen a strong decrease in demand for our polyethylene products in 2022 – both domestic and export markets have remained robust. We are, however, concerned about the future. Fortunately, the growth of polyethylene consumption is normally higher than the GDP, depending on the country. The petrochemical sector in general as well as Braskem Idesa had an excellent year in 2021. The polyethylene business is global and everything is connected, including factors such as the Chinese economy. We are aware of the circularity of the industry and therefore must not react too quickly to increases and decreases of demand or inflation, but rather prepare the company to deal with any scenario.
What is the status of Braskem Idesa’s Puerto Mexico Chemical Terminal in Veracruz?
In 2021, we had an agreement with Pemex where we reviewed the commercial conditions of our contract, and established conditions for Braskem Idesa to implement the terminal. This agreement gives us the support of Pemex, Interoceanic Corridor of the Tehuantepec Isthmus (CIIT), and the port authorities to progress this investment, including the concession of the right of way in lands that belongs to Pemex. By obtaining the concession, we are allowed to implement our pier, and are currently in the process of buying the land from CITT and the port authority. We have strengthened our relationship with Pemex and the government, and importantly, we will create an alternative to Pemex for ethane supply, which will provide more feedstock for Pemex to produce their petrochemicals to supply the industry in Mexico. The Puerto Mexico Chemical Terminal in Veracruz will start operations in the second half of 2024.
Can you elaborate on your partnership with Alcamare for PCR (Post-Consumed Resin) products?
From a circular economy perspective, both chemical and mechanical recycling are relevant, but in the short term there is already great potential for mechanical recycling in Mexico. The most important piece of the puzzle in the recycling process is the collection of waste. Braskem Idesa has a partnership with Mexico’s leading recycling company, Alcamare, which has a recycling plant in Querétaro, 17 collection centers across the country, and the technology to segregate and clean waste. They collect our resin, mix it with their recycled waste, and using our joint technologies and expertise, produce high quality post-consumed resin (PCR). In collaboration, Braskem Idesa and Alcamare will launch a high quality, FDA approved recycled resin for food content markets by the end of the year.
How can petrochemical producers balance increasing production and reducing greenhouse gas emissions?
We believe that plastic demand will continue to grow, and have the responsibility to produce plastic without affecting the environment. One of the steps we are focused on is finding opportunities to produce polyethylene more efficiently. In 2021, the company was able to reduce its emissions by approximately 100,000 tons by optimizing our power plant system. This is one factor on the path to achieving 50% CO2 emissions reduction by 2028 and carbon neutrality by 2050. However, we also need technology development and a way to capture CO2 emissions to transform into products that can be absorbed by the market. Braskem Idesa is therefore establishing agreements with technology companies working on emission reduction, carbon capturing, storage, and transformation.
What potential do you see for Mexico’s petrochemical industry?
There is tremendous potential despite political issues and instability in the energy sector. Mexico has a strong domestic market, great availability of natural resources, proximity to important markets such as the US, free trade agreements, a competitive labor force, and logistic capabilities to export. The current global situation reinforces this importance of establishing investments in Mexico.