MOSCOW (MRC) -- Brazil's Braskem, the largest petrochemical producer in Latin America, is watching to see if US President-elect Donald Trump's protectionist campaign talk affects its huge new plant in Mexico, Chief Executive Officer Fernando Musa said on Thursday, reported Reuters.
Braskem and Mexican partner Idesa invested USD5.2 B in the Etileno XXI complex that started up in June to turn ethane gas into ethylene and polyethylene (PE) per year.
"We need to wait and see how electoral rhetoric translates into governing reality," Musa said on an earnings call, adding that the plant will remain focused on exports, with opportunities in the United States, South America and Europe.
"In general, we expect the Mexican economy, and our ability to sell products in other regions if we cannot in the United States, will guarantee the competitive and profitable sale of Mexican production, regardless of trade barriers," he said.
Earlier Thursday, Braskem posted 3Q net income of USD253 MM, down 45% from a year earlier, as a currency swing hurt results.
Earnings before interest, taxes, depreciation and amortization (EBITDA), a gauge of operating profitability, fell 17% in Brazil to USD630 MM. EBITDA that included foreign operations was steady at USD860 MM.
Musa said Brazilian clients in some segments were restocking after a deep recession, adding to concrete signs of recovering domestic demand.
Asked about expectations that Brazil's state oil company Petroleo Brasileiro would sell its 36% stake in Braskem, Musa said there was still some uncertainty about the process, without elaborating.
As MRC wrote previously, since early 2016, Petrobras has been seeking to sell its 5.8 billion Brazilian real (USD1.4 billion) stake in petrochemical producer Braskem SA. Petrobras hired Brazilian bank Banco Bradesco SA as a financial adviser and has started to pitch the sale to foreign investors. Petrobras owns a 36 percent stake in Braskem, Latin America's largest petrochemical producer. The sale would help Petrobras meet its target of selling USD15.1 billion worth of assets in 2015-16, a key part of its plan to cut debt as oil prices plunge to 12-year lows.
Braskem S.A. produces petrochemicals and generates electricity. The Company produces ethylene, propylene, benzene, toluene, xylenes, butadiene, butene, isoprene, dicyclopentediene, MTBE, caprolactam, ammonium sulfate, cyclohexene, polyethylene theraphtalat, polyethylene, and polyvinyl chloride (PVC).