Brazilian petrochemical manufacturer Braskem increased its planned capital spending (capex) for this year to $1bn from $663mn in 2021, as it catches up on deferred plant maintenance.
Of the total capex, $895mn will be allocated for operations, with the remainder for strategic spending, the company said.
Operational investments will cover scheduled maintenance turnarounds at the Rio Grande do Sul plants, preparation for scheduled maintenance shutdowns at the Bahia plants in 2023, and maintenance postponed due to the Covid pandemic, among other issues.
"Our yearly expenditures just for maintenance of operations are on the $600mn level," Braskem chief financial officer Pedro Freitas said. "The pandemic made us postpone parts that were not mandatory. The delayed maintenances will be executed this year."
The company's strategic investments include the expansion of its biopolymers business and increasing recycled resin production capacity, Freitas added.
Braskem also announced $200mn in investments at the company's Braskem-Idesa joint venture in Mexico. Operating investments will be allocated mainly to projects related to efficiency, including expanding the ethane import capacity of the company's "fast track" program.
Braskem-Idesa's strategic allocation includes construction of an ethane import terminal with a potential partner in 2022, the company said.
Sales and production
Braskem's domestic resin sales declined by 5pc last year amid falling demand and increased imports.
Braskem sold 3.49mn metric tonnes of resin domestically in 2021, down from 3.66mn t in 2020. Fourth quarter domestic resin sales fell by 1pc from the prior quarter and 13pc from a year earlier.
In the US and Europe, 2021 resin sales increased by 7pc and 11pc, respectively. Mexico sales slipped 25pc year-on-year.
The company's profit margins last year widened for resins and chemicals in Brazil, for polypropylene (PP) in the US and Europe, and for polyethylene (PE) in Mexico. Braskem also benefited from depreciation of the Brazilian currency against the US dollar.
Braskem's average plant utilization rate at domestic operations was 81pc last year, unchanged from 2020.
Braskem's plants in the US ran at 86pc of capacity last year, down from 92pc in 2020. In Europe, utilization rates increased to 91pc from 79pc in 2020.
In Mexico, the Braskem-Idesa cracker and derivative units operated at 66pc of capacity in 2021, down from 74pc in the year earlier.
Braskem reported a $2.64bn net profit in 2021, rebounding from a loss of $1.37bn in 2020, largely because of better spreads and higher sales volumes for resins and main chemicals.
