Project for polypropylene production in São Paulo
Petróleo Brasileiro S/A (PETROBRAS) announced that its Executive Board approved and the Board of Directors of its subsidiary, Petrobras Química S.A. ("Petroquisa"), ratified, an association with BRASKEM S.A. ("Braskem") to invest in a modern and competitive unit for the production and sale of polypropylene (the "Association").
This association is included in the Company's Strategic Plan, that has an objective for the petrochemical segment to expand selectively its participation in the Brazilian and South Cone petrochemical market, with emphasis on new projects to serve growth in the Brazilian market and, in this case, aim at meeting the growing demand for polypropylene, focusing on production costs competitiveness and on value creation for shareholders.
The Association will be formalized through a new partnership, of which voting capital will be held by Braskem (60%) and Petroquisa (40%). The new partnership will be jointly managed by both shareholders.
The new industrial unit will be built in the city of Paulínia, state of São Paulo, and will use polymer-grade propylene, to be supplied by Petrobas, as raw material. Operations are scheduled to start by the end of 2007, with an initial production of 300,000 tons/year. Investments in the new industrial unit are estimated at US$ 240 million, made up by approximately 30% of equity capital and 70% of long term financing.
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