• The last major investment by PEMEX in petrochemicals was the construction
of production complex “Morelos” in the late 80’s, this complex has been in
operation for more than 23 years.
• Early 90´s, there were an attempt to privatize all petrochemical production
complexes.
• Early 2000´s: Project FENIX… FENIX II…… FENIX III (version light)
• From 2008 to 2010, there was a bid process where the JV Braskem-Idesa was
awarded with the supply of Ethane to build a Ethylene cracker and its
derivatives.
Historical effort to make a change…
3
PEMEX Gas Pet.Básica – PGPB
Ethane Cracker
3 PE Plants
Ethane Ethylene 66,000 bpd 1,050 kT/a
1050 kT/a
PEMEX Expl. Prod. - PEP
Gas
HDPE 350 kT/a
LDPE 300 kT/a
HDPE 400 kT/a
What was Etileno XXI project? • It was the project aim to promote the production of 1 Million Tons of Ethylene
and derivatives through the first Mexican private cracker in Mexico.
• BRASKEM IDESA, a JV among the Brazilian BRASKEM and the Mexican IDESA
was awarded with a long term Ethane supply contract.
Polypropylene Polyethylene
Caustic Soda PVC
Basic Inputs Green Ethylene
28 Units in Brazil
5 Units in U.S.
2 Units in Germany
1 Project under implementation
Operational Units Projects under evaluation
Implementation Projects
Leading Petrochemical in Latin America
Largest producer of thermoplastic resins
in the Americas
Larger producer of polypropylene in the
US
First company in the world to launch a
Polyethylene production based on
renewables raw materials
Annual production capacity of 11
million tons of chemicals and
petrochemicals
Financial Ratios: 2011 (USD Mil Millones)
Revenue $ 17.2
EBITDA $ 1.9
Listed on stock exchanges in Brasil, NY
and Spain
Shareholders: Grupo Odebrecht 53,8% Petrobras 46.2% (% del Capital Votante)
Who are the Joint Venture partners?
Bahia - Brasil
1 UNIB
4 PE
1 PP
1 PVC
1 Cloro Soda
Alagoas - Brasil
1 PVC
1 Cloro Soda
São Paulo - Brasil
2 UNIB
2 PE
2 PP
Rio de Janeiro - Brasil
1 UNIB
1 PE
1 PP
Rio Grande do Sul - Brasil
2 UNIB
5 PE
2 PP
US
5 PP Neal | La Porte | Marcus Hook |
Freeport | Seadrift
Germany
2 PP Wesseling | Schkopau
Industrial Prescence
Projects
35 INDUSTRIAL UNITS
Who are the Joint Venture partners?
Fifth most important Mexican Player in
petrochemicals in Mexico with 56 years experience.
Annual production capacity of 350 thousand tons of products
Indicadores Financieros 2011 Revenues $ 625 (million USD) EBITDA $ 86 (million USD) Assets 4 Industrial production units 12 Distribution branches
Mexican Private Shareholders
Who are the Joint Venture partners?
TIJUANA Baja California Norte
SALTILLO Coahuila
MONTERREY Nuevo León
QUERÉTARO Querétaro
LEÓN Guanajuato
IRAPUATO COATZACOALCOS Veracruz
PUEBLA Puebla
DISTRITO FEDERAL
APIZACO Tlaxcala
GUADALAJARA Jalisco
CULIACÁN Sinaloa
Idesa Petroquímica
Alveg Distribuidor
Idesa Corporativo
Braskem-Idesa Joint venture
Negocios de
Aplicación Joint venture
Excellence Sea & Land
Logistics Logística
VERACRUZ Veracruz
Who are the Joint Venture partners?
Successful factors in the Petrochemical industry:
o Access to market
o Raw Materials
o Technology
o Human Talent
Competitiveness in the Industry
Successful factors in the Petrochemical industry:
o Access to market
o Raw Materials
o Technology
o Human Talent
Competitiveness in the Industry
Manufacturing Production Index (2007=100)* Mexican exports (2007=100)*
80
90
100
110
2007 2008 2009 2010 2011
México
Estados Unidos
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%
2007 2008 2009 2010 2011 2012
Química
Mexico´s Economic Cycle related to the US
Manufacturing in Mexico closely follows up the US industry, however since
2009 the Mexican’s economy dynamics has being doing better
– Manufacturing production index is currently at levels above the
existing previous to 2008 crisis, while in the US the levels are lower
– Also, Mexico has not only recovered its employment levels but is
currently above crisis’ levels
Real exchange rate in Latin America
Exchange Rate Index (15/09/08=1)* Exchange Rate (against US D)*
• Mexico is the only country in Latin America which currently holds against a certain level of depreciation (After 2008 crisis) with respect to the US Dollar
• Mexico achieved a higher grade of competitiveness due to its exchange rate, for example, higher overall benefit on logistics costs and lower differential in the unit labor costs compared with Asian countries.
• Depreciation of the Mexican peso and the Canadian dollar have shown similar patterns, confirming that it is due to external factors rather than internal matters
0.9
0.95
1
1.05
1.1
10
10.5
11
11.5
12
12.5
13
13.5
14
14.5
15
01/2010 07/2010 01/2011 07/2011 01/2012
Peso México
Dólar Canadá
MX
pes
os
per
USD
CA
D d
olla
r p
er U
SD
Po
ints
Global competitiveness trends
• The manufacture is changing from off-shore outsourcing to near sourcing
• China is losing competitiveness:
• Chinese wages have risen between 15% to 20% annually over the past
decade,
• Logistics costs have increased and
• The Chinese yuan continues to appreciate
Monterrey to Chicago 4-5 days by land
(53 foot land container)
Shanghai to Chicago 22 days by sea and land
(40 foot maritime container)
Do
llars
per
ho
ur
Unit Labor Costs (USD/ hrs)* Transportation Costs (USD)*
Free trade Agreements Mexico has:
• 12 Free Trade Agreements with 44 countries (FTAs),
• 28 Agreements for the Promotion and Reciprocal Protection of
Investments
• 9 Trade Agreements (Economic Complementation Agreements and
partial scope agreements) in the framework of the Latin American
Integration Association (ALADI).
Commercial Map of Mexico*
Freed Trade Agreements Economic Cooperation Agreement Economic Partneship Agrements (EPA)
Sum of Imports & Exports as % of GDP
Mexico 58.6%
USA 21.6%
Brasil 18.5%
Successful factors in the Petrochemical industry:
o Access to market
o Raw Materials
o Technology
o Human Talent
Competitiveness in the Industry
Raw Material Competitiveness
• Crude/Gas ratio at record high levels in 2012
• It is expected that this ratio will continue in the medium term
Competitiveness of Mexican Ethylene
México
• The production of ethylene derivatives is based on Ethane as feedstock,
which puts it in on an advantage position compared to worldwide NAPHTA
based producers in other regions.
• The substantial increase on the supply of natural gas in North America
based on the revolution of the “Shale gas” has radically modified
international relative prices.
• Lower Natural Gas is beneficial as Raw Material as well as in operating cost
Etileno XXI
Successful factors in the Petrochemical industry:
o Access to market
o Raw Materials
o Technology
o Human Talent
Competitiveness in the Industry
HDPE Ineos - Loop Slurry
•High operability
•Transition Flexibility
•Low CAPEX, OPEX (low power and steam consumption) and maintenance cost
•Catalysts: high performance, flexibility of products and low sensitivity to poisons
•Reduced construction time
• PE technology is available to be licensee • Well known technologies available • The technology selection was driven by market requirements, operating costs, yields,
efficiency, royalties and suppliers history
LDPE Lyondell Basell - Lupotech T
•Tubular Reactor: Simple Process and operation, good operability, loweroperating pressure
•Transitions Flexibility
•Low OPEX: less energy consumption and excess of low pressure steam
Loop HDPE Mono
400 kty
Loop HDPE
Bimo/Inj. 350 kty
Tubular LDPE Homo
300 kty
19
Polyethylene Technologies
• Technological Research
• Customer Support
• Development of solutions and new
applications
• Processing Laboratory
• Investigation Laboratory
• physical
• chemical
• division
• rheology
• chromatography
• microscopy
• characterization
• Granulation Laboratory
Support from Braskem´s Technology Centers:
Pittsburg, USA and Triumfo, Brazil
R&D and application Center
Mission of encouraging the creation of value, having Know-how and skills to differentiate in the chain value.
R&D support from parent companies
• More than 160 MM USD in R&D assets • 170 researches in Triufo, Brazil • More than 200 registered patents • 8 pilots plants • Technology center in Pittsburgh, PA
• R&D center in Coatzacoalcos • Organic synthesis lab and analytical
development • Pilot plant • Relationship with Mexican R&D
centers and government agencies (CONACYT)
Successful factors in the Petrochemical industry:
o Access to market
o Raw Materials
o Technology
o Human Talent
Competitiveness in the Industry
113
393
648
687
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q
2012 2013 2014 2015
Hiring process forecast
Current staff members
113
• Initiating important recruitment stage
• Triple the size of organization structure in 2013 and almost double in 2014
Human resources challenge
Etileno XXI project highlights
• Expected start operations in 2015
• Approximate fixed assets investment of 3.3 US Billions
• EPC JV was created among Technip (largest worldwide EPC), ODEBRECHT and ICA FLUOR
• World class technology and scale
• Favorable market conditions
• Deficit PE Mexican market
• Cost competitive production
• To be built in Coatzacoalcos, Veracruz
Location
Customs area
Terminal for railcars
Bulk terminal terminal
PEMEX Petroquimica productions complexes
Tecnimont Índia
Braskem Sao Paulo
Technip Lyon
Tecnimont Milan
Technip Roma
Axens Houston
Technip USA Claremont
Terreno Nanchital
Braskem Idesa CNO/ICA Fluor
Mexico DF Technip Índia
Katoen Natie Antwerp
1.863 people working world wide
Equipo Internacional EPC staff
Project Schedule
28
2010 2011 2012 2013 2014 2015
Construcción (electro mecánica y civil)
Preparación de Terreno
Pilotes
Cimentaciones
Construcción Electromecánica
Tests
Ingeniería de Detalle
Procura (Compra)
Ing. Procura y Construcción IPC
FEL 1
FEL 2
Ing. BASICA FEL3
Actividades del IPC
anticipadas
Project FinanceCierre Financiero
Arranque
Logistic
Utilities
LDPE
Cracker
Progreso de la Preparación del Terreno Land preparation…..land is ready
40
41
25
16 10
Equipment acquired by Plant
Cracker
PEAD
PEBD
Utilities
Bulk
130+ equipments PO’s has already been placed
61% 20%
19%
Geographic Distribution
Europa
Asia
América
Procurement
Currently Committed
• Identify, pictures, GPS Tags and removal of flora
• Transfer to environmental reserve to be replanted
• ID: Photos, GPS Tags
34
Environmental activities during
land preparation
•Capture
•Relocation to environmental reserve
•Release
•So far in the environmental program for Wildlife relocation, we counted a total of 422 individuals belonging to 64 species
35
Environmental activities during
land preparation