Dutch Bio-PE leader aims to cater to Asian market through JV with SCG

FRIDAY, APRIL 12, 2024

Thailand's agricultural diversity and geographic location make it a prime candidate for becoming a major bio-polyethylene (Bio-PE) manufacturer, the world's first and only Bio-PE manfacturer, Braskem Netherlands BV, said.

Speaking in an online interview on Thursday, Braskem CEO Walmir Soller said their confidence grew after the collaboration with SCG Chemicals (SCGC) to form Braskem Siam, a joint venture firm, last year.

The aim is to produce 200,000 tonnes of bioethylene per year in Thailand, which will then be converted to biopolyethylene.

When asked what potential he saw in Thailand, Soller pointed to the country's high biodiversity and the abundance of sugar cane and other agricultural products that could be used as raw materials for Bio-PE production, such as maize and cassava.

He said the kingdom had a favourable business environment and a strategic location for increasing industrial presence in Asia and supporting global markets.

Providing updates on the project's progress in Thailand, he said: "We are currently in the process of developing the engineering for the project. We should complete this step by the end of the year with the goal of making a final investment decision in the first half of 2025," he said.

The final decision would include the cost and operating conditions, he added, believing that the project's benefits would extend beyond just the production and export of bio-polyethylene, as the project would also source local ethanol.

Walmir Soller

This ethanol could also be an important alternative to local ethanol as EV production increases.

"So, it's important to say that besides the engineering development right now, the evolution of the regulatory framework for the industrial use of ethanol in in Thailand is also very important," Soller said.

Braskem's bio-based polyethylene, marketed under the brand "I'm green”, is made from ethanol derived from agricultural sources. This bio-based polyethylene is considered a raw material that can be used to make plastics instead of traditional fossil feedstocks like oil naphtha.

Citing its success in producing Bio-PE from sugar cane in Brazil, Soller said the company intends to bring that 14-year-old knowledge, technology, and development to Thailand.

"We are the global leaders in bio-based polymers. We currently produce in Brazil and export to all continents around the world. The project we are developing in Thailand with SCG replicates the same business model that we have in Brazil, which produces bio-based products including polyethylene," he said.

Braskem's current capacity for producing bio-based polyethylene is 260,000 tonnes per year, an increase from 200,000 tonnes last year.

He said the plant in Thailand would focus on the Asian market. However, the company is considering using this production facility as an export platform to serve the markets in Europe and the Americas in specific grades and applications.

Dutch Bio-PE leader aims to cater to Asian market through JV with SCG

Meanwhile, as countries around the world impose strict regulations to combat global warming, including controls on carbon emissions from businesses and manufacturing, Soller believes that Thailand's upcoming Bio-PE facility will meet market demand by providing the necessary solution for reducing carbon dioxide emissions.

"The carbon footprint of biopolyethylene is actually negative. So, when we produce, we remove carbon rather than emit it," he said. "One advantage we have with bio-polyethylene is that it is a drop -in  product. So, what does this mean? This means you can create the exact same package with the same specifications and equipment without having to replace the machines that produce traditional plastics. You do not need to do anything other than use biomass as a feedstock. Meanwhile, to demonstrate that this is a bio origin rather than a fossil origin, we employ the same technique as what's used to determine the age of dinosaurs, known as carbon dating."

Despite having confidence in its local partner and the country's strong commitment to the green economy, Soller identified some challenges, particularly regulations.

"Before we take the investment decision, we need to be sure that there is no any regulatory limitation for the use of ethanol for industrial application and, of course, the challenge of being competitive worldwide because we see that in the future there would be other companies entering these markets," he said.

However, he is confident that Braskem will find strong support in Thailand to invest in the long run, while also exploring more ways to proceed with this investment.

Dutch Bio-PE leader aims to cater to Asian market through JV with SCG

Braskem is a global petrochemical company with industrial units in Brazil, the United States, Mexico, Europe, and Asia. It was founded in 2002 through the merger of six Odebrecht Organisation companies and the Mariani Group. With customers in over 71 countries, the company is the Americas' market leader and a pioneer in industrial-scale biopolymer and bio-based polyethylene production.

As of December 31, 2023, Braskem reported earnings from full year sales at 70.569 billion Brazilian real (US$13.87), down from 96.519 billion Brazilian real ($18.97 billion) in the previous year.