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Braskem to Supply "Green" PE to Procter & Gamble

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Brazilian petrochemical company Braskem (NYSE: BAK) will supply its sugarcane ethanol-based polyethylene (PE) to multinational consumer products company Procter & Gamble's (P&G) (NYSE: PG) cosmetics lines Pantene, Max Factor and Cover Girl packaging.

P&G already uses Braskem's oil-based PE, but negotiations on "green" PE supply began when the Brazilian firm started the biopolymer project, approximately three years ago, Braskem's polymers business VP Rui Chammas told journalists during an event in Sao Paulo.

Braskem expected to begin producing the "green" resin this month at the Triunfo petrochemical hub, in Rio Grande do Sul state. Investments in the 200,000t/y plant reached 500mn reais (US$283mn).
The first P&G product line to use the sugarcane ethanol resin is Pantene, and packaging made with the biopolymer will be available from 2011, according to P&G corporate affairs director in Brazil, Gabriela Onofre. P&G plans to expand the use of the "green" PE beyond to other items, Gabriela said.
Chammas added that most of the plant's production has already been negotiated with approximately 20 Brazilian and foreign companies, from which 10 were not publicly disclosed. "More than two-thirds of the production will be exported," Chammas said.

Some of the firms that will use the "green" resin are Japanese automobile manufacturer Toyota, Tetra Pak, Johnson & Johnson, Estrela, Shiseido, Acinplas and Petropack. According to Chammas, PE is the most commonly used plastic globally, with annual global demand of some 70Mt, and has several applications in both flexible and rigid packaging.

The executive explained that sugarcane PE has a greater appeal in mature economies, mostly in Europe, Japan and South Korea in Asia, and the US.
The part of the production that has not been negotiated will be used by the company as part of its commercialization strategy, Braskem's institutional affairs VP Marcelo Lyra said.

Lyra also pointed out that even though the company's "green" PE is more expensive than the petrochemical-based one, it is the most competitive of all other biopolymers.

Braskem is the third biggest consumer of ethanol in the country, with some 700Ml annually, which it also uses to supply its bio-additive ethyl tertiary butyl ether (ETBE) plants in Bahia and Rio Grande do Sul. The ethanol is purchased from about 10 mills, including Cosan, ETH and Guarani.
Expansion plans for Braskem's "green" PE are progressing, as well as research into the development of 100% renewably sourced polypropylene, Lyra added.


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