Brazil’s Braskem Makes a Giant Bet on North America

braskemIn recent years, several of Brazil’s largest companies have aggressively expanded their presence in North America by acquiring major U.S. firms in a range of sectors. In 2008, InBev, the Belgian-Brazilian beer company, acquired Anheuser-Busch, the largest brewer in North America. Giant Brazilian meatpacker JBS purchased both Swift & Company in 2007 and Pilgrim’s Pride in 2009, in deals that created the largest beef processor in the world. Over the past decade, Gerdau Group, one of Brazil’s largest steelmakers, has become the second-largest mini-mill steelmaker in North America after acquiring mills from numerous U.S. steelmakers.

No firm is more emblematic of Brazil’s industrial emergence in the U.S. than Braskem, the Brazilian petrochemical giant. Philadelphia-based Braskem America is the leading producer of polypropylene in the United States, with five production plants located in Texas, Pennsylvania and West Virginia, and a technology and innovation center in Pittsburgh. In the U.S, Braskem, co-owned by Brazilian conglomerate Odebrecht and Brazil’s state oil firm Petrobras, has directly invested a total of $600 million, highlighted by its 2010 acquisitions of both Sunoco Chemicals (for $350 million) and Dow Chemical’s propylene business (for $160 million).

Now Braskem is partnering with Mexican oil company Pemex and Grupo IDESA, a large Mexican petrochemical group, to build a $3.2 billion integrated petrochemical complex in the Coatzacoalcos Petrochemical Complex in the Mexican state of Veracruz. The giant facility is scheduled to go on-stream in 2015.

Why has Braskem made both the U.S. and Mexico a priority in its global expansion plans? Three years after its costly U.S. acquisitions, what new opportunities and challenges is Braskem facing in North America? What role does technological innovation play in the company’s expansion plans? Despite such ambitions, in what ways might its style of management remain distinctively Brazilian despite future growth?

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