Petrobras sells business at a bargain price

The Brazilian state oil company Petrobras has agreed to sell Petroquimica Suape, an integrated polyester complex in the Brazilian state of Pernambuco, to Mexico’s Alpek for $385 million. The complex started up in 2013 at a cost of $2.3 billion. It has annual capacity to make 700,000 metric tons of purified terephthalic acid (PTA), 450,000 metric tons of polyethylene terephthalate (PET), and 90,000 metric tons of polyester fiber. Plagued by a massive corruption scandal in Brazil, low oil prices, and a Brazilian economy in deep recession, Petrobras has been disposing of non-oil related assets to generate cash. It has also earmarked its 36% stake in the petrochemical maker Braskem for sale. With 4.4 million metric tons per year of PTA and PET capacity, Alpek is among the largest polyester makers in the Americas. It grew over the years with purchases of businesses from DuPont and Eastman Chemical.