The Brazilian government is developing a timetable to reduce the tax burden on petrochemicals companies as part of planned measures to revitalise the sector, according to Luciano Coutinho, president of the national development bank, BNDES (www.bndes.gov.br). The sector has been impacted by a long period of appreciation of the Brazilian real and rising international competition, he said at a conference organised by the National Confederation of Industries (CNI, Brasilia; www.cni.org.br) earlier this month.

“It is essential that we preserve the Brazilian petrochemicals and chemicals industry, because we have a huge opportunity regarding the raw materials that will become available in the future,” Coutinho was quoted as saying by local news service Valor Econômico. Brazil plans to use gas produced from its offshore pre-salt oil discoveries for petrochemicals production. The government is also preparing a series of incentives and support for the process of innovation, Coutinho said.

Details of the proposed tax cuts and other measures were not discussed, as they depend on the final decision from the Ministry of Finance, he added.

The Brazilian petrochemicals sector is based mainly on naphtha feedstock, and faces strong competition from US production based on low-cost shale gas feedstock.