Brazilian resins producer Braskem (São Paulo; www.braskem.com.br) said its first quarter net profit plunged 50% to BRL 152m (EUR 59.7m) compared with the same period last year, impacted by higher raw material prices and financial expenses. However, sales volumes and basic petrochemical prices improved, helping to lift the company’s revenues by 11% to BRL 8.23 bn (EUR 3.2 bn). EBITDA fell 14% to BRL 787m (EUR 309m) for the quarter, Braskem said. “The higher sales volume and 6% appreciation of the dollar in the period were insufficient to offset the lower spreads in thermoplastic resins and basic materials, which decreased 31% and 22% respectively,” it stated.

Margins were depressed as a result of a sharp increase in the price of naphtha, a key raw material for Braskem. Naphtha prices rose by 16% in the first quarter compared with the fourth quarter of 2011, reflecting higher oil prices caused by geopolitical tensions in the Middle East.

Braskem said its domestic sales volumes for polyolefins rose 9% in Q1 compared with the same period last year, while exports were 12% higher. Domestic sales of PVC soared 23%, reflecting the continued strong performance of the Brazilian construction industry and improved supplies. Growth in the construction industry is being boosted by the growing middle class and opportunities associated with 2014 Soccer World Cup and the 2016 Summer Olympics.

Brazilian thermoplastics demand started improving again in the first quarter, after flat demand in 2011. Domestic demand for thermoplastics rose by 3% compared with the fourth quarter last year, Braskem said.

The company plunged into the red last year as a result of the weak thermoplastics demand and higher financial expenses caused by the appreciation of the dollar. It reported a full year net loss of BRL 517m (EUR 203m), compared with a BRL 1.9 bn (EUR 746m) profit in 2010. Full year revenues were 30% higher at BRL 33.2 bn (EUR 13 bn).

In an update on ongoing projects, Braskem said its 200,000 t/y PVC plant in Marechal Deodoro, in Alagoas state, will begin operations this month. Also in Brazil, the company expects to start up a 100,000 t/y butadiene plant in Triunfo, in Rio Grande do Sul state, by July 2012 – see Plasteurope.com of 04.01.2012. In Mexico, the Braskem Idesa joint venture with Mexico’s Idesa (Mexico City; www.idesa.com.mx) intends to begin construction of its “Ethylene XXI” cracker and PE project this month, ahead of a scheduled start-up in 2015.