Poland's Synthos puts $170 mln investment in Brazil on hold
By Jakub Iglewski
WARSAW, April 24 (Reuters) - Polish chemicals maker Synthos has put on hold its $170 million plan to build a synthetic rubber plant in Brazil on fears a key supplier may fail to provide the raw materials needed, its chief executive officer said.
Synthos expected the synthetic rubber plant to start production in 2016 or 2017. It made the investment conditional on the raw material butadiene being supplied by Brazil's top petrochemical firm Braskem.
Braskem, however, is facing issues related to a corruption scandal at Petrobras, its main supplier of oil and shareholder.
"We're carrying out all our investments as according to budget plans. Our project in Brazil is an exception," Synthos CEO Tomasz Kalwat told Reuters.
Michelin and its Italian rival Pirelli have signed multi-year deals with Synthos for the delivery of synthetic rubber from the plant worth 1.15 billion zlotys and 1.55 billion zlotys, respectively.
He said the investment was conditional upon Braskem signing a contract with Petrobras for oil supplies to produce the butadiene needed to make synthetic rubber.
"This condition has not yet been met," the Synthos CEO said.
"This has become a high-risk project and the conditions that we agreed upon earlier don't compensate that. We are in talks to change the contract (with the supplier)," he said. Continuación...