Braskem CEO watching if Trump presidency affects Mexican plant
(Reuters) Brazil's Braskem, the largest petrochemical producer in Latin America, is watching to see if US President-elect Donald Trump's protectionist campaign talk affects its huge new plant in Mexico, Chief Executive Officer Fernando Musa said on Thursday.
Braskem and Mexican partner Idesa invested $5.2 B in the Etileno XXI complex that started up in June to turn ethane gas into ethylene and polyethylene per year.
"We need to wait and see how electoral rhetoric translates into governing reality," Musa said on an earnings call, adding that the plant will remain focused on exports, with opportunities in the United States, South America and Europe.
"In general, we expect the Mexican economy, and our ability to sell products in other regions if we cannot in the United States, will guarantee the competitive and profitable sale of Mexican production, regardless of trade barriers," he said.
Earlier Thursday, Braskem posted 3Q net income of $253 MM, down 45% from a year earlier, as a currency swing hurt results.
Earnings before interest, taxes, depreciation and amortization (EBITDA), a gauge of operating profitability, fell 17% in Brazil to $630 MM. EBITDA that included foreign operations was steady at $860 MM.
Musa said Brazilian clients in some segments were restocking after a deep recession, adding to concrete signs of recovering domestic demand.
Asked about expectations that Brazil's state oil company Petroleo Brasileiro would sell its 36% stake in Braskem, Musa said there was still some uncertainty about the process, without elaborating.
Reporting by Alberto Alerigi Jr. and Brad Haynes; Editing by Jason Neely and Jeffrey Benkoe
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