Borealis Consolidates Brazilian Production Facilities
Borealis AG, Vienna, Austria, announces plant restructuring measures aimed at optimizing production in Brazil. Borealis has strengthened its market position in Brazil by way of a EUR 45 million investment in its Itatiba production facilities located near Sao Paulo. Borealis will be able to better capitalize on long-term growth opportunities in Brazil and the South American market by transferring production from its second plant in Triunfo to the newly upgraded and expanded Itatiba, a move scheduled for early 2015.
Borealis is stepping up its efforts in South America to meet increased market demand, in particular from leading automotive manufacturers and Original Equipment Manufacturers (OEMs). The EUR 45 million Itatiba investment is a key component of the long-term Borealis growth strategy and has involved the construction of an additional production building, state-of-the-art polypropylene (PP) compounding extruders, blending and raw material silos, warehouse facilities and a bagging line. In addition, extensive upgrading of utility and water systems has been carried out. With construction nearing completion, the commissioning and start-up plan has already commenced. The expanded and modernized facility is scheduled to be fully on stream by the end of the fourth quarter of 2014. Its output will increase annual production volumes of high-performance, high-quality PP compounds in Brazil.
In Brazil, Borealis currently has production sites in Itatiba and Triunfo, with a total of around 150 employees. As development centres and PP compound producers for the automotive, appliances and pioneering applications fields, combined annual production capacity is currently around 60 kt. More than 100 customers in Brazil and Argentina are now being served. Physical expansion of the Triunfo plant is not feasible because of space restrictions inside the petrochemical complex. Because most of Borealis’ Brazilian customers are located nearer to Sao Paulo, the closer proximity will result in freight optimization, an additional advantage of consolidating operations in Itatiba. Once production of all grades is transferred from Triunfo to Itatiba, Borealis customers in South America will be able to rely on a seamless and secure supply from the Itatiba plant.
Ceasing production at the ageing Triunfo plant is a necessary step in the implementation of the Borealis Group's "scrap and build" strategy, which entails ongoing investment in its most modern facilities. Borealis will seek to transfer as many of the approximately 30 Triunfo employees as possible to the Itatiba site or relocate within the existing petrochemical complex in Triunfo. Where reassignment is not feasible, severance schemes will be offered.
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