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The project is the largest greenfield investment ever undertaken by a Brazilian company abroad, with an annual production capacity of 1.05 million tons of polyethylene

Chemical Industry

Major global project

Braskem Idesa is a 75-25 joint venture between Brazil’s Braskem, the largest producer of thermoplastic resins in the Ame ricas, and Grupo Idesa, a traditional petrochemical company in Mexico. As one of the project’s top suppliers of skills, technology and equipment, Siemens itself marshaled resources and employees from 11 different countries to collaborate on a truly multinational and multicultural level with Braskem Idesa and its global partners.

The project is the largest greenfield investment ever undertaken by a Brazilian company abroad, with an annual production capacity of 1.05 million tons of polyethylene. By the time Braskem Idesa began producing ethylene in April 2016 at the new $5.2 billion petrochemical complex in the state of Veracruz, Mexico, the project had, at its peak, employed 17,000 people. Of that number, a vast majority were Mexicans, while others on-site came from more than 23 countries throughout Europe, Asia, and the Americas.

Paths to growth merge

Driving the project from the beginning has been a convergence of the growth strategies of a country and a company – Mexico and Braskem. Despite its wealth of petrochemical resources, Mexico remains a major importer of polyethylene, which in various forms is used to manufacture everything from plastic bags and milk jugs to piping. To meet its growing needs – and to stimulate economic development – the country set a goal to establish Mexico’s first polyethylene production plant in the private sector. As an incentive to attract a company experienced at commissioning and operating such facilities, an auction was set for a 20-year supply of the raw material ethane from state-owned Petroleos Mexicanos (PEMEX).

The incentive aligned perfectly with Braskem’s strategy of internationalization and global growth. Anticipating an eventual slowdown in Brazil’s rapidly growing economy, Braskem had earlier launched a series of strategic international investments.

By 2010 and 2011, Braskem concluded acquisitions of seven polypropylene production facilities in the United States and Germany from Sunoco Chemicals and The Dow Chemical Company. “Braskem had also been looking to make an investment in Mexico for a long time,” said Braskem Idesa Project Director Stefan Lepecki. “The auction presented a perfect opportunity.”

Greenfield growth in Veracruz

Located in the municipality of Nanchital, Veracruz, some 325 miles southeast of Mexico City, the Braskem Idesa greenfield site neighbors PEMEX’s own petrochemical complex. The site also lies only five miles from the port city of Coatzacoalcos, with existing freight, rail, and highway access to meet the project’s significant logistical needs.

Still, Braskem Idesa would face challenges. “No one had ever undertaken a petrochemical project of this scale in Latin America,” said Lepecki. “When you build something like this in the United States, Europe, or Asia, you have resources already in place – EPC (engineering, procurement and construction) companies, service providers and infrastructure. In Latin America, we often have to start from scratch, build our own infrastructure, and call in inter-national companies to provide many of the services we need. But this is what we have to do to bring Latin American industries to the next level. And that’s one of the important steps we’re accomplishing with Braskem Idesa.”

International scope and strength

Global powerhouses in EPC, technology and systems for the petrochemical industry competed intensely for Etileno XXI’s business. At the core of the complex would be an ethane cracker with an annual capacity to produce 1.05 million tons of polyethylene, two high-density polyethylene plants (400,000 and 350,000 tons), and a low-density polyethylene plant (300,000 tons).

Siemens needed a new approach to differentiate itself. By the end of 2011, Siemens designated Braskem Idesa as a priority corporate customer and appointed Ricardo Vilaca Reis as corporate account manager to represent the entire Siemens portfolio for Braskem. Ricardo Reis’ strategy was to coordinate all relevant units within Siemens, draw on the company’s internatio¬¬nal strength and present a unified proposal and collaborative approach to Braskem Idesa.

“We had to recognize Etileno XXI as a project that Siemens units could not pursue individually,” said Ricardo Reis. “A capture team had to focus efforts on every aspect of the customer’s demands, using every resource available throughout Siemens’ global organization. The capture team needed to make contact and collaborate at many levels throughout Braskem Idesa as well as at the EPCs.”

He also stressed that in a project of such scale, adjustments would become necessary as changes inevitably occurred during the project’s development. “That is when project management becomes critical, adaptability is essential, and having connections at many levels in the organization expedites positive change.” Braskem Idesa’s Stefan Lepecki added, “It is important to have an international supplier with the power and depth of Siemens to understand the complexity of this type of project and help connect all the points of engineering, procurement and construction.”

For its part, Siemens had previous experience with members of the winning EPC joint venture for Etileno XXI – Odebrecht Industrial Engineering, Technip and ICA Fluor – and relationships that spanned continents.

“No one had ever undertaken a petro¬chemical project of this scale in Latin America.”
Stefan Lepecki, Project Director, Braskem Idesa Etileno XXI

Water/wastewater win opened the floodgates

In 2012, Siemens won its first award for Etileno XXI: water/wastewater treatment systems. The capture team used a collaborative approach between Siemens units from Brazil, Mexico, and the United States and executed with the Etileno XXI Joint Venture. This critical water technology was required at an early stage before further project development could proceed. “We collect our own water from a river and have to pretreat it before we can use it. And after we use the water, we must treat it again for reuse and return to the river in better condition than the water we first took out,” said Lepecki.

“We had to meet a lot of new environmental regulations, and this was a very important issue for Mexico, as well as for Siemens and us and the banks we received financing from. Siemens provided a lot of very good equipment and technology to our project – in fact, they were our second largest provider of equipment – but their water/wastewater systems were the most valuable technology they provided to our operation.”

Siemens Brazil provided the raw water treatment plant, while Siemens USA provided the oily wastewater treatment plant and a wet air oxidation unit. Siemens Mexico performed precommissioning and commissioning services. “The system is in the final commissioning phase and we count on Siemens support to conclude successfully all the performance tests,” said Lepecki. 

Main high-voltage substation

Collaborative efforts between businesses in Brazil, Germany, Italy, Mexico and the United States provided the strong technical and commercial positioning to capture Siemens’ second award: the main high-voltage substation. Close collaboration with EPC joint venture partners, as well, ensured the expertise required for successful execution. Seven units in total, the order included substation transformers for internal distribution, generator step-up (GSU) transformers, and a power transformers bank for an external distribution line and/or the main substation. 

Secondary medium-voltage substations

The technical complexity of the Braskem Idesa project required exceptional coordination and more than a yearlong intense effort to capture and fulfill the third order won by Siemens: all secondary medium-voltage substations. Collaboration between Siemens teams from Brazil, Canada, France, Germany, Italy, Mexico, and the United States supplied a complete solution of innovative technology, including a high-voltage, gas-insulated substation and related transformers, and medium-voltage systems that included gas-insulated and air-insulated switchgear, a motor control center, and a generator circuit breaker system. 

Medium-voltage transformers

The substation order was followed closely by an order for a range of medium-voltage transformers and related equipment. The transformers were manufactured in Colombia, but their contracting, delivery, and installation re¬quired close coordination between Siemens teams in Brazil, Colombia, Italy, and Mexico and Braskem Idesa’s on-site contrators.

Motors and drives

Siemens’ fifth order covered a range of motors and drives as well as transformers and switchgear related to a low- and medium-voltage portion of the project. Led by Siemens Japan, the team provided a single point of contact for the customer and coordinated work from factories in Austria, Czech Republic, Germany, Japan, Turkey and the United States, as well as with EPC Technip through an extruder OEM. Critical factors: meeting customer specifications with fewer deviations and providing quality engineering support from acquisition to execution.

Gas analyzers, shelters

Siemens’ sixth and final order was for gas analyzers, shelters, and a complete analytical solution. The team closely coordinated work at headquarters in Germany, the customer relationship through Siemens Italy, manufacturing at Siemens Singapore and the Philippines, and installation through Siemens Mexico. Global relationship management and commitment to an important delivery date proved key to the win.

“We took a complex multicultural and multiregional approach,” said Siemens’ Ricardo Reis. “But in the end, it worked for both Braskem Idesa and for us.” Clearly, Braskem Idesa agrees: “We hope to work again with Siemens on another project in the future,” said Braskem Idesa’s Stefan Lepecki.

Focus on the future

Braskem Idesa is now turning its focus to operations, process optimization, and commerciali¬zation. The company is developing a new corps of technically skilled employees and has sent many to Brazil and Europe for training on the operation and maintenance of Etileno XXI’s sophisticated equipment.

Perhaps the most important lesson Braskem Idesa takes away from Etileno XXI is a lesson for the entire region. “This was a mega project of huge complexity, and Mexico and Brazil have proved to the rest of Latin America and the world that we and others can accomplish something on this scale within Latin America again,” said Lepecki. 

Picture credits: Braskem Idesa