SAO PAULO — Braskem, a leading Brazilian polymer manufacturer, is working to resume normal operations at its Triunfo site in southern Brazil after an incident at a power substation disrupted electricity supply to some plants. The disruption, which occurred on February 14, has forced the company to reduce operating rates at certain facilities.

In a written response, Braskem stated, “Following a ‘unforeseen event’ at a power substation on 14 February, some facilities at Triunfo were forced to reduce their operating rates.” The company is actively working with its customers to “jointly evaluate the best solutions” for supply until production is normalized.

Although Braskem did not specify which production lines were affected or the extent of the reduction in operating rates, social media footage showed flaring at the site. Flaring, a practice of controlled burning of waste gases, is used to release pressure in emergency situations such as power outages or natural disasters like hurricanes.

The Triunfo site is Braskem’s largest facility in Brazil and is crucial for the country’s petrochemical industry. Located near Porto Alegre, the capital of the southernmost state of Rio Grande do Sul, Triunfo plays a key role in meeting Brazil’s demand for plastics.

Impact and Recovery Efforts

Braskem informed that the event affected substation 93, but part of the substation returned to operation on the same day. The company expects to have new progress in power supply and restart full operations by February 20. “Based on the information available to date, we expect to have new progress in [power] supply for consumption and restart [full operations] on 20 February,” said Braskem.

The company has immediately begun an investigation, which is still ongoing. “The company is in contact with its customers to jointly evaluate the best solutions until production is normalized,” Braskem added.

“Due to the reduced capacity, we ask that any additional needs be communicated to our technical teams for a joint evaluation of the best solutions.”

Triunfo Complex: A Key Player in Brazil’s Polymer Industry

Braskem is Brazil’s sole manufacturer of polyethylene (PE) and polypropylene (PP), the most widely used polymers. Its market share in 2023 for PE stood at 56% and for PP at 70%, according to figures from the ICIS Supply & Demand database. The Triunfo complex is key for the country’s polymers supply chain, accounting for nearly 37% of Brazil’s PP capacity and 40% of PE capacity.

Brazil’s total PP production capacity is nearly 2 million tonnes/year. PE capacity is about 3 million tonnes/year, with 41% being high-density polyethylene (HDPE), 33% being linear low-density polyethylene (LLDPE), and 26% being low-density polyethylene (LDPE).

The Triunfo complex can produce 740,000 tonnes/year of PP, 550,000 tonnes/year of HDPE, 385,000 tonnes/year of LDPE, and 300,000 tonnes/year of LLDPE.

Implications for the U.S. Market

The disruption at Braskem’s Triunfo site has significant implications for the global polymer market, including potential impacts on the U.S. market. Polyethylene and polypropylene are essential materials in various industries, from packaging to automotive and construction. Any disruption in supply can lead to increased prices and shortages, affecting manufacturers and consumers alike.

For instance, a similar incident in the U.S. occurred in 2017 when Hurricane Harvey disrupted operations at several petrochemical plants along the Gulf Coast. The storm caused widespread power outages and forced plants to shut down, leading to a temporary shortage of polyethylene and polypropylene. This event highlighted the vulnerability of the supply chain to natural disasters and infrastructure failures.

In the current scenario, Braskem’s efforts to resume operations and mitigate the impact on its customers are crucial. The company’s proactive approach in working with customers to find alternative solutions demonstrates its commitment to maintaining supply chain stability.

Future Considerations and Resilience

As the world becomes increasingly reliant on polymers, the importance of resilient and reliable supply chains cannot be overstated. Companies like Braskem must invest in robust infrastructure and emergency response plans to minimize the impact of unforeseen events.

Additionally, diversifying supply sources and investing in renewable energy solutions can help mitigate risks associated with power outages and natural disasters. For instance, some companies are exploring the use of solar and wind energy to power their operations, reducing dependence on traditional power grids.

In the U.S., companies are also investing in advanced technologies to enhance supply chain resilience. For example, the use of blockchain technology can improve transparency and traceability in the supply chain, helping companies quickly identify and respond to disruptions.