Braskem, Latin America's largest petrochemical company, has reached an agreement to acquire 70.59% of plastic maker Solvay Indupa for US$290 million from Belgium owner Solvay. Braskem CEO Carlos Fadigas said Braskem would acquire Solvay Indupa mainly through assuming its debts, along with a small cash disbursement. The purchase requires approval from Brazil's antitrust agency and if it is approved, Braskem will offer to buy Solvay Indupa's remaining stock.

The acquisition confirms Braskem's commitment to develop the petrochemical and plastics industries in Brazil and South America by strengthening the vinyl chain and by its decision to continue investing to support the growth of its clients. It also establishes an industrial base in Argentina, a market in which Braskem already has maintained a commercial presence for over 20 years.

While Solvay Indupa produces PVC and caustic soda and owns two integrated industrial facilities in Brazil and Argentina, in 2007, it also began studying how to produce PVC from sugarcane-based ethanol in a process similar to Braskem's green polyethylene production.

Created in 1948, Solvay Indupa has annual production capacity of 540 kilotonnes of PVC and 350 kilotonnes of caustic soda. Once the acquisition is finalised, Braskem will increase its annual production capacity to 1.25 million tonnes of PVC and 890 kilotonnes of caustic soda.

"Vinyl is a strategic market for our company. Braskem recently invested around R$1 billion in a PVC plant in the state of Alagoas, which was inaugurated in 2012, in order to meet the strong growth in demand for this resin associated with the growth in Brazil's infrastructure sector," said Carlos Fadigas.

This deal is Braskem's first move into production in Argentina, which intends to lure foreign companies to develop the Vaca Muerta field, one of the biggest shale reserves in the western hemisphere. Braskem is building a US$4.5 billion plant in Mexico and studying options for investment in the US to access cheap natural gas rather than the more expensive naptha fuel stock it uses at most existing plants, according to a Reuters report.