Petrochemicals - Brazil - Rhodia plans to grow through oxygenated solvents business

The Brazilian subsidiary of French chemical firm Rhodia is focusing on the oxygenated solvents market worldwide after investing US$60mn to increase production capacity over the past three years.

Rhodia's oxygenated solvents, both acetone and ethanol-based, are only produced in Brazil.

"In 2000, we started a process of internationalization of the product, through distributors and commercial offices worldwide," the company's director for the solvents division, Alexandre Castanho, told BNamericas. "Since then, our export volume has increased about 13 times."

According to Castanho, the oxygenated solvents market has been growing globally at a rate of 5% a year, replacing hydrocarbons and chlorinated solvents, which use unfriendly technologies in their production processes and are noxious and a risk to human health and the environment.

The firm produces 300,000t/y of oxygenated solvents, of which 20% is absorbed into Rhodia's own processes. Of the remainder, 50% is sold to the domestic market and 50% is exported, chiefly to Europe and other Latin American countries.

Global demand for solvents stands at 20Mt/y and the potential growth is in oxygenated solvents, according to Castanho, while the hydrocarbons solvents market has been stagnant. "In 2012, the oxygenated solvents market will represent 17Mt/y globally, of a total demand of 23Mt/y," he said.

GREEN SOLVENTS

Rhodia has an ongoing project to expand its solvents production from renewable sources.

"People talk about green solvents but they are only focused on the final product itself. In order to produce environmentally friendly solvents, you have to concentrate on the whole process," Castanho said.

According to the executive, the production process has to be energy efficient, use renewable feedstock, such as ethanol, and the final product has to be less "aggressive."

Castanho did not disclose the investment figure or when production is expected to start.

GLOBAL CRISIS

Rhodia will not stop investing in Brazil due to the economic crisis, the executive said.

"Latin America didn't suffer as much when the crisis hit. The industry in the region is cautious, not pessimistic," he said.

"There won't be a recession in Latin America and the industrial sector will still grow next year. However, Argentina is more likely to suffer the impacts because they have no credit," Castanho said, adding that "the Brazilian market will remain stable, though exports could experience some difficulties."

"Differentiated products will have opportunities to increase [Rhodia's] market share in 2009," Castanho said.

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