"Latin America, and especially Brazil, has a bright future in front of it in terms of green energy and raw materials, and this is the direction we are moving towards at Solvay."

Daniela Manique

CEO LATAM & PRESIDENT GLOBAL BUSINESS COATIS, SOLVAY (RHODIA)

January 19, 2024

Could you give us a background into Solvay’s presence in Brazil?

Solvay operates in Brazil under the name of Rhodia, which has been part of Solvay since 2011. Rhodia is a legacy name with over 103 years presence; to go to our Paulínia site, one needs to cross the Rhodia road. Paulínia is Solvay’s largest site globally, a complex with 27 plants producing 1.2 million t/y of chemical products (phenols, solvents, polyamide, silica, etc.). This is also home to one of Solvay’s 12 major global R&D centers at our Paulínia site in the São Paulo state. Then, our secondary site in Santo André uses raw materials from Paulínia for further downstream products in the textile value chain. Smaller plants are found in Curitiba and Itatiba. Solvay registered over €1.8 billion in sales (2022), in Latin America out of a total turnover of €13.4 billion globally. Solvay has announced the global separation between its commodities and specialties businesses.

How is this impacting the Coatis business, headquartered in Brazil?

Solvay has announced it will divide into two independently traded companies, one focused on commodities and one on specialties, under the provisional names of EssentialCo or Eco, and SpecialtyCo. As of July 1st this year, we had a soft spin-off of ECO, following to proceed with the hard spin-off later in December. Currently, the specialty segments have a higher revenue contribution to the Group, of approximately 60%, versus 40%; to be able to allocate capex on an equal footing, it was important to treat the commodities business individually and garner more investment. We expect the new structure to encourage bigger investments for ECO. Coatis, headquartered in Brazil will represent about 25% of the new ECO company, making Latin America much more relevant for the organization.

The Paulínia site is known as one of the greenest in Latam. What has led to this reputation?

More than 80 years ago, Paulínia became a pioneering site for bio-based ethanol. When ethanol vessels coming from the northeast of Brazil were attacked by German vessels during the Second World War, Rhodia bought a coffee farm and turned it into a sugar cane farm, sugar becoming the raw material for our green chemistry up to this day. Today, Paulínia is preceded by its reputation as the site with the largest CO2 capture project in Latin America, reburning 4.5 million t/y of equivalent CO2. This is known as “Project Angela.” Our site is 95% carbon neutral, and we are soon closing the loop to make it 100% net zero.

Solvay’s Paulina is also well recognized for its success in preserving biodiversity. We continued to operate the site as a farm, using only 15% of the land for industrial activities while preserving the rest.

What is your growth strategy going forward?

Our strategy goes two ways: When we talk about commodities like phenols, basic solvents like acetone, ethyl acetate, and other molecules across the polyamide chain, we continue to work to increase our cost competitiveness by investing in digitalization and securing competitive raw materials. We do a lot of homework within the plants, running benchmarks to check coefficients, ensuring best practices, and implementing top technologies. The second part of our strategy goes to renewable and sustainable materials. For example, we recently launched a 100% bio-based ethyl acetate (bio-solvent under the name of Bio Etac). Other products from our Brazil portfolio are our Amni line, the world’s first polyamide yarn that is biodegradable in ocean waters. This is used in the textile segments.

How competitive is Brazil as a manufacturing base?

The tax reform will take some years to be applied, but this is a good sign for the industry. We have been working with the government and Petrobras on the best solutions for feedstocks and energy. That said, our cogeneration plant allows us to produce our own energy from biomass, which has been a huge asset in an energy volatile environment. We are now looking at investing in biomass boilers to decrease our natural gas consumption by up to 70%.

Do you have a final message?

Latin America, and especially Brazil, has a bright future in front of it in terms of green energy and raw materials, and this is the direction we are moving towards at Solvay.

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