SAO PAULO (ICIS)–Unigel will shut down its
Camacari nitrogen fertilizers plant in
the state of Bahia, as high natural gas prices
make it unprofitable, the Brazilian
petrochemicals and fertilizers producer said.
In a letter to the trade union representing the
plant’s workers, dated 1 November, the company
said Brazil’s state-owned energy major
Petrobras had maintained “unbearable and
infinitely superior” prices for natural gas
than those in the international markets.
The decision comes as Unigel’s financial woes
continue. Last week, it said its bondholders
had agreed to
extend a grace period for a coupon payment
the company
missed in October.
Unigel had idled the Camacari plant in June. In
July, it said it would produce at the plant
40,000 tonnes of automotive urea – used to
reduce emissions from cars’ exhaust gases – but
agricultural urea production was never resumed.
According to the trade union Sindiquimica
Bahia, the shutdown of Camacari will affect 384
workers, 264 direct employees and 120 indirect
employees.
In its letter to the union, Unigel said the
Camacari plant had been operating at a loss
since the end of 2022 and blamed Petrobras for
what it described as an unwillingness to
facilitate the continuity of production.
Natural gas is the key feedstock for production
of nitrogen fertilizers.
The charged words from Unigel came more than
four months after it and Petrobras had
signed a “strategic partnership” to explore
ways to keep Camacari’s production up and
running. Since then, nothing was ever heard
about that.
The Camacari plant – as well as that in
Laranjeiras, state of Sergipe – was a
lease from Petrobras, who in 2019 agreed
the 10-year arrangement.
“Throughout this period of losses, Proquigel
[subsidiary of Unigel operating Camacari,
Laranjeiras] reached out to Petrobras countless
times seeking a reduction in the price of
natural gas … even if it was a temporary
adjustment but, to date, no effort was made by
Petrobras, which maintains prices unbearable
and infinitely superior to in the international
market,” said Unigel.
“In the same spirit, Proquigel also reached out
to the Federal Government aiming to achieve
some legislative mechanism that could reduce
the price of natural gas to a level viable for
operations, but unfortunately did not obtain
any solution, even if temporary.”
Following the notification to workers on 1
November, a 30-day period opens in which
company and union are to negotiate redundancy
packages or relocations, according to Brazilian
labour regulations.
Meanwhile, Sindiquimica Bahia said it would
continue putting pressure “in the political
sphere” within Bahia, the federal government,
and Petrobras to find a solution allowing
Camacari to keep operating.
“Our concern as a union that defends workers’
rights is the preservation of…
Read More: Brazil’s Unigel shuts Camacari fertilizers plant on Petrobras ‘unbearable’