In 2011, an Italian plastics giant surprised the market with plans to build the one of the world’s largest PET plastics plants in Corpus Christi, an enormous undertaking that would shift global trade patterns and vastly expand the U.S. capacity to produce the material, used to make many types of bottles and packaging.
Years later, the project is far from complete and its owner, PET plastics conglomerate Mossi & Ghisolfi, is mired in bankruptcy court after construction costs ran well over budget. The proceedings have exposed disputes with suppliers and lenders, including a Mexican bank that has alleged that the company surreptitiously diverted loans to fund the Corpus Christi project. Three foreign PET producers — Thailand’s Indorama Ventures, Mexico’s Alpek and Taiwan’s Far Eastern Investments — have formed a joint venture to buy the plant and resume construction, but experts agree it might be years before operations begin, if ever.
Analysts with research firm Wood Mackenzie on Wednesday said that the plant has the potential to transform the U.S. into a net exporter of PET resins, used in soda bottles and milk jugs. The plant, if completed, would to produce 1.1 million tons of PET a year, outpacing North American demand growth and creating export opportunities.
The firm’s analysts estimated that the plant could become partly operational by the third quarter of next year, but the timeline remains highly uncertain. The joint venture purchase is subject to regulatory approval while lender disputes have slowed the bankruptcy process. The plant also faces substantial construction challenges.
Mossi & Ghisolfi, through a web of subsidiaries, began building the plant in April 2013 and planned to finish in late 2015. It was projected to cost $1.1 billion.
Come October, the company had spent nearly $1.9 billion on the project, which remains less than 85 percent complete. Several of its subsidiaries filed for Chapter 11 bankruptcy protection with nearly $1.7 billion in debt owed mainly to foreign banks, as well as $250 million owed to suppliers.