UPDATE 1-Mexichem-Pemex joint venture will not rebuild blast-damaged plant

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MEXICO CITY, Dec 20 (Reuters) - A joint venture between Mexican chemicals company Mexichem and state oil firm Pemex has decided not to rebuild a petrochemical plant in southeastern Mexico badly damaged in a deadly explosion last year, Mexichem said on Wednesday.

Mexichem holds a 56 percent stake in the tie-up known as Petroquimica Mexicana de Vinilo (PMV), Pemex 44 percent. The blast at the vinyl petrochemical plant in the Gulf coast state of Veracruz in April 2016 killed more than 30 people.

Mexichem said in a statement that PMV had decided not to rebuild the production capacity and to discontinue the business. The step did not mean a withdrawal from the tie-up, nor would it affect the venture's cash flow, the company added.

Mexichem said last month that the plant's future would depend on insurers' assessment of the explosion.

(Reporting by Adriana Barrera and Julia Love; editing by Grant McCool)