Sahara Petrochemicals Al Jubail and Rohm & Haas to Develop Acrylates Complex in Al Jubail – Chemical Market Resources Inc. – Accomplishment in 18 months – from Concept to Execution
Chemical Market Resources Inc is proud to announce the joint venture announcement between Sahara Petrochemicals – Al Jubail and Rohm & Haas to develop an acrylates complex in Al Jubail complex in Saudi Arabia.
Chemical Market Resources assisted Sahara Petrochemicals from concept to JV execution via complex concept design, technology evaluations, and introduction of major players.
Mr. Esaf Himdy, Executive President of Sahara Petrochemicals complimented CMR Inc.’s performance as …” CMR Inc. is the first company we have worked with that accomplished the task in a low key.. nose to the grind-stone approach.. hard work and tenacious effort to reach the set goals… We are very thankful to them for this… the best in the business,.. if you want to achieve your goals… and no fanfare…CMR Inc is the company for you…“
Borouge – Borealis & ADNOC joint venture considers further strategic expansion of polyolefins operations
Borouge announced that it has initiated the feasibility study for Borouge 3: a further expansion of its polyolefin operations in Abu Dhabi to add approximately 2.5 million tons per year of capacity by 2014.
The proposed expansion would enable Borouge, a joint venture between the Abu Dhabi National Oil Company (ADNOC) and Borealis, to meet the growing demands of specific polyethylene and polypropylene markets in the Middle East and Asia in pursuit of its strategy to create value through innovation.
The Borouge 3 study will explore options to take advantage of additional feedstock becoming available from planned upstream ADNOC expansions to expand both Polyethylene and Polypropylene production capacities beyond the current Borouge 2 Project which is under construction and on target for start-up in 2010.
Included in the Borouge 3 development scheme is an LDPE unit to produce high-performance material for wire & cable applications. Borouge co-owner Borealis is already the market leader in wire & cable applications and this further expansion would strengthen its global market leadership. The feasibility study will also explore ways to increase Borouge’s competitive position in Pipe, Automotive, and Advanced Packaging applications to serve customers with completely new product generations.
The proposed expansion will boost Borouge’s total production capacity to 4.5 million tons per year. It will be located alongside the existing Borouge 1 and Borouge 2 petrochemical complex at Ruwais, Abu Dhabi, in the United Arab Emirates.
Borouge’s current capacity is 600 KT of polyethylene per year, and the Borouge 2 expansion project will increase capacity to 2 million tons per year. Construction of Borouge 2 began in late 2007 and consists of an ethane cracker of 1.5 million tons per year, an olefins conversion unit of 752 KT per year (the world’s largest), two Borstar® polypropylene plants with a combined annual capacity of 800 KT, along with a new Borstar Enhanced polyethylene plant with an annual capacity of 540 KT.
Comments: There has been a lot of activity in Abu Dhabi in the petrochemical sector. If all the announced plans materialize the company will become a major petrochemical hub in the region. History suggests that the country has been very successful in meeting its objectives in the petrochemical industry. Borealis with Borouge joint venture has been successful in securing a reliable source of cost-advantaged feedstock and does not face competition from other players in the country.
Yemen considers multi-billion dollar oil refining and petrochemical complex
Yemen is considering plans for a multi-billion dollar oil refining and petrochemical complex. Yemen is looking at development plans similar to those being undertaken by its neighbors, with investments from abroad. The oil refinery is planned at an investment outlay of US$2.5 billion and will have the capacity to produce 200,000 bpd. The government plans to take a lead role in the development, as it was unhappy with the length of time private companies had taken to develop smaller domestic refining projects. The open sectors of oil investments are located at a safe distance from the volcano.
Comments: Yemen currently does not have any major petrochemical complex. If these plans are realized then it would be the first petrochemical complex of its kind in Yemen. The current petrochemical industry in Yemen is centered on fertilizers. Private factories in Yemen produce detergents out of linear alkyl benzene (LAB) which they have been importing at a high cost. As the feedstocks for the production of LAB became available in Yemen, the oil ministry and its Yemeni Oil Refinery Co. have been encouraging investment in a LAB plant to be built locally with a capacity of 50 KT. In 1998, HSAG began considering involvement in the petrochemical business. It has since studied proposals to have a plant to produce polyvinyl chloride (PVC) and polyethylene pipes for water distribution, wastewater collection, and the insulation of electric cables. HSAG’s factory in Hadhramout started up in 1996, producing polyurethane flexible foam. Yemen’s GDP in 2007 was estimated at $22.74 billion at the official exchange rate and $52.61 billion based on purchasing power parity (PPP). The per capita investment based on PPP was $2,400 in 2007. The country has been planning to expand its economy by increasing the production of oil and building a petrochemical complex.
SunAllomer to invest in high-value-added PP products
SunAllomer Ltd., announced its plans to invest in its Oita Works facility for the production of high-value-added polypropylene, the increased production capacity of existing plants, and the investment for realizing energy conservation in order to further strengthen competitiveness.
According to the company’s plan, the capacity will be increased by about 60 KT per year. In this capacity increase, the Spheripol technology process owned by LyondellBasell Industries and already used for the third line will be adopted in order to achieve cost reduction based on energy conservation and simpler plant management. Furthermore, this third line of Oita Works will be upgraded, by applying advanced LBI technology, in order to enable it to manufacture polypropylene having a higher concentration of rubber allowing for further product differentiation into high end & niche applications.
It is planned that all construction work should be completed by April 2010. SunAllomer, a joint venture of LyondellBasell Industries, Showa Denko K.K., and Nippon Oil Corporation, is one of Japan’s key polypropylene producers.
Comments: Recently there have been lots of investments in the commodity polypropylene markets. Japan, traditionally has had smaller plants and now in order to compete effectively in the global markets it is changing its way of participation. This decision of SunAllomer will enable the company to compete in high-value specialty markets – a trend that will increase in the developed regions.
India’s Essar Group plans to construct a polypropylene plant
The Essar group is planning to set up a polypropylene unit in Jamnagar. The company has not determined the investment and size of the unit and they are in negotiations with companies for a possible JV.
The plant will be most likely located in the special economic zone (SEZ) in Vadinar, an all-weather deep-draft natural port on India’s west coast. More than 60 percent of India’s crude oil imports land in and around this region.
The company has already applied for the necessary clearance for the proposed plant. The proposed plant would be near Essar Oil Ltd’s grassroots refinery in Gujarat, which was commissioned in 2006.
Essar’s refinery in Gujarat is the second private refinery in India’s state-dominated oil sector. Essar Oil’s refinery has a capacity of 10.5 million tonnes per annum (mtpa).
Comments: Essar Group has been planning a petrochemical complex in India for quite some time now. As the plans materialize we will hear more announcements from the company. There is significant new capacity being planned in India and it remains to be seen how many of these plans will materialize. A fragmented converting industry is a major bottleneck restricting the growth of polyolefins in India. Consolidation in the downstream industry will lead to even higher growth rates for polyolefins in India. The major producers of polypropylene in India include Reliance Industries and Haldia Petrochemical. The current capacity for PP in India is approximately 2,200 KT with Reliance accounting for 85% of the capacity. Indian Oil Corporation has plans to bring over 400 KT of PP capacity and Reliance also has plans for expanding its PP capacity by a significant amount. We anticipate that more information regarding the capacity, technology, and partners will be announced in the near future.
Samsung Total Petrochemicals plans to construct PP compounding plant in China
The joint venture between Total Petrochemicals and Samsung is planning to build a polypropylene compounding facility in Dongguan, Guangdong Province, in China. The facility will have three compounding lines with a total capacity of 28 KT per year. The project is expected to cost EUR 6 million and is expected to be completed in 2009.
Samsung Total Petrochemical said the new plant will allow it to market about 20% of its total polypropylene production in the form of compounds and would also improve service to customers by having local production. The plant’s products will be sold to customers in the South China market, targeting the electronics and household electrical appliances sector including refrigerators, dishwashers, and air conditioners.
Comments: This development plan by Samsung Total Petrochemical is in line with the rest of the industry and the trend worldwide for two reasons. First of all, large PP producers like Lyondell-Basell, ExxonMobil, Dow, and others have already started their compounding facilities instead of contracting typical custom compounders to cater to automotive and other industries. The end-users also prefer to deal directly with the resin producers for consistency and long-term supply.
Secondly, China is still the lucrative market to go after as we witnessed already. Other companies – both the resin producers and custom compounders have already set up their compounding facilities in China to cater to the huge demand in China as well as the rest of Asia. Overall, this is a timely move in the right direction by Samsung Total Petrochemical to compete in this attractive market.
Saudi Polyolefins cancels its plans to expand existing PP unit
Saudi Polyolefins has aborted plans of expanding its existing polypropylene (PP) unit. Instead, the company plans to build a new 250,000 tpa unit at Al-Jubail. Production is estimated to commence in January 2009, four months later than the expansion that had been planned earlier. The decision to set up a new plant was guided by advantages such as more flexibility in production, despite identical capacity. Propylene feedstock will be supplied from Saudi Ethylene and Polyethylene Co’s 1 million tons per annum cracker at Al-Jubail, scheduled to come on stream by end-August 2008.
Comments: Saudi Polyolefins is a joint venture between Basell and Sahara Petrochemical. In terms of economics, there may have not been a big difference between expansion and a new line for the company. This would give the company flexibility to modify the product slate and mix suitable to market conditions and profitability optimization.
LANXESS acquires majority share in Brazilian producer Petroflex
LANXESS AG has completed the acquisition of an approximate 70% holding in Petroflex S.A., Latin America’s biggest rubber producer. LANXESS is paying approximately EUR 200 million for the package of shares. The transaction took legal and economic effect on April 1, 2008.
Petroflex S.A. will be included in LANXESS’s consolidated financial statements from the second quarter of 2008. The new CEO of Petroflex is Joerg Schneider from LANXESS. He has worked for the company in Brazil for several years, most recently holding a senior position in the Rubber Chemicals business unit. LANXESS is represented on the Board of Directors by Dr. Joachim Grub, head of the Polybutadiene business unit, and Marcelo Lacerda, LANXESS’s Country Representative in Brazil. The Board of Directors also includes a representative of the minority stockholders.
In 2007 Petroflex achieved sales equivalent to about EUR 535 million with 1,300 employees, of which around 600 were the company’s own. The Group has three production sites in Brazil: Cabo (Federal State of Pernambuco), Duque de Caxias (Federal State of Rio de Janeiro), and Triunfo (Federal State of Rio Grande do Sul). Annual production capacity is approximately 400,000 metric tons.
The range of elastomer products ranges from solution to emulsion rubber and comprises 70 products: The rubber grades are mainly used in the production of tires, with hoses and plastics being further applications. Around one-third of output is exported to more than 70 countries.
Comments: Petroflex was formed as a subsidiary of Petroquisa in 1977. The company’s core business was the production and trade of elastomers and various chemical products. Currently, the company is a major producer of synthetic rubber in Latin America and produces close to 410 thousand tons of elastomers per year. Petroflex’s main products include butadiene rubber, SB Rubber, SB Copolymer, Latex, Nitrile rubber, and other elastomers The main end-use applications include tires, hoses, camelback, auto-parts, footwear, television sets, refrigerators, bearings, bushings, carpets, asphalt, waterproofing and others.
Lanxess is a major producer of butyl rubber and halo butyl rubber that markets mainly to automotive application tires and other smaller applications. The company’s move to acquire Petroflex will complement its elastomer business and will enable it to have access to the fast-growing Brazilian market and better access to the South American region.
Sinopec mulls construction of another ethylene cracker – looking for partners
China Petroleum & Chemical Corp (Sinopec), the nation’s largest oil refiner, may seek investors to help build an ethylene plant in southern China.
The launch of the ethylene plant, which has won approval from the government, will be designed to have an ethylene-making capacity of one million metric tons annually.
China, which imports half of its ethylene needs, aims to more than double its annual production capacity to 18.13 million tons by 2010.
Comments: Sinopec is one of the leading producers of ethylene in the world. Overall, China is a net importer of ethylene and the demand for ethylene is growing at a high rate. The additional capacity will boost Sinopec’s global market share.
Russian government cancels polyethylene export duty
The Russian government has canceled the 6.5-percent export duty on polyethylene. The decision goes into effect at the beginning of May. The SIBUR holding had been lobbying for the removal of that duty. Its exports are negligible so far, but its recent purchase of Kazanorgsintez makes future exports more likely.
Russia produced 645 KT of high-pressure polyethylene in 2007 and exported 125 KT. It produced 600,600 tons of low-pressure polyethylene in the same period and exported 106,000 tons. The SIBUR holding (through its Tomskneftekhim company) is the main Russian producer of the polymer and accounts for 45 percent of exports. It is followed by Kazanorgsintez, Salavatnefteorgsintez, the Angara Petrochemical Complex, and Ufaorgsintez.
SIBUR does not produce low-pressure polyethylene. The leading producers of that substance are Stavrolen (controlled by LUKOIL) and Kazanorgsintez. The latter accounts for two-thirds of its export. SIBUR has an ambitious new program for polyethylene export in conjunction with Gazprom. It allocated 236 million rubles to study the possibility of constructing a plant to produce 450,000-500,000 tons of polyethylene per year using raw materials supplied by the natural gas monopoly’s subsidiary Astrakhangazprom. It is also increasing production capacity at Tomskneftekhim and considering building a facility to produce 600,000-650,000 tons of polyethylene per year using raw material from Orenburggazprom.
Comments: This decision by the Russian government will help domestic companies establish themselves in export markets. With more capacities coming on-stream in Russia, this is a positive development.
PMMA sheet producer Aristech Acrylics gets a new owner
Aristech Acrylics LLC, headquartered in Florence, KY, announced its acquisition by SK Capital Partners, LP, a New York private equity firm specializing in the specialty chemical industry. Principals of SK Capital have been interested in investing in Aristech for many years. When Mitsubishi Corporation, Aristech Acrylics’ prior owner, began the sales process, SK Capital was determined to purchase the company. They share confidence in Aristech’s business, its management team, its employees, and most importantly, its products and customers.
SK Capital Partners focuses on investing in businesses they know, which includes niche segments of the specialty chemical sector, such as personal care, building materials, agricultural specialties, electronic chemicals, and healthcare specialties.
Aristech Acrylics LLC, headquartered at 7350 Empire Drive in Florence, KY, is the leading manufacturer of continuously cast acrylic sheets for hot tubs, baths, showers, signage, and OEM applications. In addition, Aristech Acrylics is a leading supplier of solid surface sheets.
SK Capital Partners, LP, located at 400 Park Avenue in New York, NY, was formed in 2007 to make control investments in the middle market specialty chemicals and healthcare businesses. Its partners and employees share a wealth of investment and operating experiences in their target markets for investment.
Comments: Aristech Acrylics has been a non-core business for Mitsubishi Corporation. This transaction will benefit all the companies – Mitsubishi, Aristech, and SK Capital. Under the new ownership, Aristech will be better able to participate and compete in the marketplace. Aristech Acrylics has total revenues of about $140 million.
Mitsubishi and Sinopec to set up polycarbonate joint venture plant in China
Japan’s Mitsubishi Chemical and Mitsubishi Engineering-Plastics have formed a joint venture with Sinopec to build a bisphenol A and polycarbonate plant in China.
Construction of the 60 KT per year PC and 150 KT per year BPA plant in Beijing will begin end-2008, with startup targeted for early-2010, the statement said.
The new company, which has yet to be named but has applied for official permits, is 50%-owned by Sinopec and 50% by PCR Investments Japan Corporation, which in turn is 80%-owned by Mitsubishi Chemical and 20% by Mitsubishi Engineering-Plastics.
The JV is aimed at meeting the rising demand for BPA and PC. PC is a resin used in the manufacture of automotive parts and electrical appliances. BPA is its main feedstock.
Comments: This is in line with the previous announcement (April/2006) by Mitsubishi Chemical Corporation (“MCC”) – entering into a letter of intent with China Petroleum & Chemical Corporation (“Sinopec”), to conduct a feasibility study for establishing a PC and Bisphenol A (“BPA”) joint venture in Beijing and start production by the end of the year 2008. This follow-up decision by MCC is based on its strategy to correspond to the worldwide growth of PC demand. Currently, the global demand for PC is estimated to be about 2,600 KT per year, and this figure is expected to continue growing at an annual rate of 7 to 8 percent.
China, on the other hand, is evolving as the largest PC market in the world with an annual growth rate of more than 10 percent. In order to capture this growing demand, Sinopec and MCC have been jointly searching for the possibility of establishing a partnership in both PC and BPA. As a result of the previous joint study, Sinopec and MCC have now agreed to progress further into building a bisphenol A and polycarbonate plant in China, based on an equal Sino-foreign joint venture. The MCC Group has positioned the product chain, Phenol-BPA-PC, as one of its strategic core businesses and is working together with MEP to become the leader in the growing Asian market. With this expansion and partnership with Sinopec, MCC will further cultivate its current operating base while demonstrating its commitment to becoming the world’s most competitive PC producer by utilizing its resources and capabilities.
Rubbermaid reducing one-third of its workforce at the Maryville plant
Newell Rubbermaid Inc. announced its plans to eliminate 200 jobs at its Maryville office products plant.
The company plans to move production of such products as file folders, waste baskets, and business card holders to plants in Greenville, Texas, and Mogadore, Ohio. About 400 manufacturing and distribution workers will continue at Maryville, making chair mats and writing instrument components.
According to the company, the move will reduce costs and improve efficiency in its manufacturing network.
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