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Kraton shares details on Taiwan project

By: Isaac Li
PLASTICS NEWS CHINA

May 30, 2013

GUANGZHOU, CHINA — Kraton Performance Polymers Inc. announced at last week's Chinaplas show the latest estimated startup time for its joint venture project in Taiwan, and also explained to Plastics News the challenges of establishing production in mainland China.

In February, Houston-based Kraton signed a deal with Formosa Petrochemical Corp. to create a 50/50 joint venture that will eventually operate a 30,000-metric-ton-per-year hydrogenated styrenic block copolymer (HSBC) plant in Mailiao, Taiwan.

At Chinaplas in Guangzhou, HSBC project spokesman Michael Wong said the plant is expected to start supplying the international market by the middle of the third quarter of 2015.

Wong serves as plant general manager, Asia Pacific, as well as president of Kraton Formosa Polymers Corp.

In an interview with Plastics News on May 20, Wong noted that a major issue with establishing projection on the mainland is feedstock availability.

When the 50-50 JV project encountered objections by Taiwan's environmental authorities last year, Kraton said it would expand in Asia on a stand-alone basis and listed China as one of the considerations. Then the Taiwan project came back on track when Formosa Petrochemical worked out issues with the environmental permits for the project.

Taiwan offers more sufficient supply of feedstock than the mainland, Wong said. In China, the joint venture would be competing for feedstock with local companies like Yangtze Petrochemical Co. Ltd.

On the logistics front, it's more cost-effective to ship products from Taiwan to Guangdong and Fujian provinces than from the Yangtze River delta.

In addition to the abundant supply of butadiene, Wong said at a news conference on the opening day of the Chinaplas show, Mailiao also offers good infrastructure, local talent pool, as well as space for future expansion.

Kraton's China sales reached $76 million in 2012, accounting for 26 percent of the Asia Pacific regional sales.