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Sabic and Korea's SK set up $600 million metallocene JV

By: Steve Toloken

May 26, 2014

Saudi Arabia’s Saudi Basic Industries Corp. (Sabic) and South Korean firm SK Chemicals Co. Ltd. said May 27 they are forming a $595 million joint venture to make metallocene linear low density polyethylene.

SK is contributing a manufacturing plant in Korea and the partners are planning a second facility in Saudi Arabia.

The 50-50 venture, which will use SK’s Nexlene metallocene technology, is “expected to operate a series of manufacturing plants” worldwide to make advanced LLDPE including metallocenes, polyolefin plastomers and polyolefin elastomers, the companies said.

Seongnam-based SK is bringing a recently completed 230,000-metric-ton-per-year capacity manufacturing plant at its complex in Ulsan, South Korea, into the JV, and the companies said they have plans to follow that with a facility in Saudi Arabia, although they did not provide specifics.

“Over time, production bases will be established worldwide,” the companies said.

The joint venture, which needs regulatory approval, will be based in Singapore. The companies said they signed the agreement May 26 in Seoul.

"Nexlene will serve as a growth engine for both of our companies,” said Cha Hwa Youp, CEO of SK Global Chemicals. “The joint venture will continue to upgrade Nexlene technology and set up production bases at locations that exhibit competiveness in the high-end polyethylene industry."

Riyadh-based Sabic said the joint venture will allow it to expand its product line and help it improve its presence in Asia, where it said it has a partnership with Chinese state-owned petrochemical firm Sinopec.

"We are happy to establish this partnership with SK Global Chemical and bring the best in advanced material science closer to our expanding customer base in Asia,” said Sabic Vice Chairman and CEO Mohamed Al-Mady.

Traditionally the metallocenes market has been dominated by U.S. and Japanese firms, but South Korean and Chinese companies have been stepping up their research efforts.

The companies said they will be looking at markets such as packaging, footwear, pipe and wire coatings, and consumer goods made from rotational molding.