DÜSSELDORF, GERMANY — Deep-pocketed petrochemical and polyolefins giant Saudi Basic Industries Corp. confirmed at the K show that it is in talks related to plastics acquisitions and joint ventures on multiple continents with various parties, including Italy's EniChem SpA and the Netherlands' DSM NV.
“Some of these are in an advanced stage, especially in Europe,” Mohamed H. Al-Mady, vice chairman and managing director, said Oct. 27 at the Dusseldorf trade show. But, he added, “We have no timetable for conclusion. We are flexible."
Noting that Sabic traditionally has chosen to expand via the joint venture route, Al-Mady said: “We have had discussions with leading companies in the U.S., Canada, Europe and Japan. We have had discussions with EniChem, DSM and other companies, but we have not reached any conclusions.”
Sabic also announced that, in conjunction with German partner Linde AG, it has developed new technology for producing linear alpha olefins. A newly created, wholly owned affiliate, Jubail United Petrochemical Co., will build a 330 million-pound-per-year LAO plant in Al-Jubail, on the Gulf coast of Saudi Arabia. It is due to begin operating in the second quarter of 2004, at a cost “in excess of $100 million,” according to Al-Mady.
Under development since 1993, the new process — tradenamed Alpha-Sablin — can produce lower-cost butene-1, hexane-1 and octene-1 comonomers used in the production of linear low density polyethylene, according to the company.
Sabic will consume some of these comononers in its own production, and “the balance will be exported worldwide,” Al-Mady said.
Sabic and Linde are considering licensing the technology, which uses a proprietary catalyst system. Roughly half the LAOs produced currently go into polymer production, with the balance finding use in detergents, plasticizers and lubricants.
Additionally, another Sabic wholly owned affiliate, Petrokemya, is building a 1.76 billion-pound-per-year, high density and LLDPE plant in Al-Jubail that also is to be operating in 2004.
Sabic, with 17 affiliated companies within the Saudi kingdom, now has the capacity to produce 8.82 billion pounds a year, with the additional capacity expected in 2004. The company estimates that, in Saudi Arabia alone, it sells about 1.65 billion pounds of thermoplastics per year to more than 500 downstream processors.
Meantime, the company, which is a huge producer of basic and intermediate chemicals, fertilizers and metals, said profit in the first nine months of 2001 fell 37 percent to 1.88 billion Saudi riyals ($501.1 million), on 8.4 percent higher sales of 23 billion riyals ($6.13 billion). Actual production, in tonnage terms, rose 27 percent over the same period of 2000.