South Korean petrochemical firm LG International Corp. may open a 330 million-pound polypropylene plant in Vietnam with state-owned oil company Vietnam Oil and Gas Corp. (Petrovietnam).
While local news reports said LG and Petrovietnam plan to build the $200 million facility by 2009 in the Dung Quat economic zone, near Quang Ngai, an LG official was less definitive.
The company still is negotiating with Petrovietnam and will make a final decision in about six months, said D.W. Huang, general manager of new business development for Seoul-based LG. But he said the firm considers that market very promising.
``They have much demand in Vietnam in the domestic market; 330 million pounds is not enough to meet the demand,'' he said.
The site would be LG's second plastics manufacturing facility in Vietnam, after the company opened a dioctyl phthalate plant there in 1998. The project would get propylene from an oil refinery that Vietnam plans to open at Dung Quat in 2009.
The PP facility would boost the relatively small resin production in Vietnam significantly. The country now has capacity of about 815 million pounds, mostly in PVC and PET, according to the Vietnam Saigon Plastic Association.
Vietnam, however, is planning for a fivefold increase in local production, to 4.2 billion pounds, by 2009, according to a VSPA paper presented at the ICIS Asian Polymers Conference, held April 24-25 in Shanghai.
About 1.5 billion pounds would come from polyethylene and 1 billion pounds from PP, with smaller amounts of PET, polystyrene and vinyl chloride monomer, with investments totaling $1.5 billion, VSPA said.
Several Vietnamese trade groups warned in March that rising resin prices and supply shortages were hampering the domestic industry, and urged the government to accelerate investment in plastics resin plants, according to local news reports.