Sabic Innovative Plastics LP is underscoring the value it attaches to the Asian market, particularly China, by continuing to expand production facilities, research and development centers, and product offerings in the region.
The company is launching a new compounding facility with four extrusion lines this month at its plant in Shanghai, to tap the demand of China's booming automotive and electrical/electronics sectors, said Alan Leung, Pacific president for Sabic IP.
Leung spoke in an interview at the recent Chinaplas show in Shanghai, where Sabic had the largest booth among more than 1,700 exhibitors.
The new compounding plant in Shanghai is the first Sabic IP site designed for lean manufacturing, which allows for production of small-lot orders and a continuous process for manufacturing and delivery to the customer, as well as providing the flexibility to quickly change production. The design will help to reduce cycle times, the company said.
The other compounding plant Sabic IP owns in China is in Nansha. Both sites have been expanding, though the Shanghai facility is now out of space. Nansha will continue to expand capacity, said Scott Telesz, Pittsfield, Mass.-based vice president of product management for Sabic IP.
``Depending on where customers are, we will continue to explore new locations,'' Leung added.
The firm's next big move will be its much-anticipated first resin manufacturing plant in China.
``We are going to build a world-scale, best-technology polycarbonate resin factory in China,'' Telesz said. The company expects to nail down the location in 2008 and decide whether to go solo or pursue a partnership.
``Right now, we are favoring going by ourselves, but we also would consider a partnership,'' Telesz said. Sabic IP has halted its negotiations with PetroChina Co. Ltd. on a joint venture PC resin plant in Jilin, China, that first was announced in June 2006, before Saudi Basic Industries Corp. acquired GE Plastics.
The Saudi parent company's willingness to invest aggressively is driving the shift in strategy to favor a wholly owned plant vs. a joint venture facility, said Telesz. Currently, Sabic exclusively owns all its assets in China.
The planned PC plant in China will begin operating after a new PC plant in Kayan, Saudi Arabia, begins production in 2010. Telesz said he expects a large portion of the Kayan output to come to the Asia-Pacific region.
The company confirmed it will sign a final accord with Beijing-based China Petroleum & Chemical Corp., known as Sinopec, on a US$1.7 billion chemicals joint venture in Tianjin, China, by the end of this year. The 50-50 venture - Sabic's first in China - will have annual capacity of 1.3 billion pounds of polyethylene and 882 million pounds of ethylene glycol.
Telesz said the Tianjin deal has jumped in front of plans to build a plastics and chemical complex in Dalian, China, which Sabic first revealed at the 2006 Chinaplas. He said he believes that venture is ``on hold,'' but he deferred any further questions to officials in Riyadh, Saudi Arabia.
The firm, meantime, continues to explore site options for its third compounding site in China.
Sabic IP also is beefing up its technical centers in China and India. The firm plans to build its own technical center in the greater Shanghai area by 2010, and move operations out of the large General Electric Co. complex where it now is located in Shanghai. The new facility will house about 200 scientists and researchers, Leung said.
Sabic IP employs more than 400 at its research centers in China and India, he said. The parent firm employs about 2,500 across Asia, with half of those in China.
In Shanghai, the company's Asia-Pacific headquarters, Sabic IP has created a new center focused on notebook computers. Noting that more than 80 percent of the world's notebook computers are made in China, the firm said the new center will offer design, material specification, testing and processing experience.
``Asia is a major strategic focus for our company,'' Leung stressed. Saudi Basic Industries reports sales of $30 billion globally and $7 billion in Asia, with China accounting for a third of the latter number.
At Chinaplas, Sabic IP rolled out its first thermoplastic film made without the use of brominated or chlorinated flame retardants. The nonhalogenated EFR 735 film can be used for shielding and insulation barriers, printed circuits, die-cut spacers and insulators, overlays, adapters for computers and mobile phones.
It also announced that French automaker PSA Peugeot Citroen SA has extended its long-time use of Noryl GTX resin to the first car model it is manufacturing and selling exclusively in China. Dongfeng Peugeot Citroen Automobiles now uses the nylon/modified polyphenylene ether blend in the front fenders of the 307-model, four-door sedan there. Dongfeng Visteon Automotive Trim Systems Holding Co. Ltd. is injection molding the parts.