SABIC and SK Global Chemical invest 640m in joint venture

(MENAFN- Arab News) JEDDAH: Saudi Basic Industries Corp. (SABIC) said it had completed the formation of a joint venture with South Korean petrochemical manufacturer SK Global Chemical Co. to produce polyethylene products.

Total investment will be about $640 million for the technology and plant construction SABIC said in a statement.
It said that SABIC and SK Global Chemical have successfully concluded negotiations for the 50-50 joint venture that will purchase the unique Nexlene solution technology and a plant that manufactures a range of high-performance Ethylene/Alpha-Olefin copolymers products in Ulsan South Korea.
SABIC announced plans in May last year to operate the plant recently completed by SK at its complex in Ulsan South Korea with an expected annual capacity of 230000 tons.
The joint venture holding company SABIC SK Nexlene Company (SSNC) is headquartered in Singapore.
Its wholly owned subsidiary Korea Nexlene Company (KNC) owns the plant in Ulsan which has an annual capacity of 230000 tons.
The companies aim to further expand capacity with the construction and operation of additional plants globally.
The closing of the deal in Seoul was presided over by Abdulrahman Al-Fageeh Polymers executive vice president and Hwa Youp Cha SK Global Chemical CEO.
The joint venture marks the latest SABIC investment in manufacturing capability in the Far East.
The plant will produce metallocene based linear low-density polyethylene polyolefin plastomers and polyolefin elastomers to meet the growing needs of diverse industries such as flexible packaging industrial and agricultural film automotive consumer products (footwear) medical and construction.
Yousef Al-Benyan SABIC's acting vice chairman and CEO said: 'We are very pleased to launch this partnership with SK Global Chemical which is the latest stage in SABIC's global expansion.'
Al-Benyan said: 'By growing our presence in Republic of Korea we are opening up new markets globally and reinforcing our position as a global leader a major goal of our 2025 strategy.'
Al-Fageeh said the new venture would enable both partners to grow in the highly specialized polyethylene market by providing high-value polymer products to global customers.
'The solidification of our partnership with SK Global Chemical will complement our polymers portfolio and enable us to offer a more varied cost-effective and customer-focused selection of products' he said.
Nexlene will offer customers better performance manufacturability and final product properties including excellent impact strength enhanced toughness superior transparency low heat-seal temperature incremental output and improved organoleptic properties. These unique properties and characteristics offer a range of possibilities for the development of innovative product applications.
The packaging industry will benefit from lighter versions of Nexlene (mLLDPE) for producing films to manufacture flexible food packaging and wrapping materials.
They can also be used in pipes and consumer goods such as roto-molded articles.
Metallocene Polyolefin elastomers have applications in a number of industries where elasticity is important including impact modifiers in the automotive industry footwear in consumer markets and wire coatings in the utilities and construction industries.
Metallocene Polyolefin plastomers are designed to provide excellent heat-seal strength for a variety of packaging products that can help provide inner sealing adhesion and a barrier against air and moisture.
With Nexlene SABIC now has access to the most complete Polyethylene technology platforms within the petrochemical industry.
SK Global Chemical is a pioneering petrochemical company in Korea being the first in the country to build a naphtha cracking facility in 1972.
Through continuous facility investment R&D and technological improvement the company has maintained its position as the leader of the petrochemical industry in Korea.