Sabic/SK Chemical enter into a jv; to start up mLLDPE in Ulsan

Riyadh-headquartered chemicals firm Sabic and South Korean petrochemical company, SK Global Chemical, are to set up a 50-50 joint venture that will purchase the Nexlene solution technology and a plant that manufactures a range of high-performance Ethylene/Alpha-Olefin copolymers products in Ulsan, South Korea. The aggregate purchase price for the technology and plant is approximately US$640 million.

The closing of the deal was presided over by Abdulrahman Al-Fageeh, Polymers Executive Vice President, and Hwa Youp Cha, SK Global Chemical CEO.

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 230,000 tonnes. The parties intend to further expand capacity with the construction and operation of additional plants globally.

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/CEO, said, “We are very pleased to launch this partnership with SK Global Chemical, which is the latest stage in Sabic’s global expansion. 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 specialised PE 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 impact strength, enhanced toughness, 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-moulded 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.

The joint venture marks the latest Sabic investment in manufacturing capability in the Far East. With Nexlene, Sabic now has access to the most complete PE technology platforms within the petrochemical industry.

SK Global Chemical is a pioneering petrochemical company in South 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.

Saudi Basic Industries Corporation (Sabic) ranks as the world’s second largest diversified chemical company. The company is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilisers. It recorded a net profit of US$6.2 billion) in 2014. Sales revenues for 2014 totalled US$50.2 billion. Total assets stood at US$90.7 billion at the end of 2014.

Sabic was founded in 1976 when the Saudi Arabian Government decided to use the hydrocarbon gases associated with its oil production as the principal feedstock for production of chemicals, polymers and fertilizers. The Saudi Arabian Government owns 70% of Sabic shares with the remaining 30% held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.