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Sabic and SK Global Chemical form PE manufacturing JV, will build plants in Saudi Arabia and elsewhere

10:08 AM MDT | May 30, 2014 | —Natasha Alperowicz

A done deal: JV will serve as growth engine for both partners.

Sabic and SK Global Chemical have signed a 50-50 joint venture agreement to invest $595 million in the manufacture of high-performance polyethylene (PE) using SK’s metallocene-based Nexlene solution process technology. The agreement was signed by Sabic’s CEO, Mohamed Al Mady; and Ja-Young Koo, SK Innovation’s vice chairman and CEO.

The jv, based in Singapore, is expected to operate several Nexlene PE manufacturing plants, including SK Global Chemical’s recently completed 230,000-m.t./year plant at Ulsan, South Korea. The second plant is planned for Saudi Arabia, and, over time, production bases will be established worldwide, Sabic says. The agreement is subject to regulatory approvals. The plants will produce metallocene linear low-density PE (LLDPE), polyolefin elastomers, and polyolefin plastomers.

“The joint venture is a clear demonstration of our commitment to continually deliver efficient, technology-based solutions to our customers and further improve the way we face major growth markets,” Al Mady says.

Cha Hwa Youp, CEO of SK Global Chemicals, adds, “Nexlene will serve as a growth engine for both of our companies. The joint venture will continue to upgrade Nexlene technology and set up production bases at locations that exhibit competitiveness in the high-end polyethylene industry.”

The jv will allow both partners to enter the highly specialized, high-performance PE market, says Mosaed Al Ohali, executive v.p./polymers at Sabic. “Our new partnership with SK Global will complement our comprehensive polymers portfolio with an innovative new product line, enabling us to offer cost effective, efficient, and customer-focused solutions in Asia and beyond,” he says.

SK developed the solution-process LLDPE technology in 2010. The bimodal process uses octene comonomer and makes product that is stronger than conventional PE, with superior physical properties, transparency, processability, and organoleptic properties, the company says. Nexlene competes with PE manufactured by Dow Chemical and ExxonMobil Chemical.

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