SABIC and Mitsubishi Rayon New Joint Venture
31 May 2011
Saudi Basic Industries Corporation (SABIC) and Mitsubishi Rayon Company (MRC) have announced the formation of a 50/50 joint venture company, to build and operate two plants - one for Methyl Methacrylate (MMA), and the other for Polymethylmethacrylate (PMMA) - at one of SABIC's manufacturing affiliates in Jubail, Saudi Arabia. The next phase of this project will focus on the basic engineering design, completion of supply agreements, regulatory approvals and necessary details for the JV incorporation, implementation and execution activities.
The MMA plant will be the largest ever built, with a 250,000-metric-ton annual capacity. It will use Lucite International's (LI) Alpha technology, which was first commercialised with its Alpha 1 plant which began operation in Singapore in November 2008. LI is a subsidiary of MRC acquired in 2009. The PMMA plant will be based on MRC technology and will have an annual capacity of 40,000 metric tons.
SABIC and MRC have entered into this new partnership to further their strategic goals. SABIC will broaden its specialty portfolio by drawing on the technological expertise of MRC. MRC, the global leader in the methacrylates industry, will strengthen its leadership position by utilizing readily available raw materials in Saudi Arabia and building up a new production facility in the Middle East region.
Commenting on the partnership deal, Koos Van Haasteren, SABIC Executive Vice President, Performance Chemicals, said the joint venture operation will be the basis for a strategic entry into the acrylics business. "We will be building on a breakthrough technology, with a strong partnership and integrated feedstock. Moreover, the global market for MMA is growing at a rapid pace. New applications are driving this increase in demand and we are committed to meeting our customer growth requirements worldwide".
Masanao Kambara, MRC President, commented, "this partnership with SABIC will help us to meet long term supply commitments to our MMA and PMMA customers. As the global leader we have a responsibility to ensure reliability of supply and this investment will enable us to deliver continuous improvement."
The MMA/PMMA joint venture will introduce new high-value products, manufactured for the first time in the Middle East. These will diversify materials used in industrial clusters, thus allowing expansion and further diversification in Saudi Arabia's industrial sector; creating new opportunities in the downstream industries such as construction, automotive, electronics, medical technologies and appliances. It can therefore be concluded that this project will have a positive impact on value creation in Saudi Arabia, enabling industry to move further downstream.