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Sabic signs JV with Korea’s SK Global Chemical to manufacture high-performance polyethylene products

News International-French

9 Jun 2014

Sabic and the Korean petrochemical company, SK Global Chemical, signed a 50-50 joint venture agreement in Seoul, South Korea, for a total investment of US$ 595 million to manufacture a range of high-performance polyethylene products using SK’s cutting edge Nexlene solution technology.

The agreement was signed by Mohamed Al-Mady, SABIC Vice Chairman and CEO, and Ja-Young Koo, SK Innovation Vice Chairman and CEO, and is subject to regulatory approval.

The joint venture, which is located in Singapore, is expected to operate a series of manufacturing plants, the first of which was recently completed by SK Global Chemical at its complex in Ulsan, South Korea, with an expected annual capacity of 230,000 tons. The plants will produce metallocene linear low density polyethylene, polyolefin plastomers and polyolefin elastomers that will meet the growing needs of diverse industries such as advanced packaging, automotive, healthcare, footwear and electrical & lighting.

A second plant is planned for Saudi Arabia. Over time, production bases will be established worldwide.

After the signing ceremony, Al-Mady commented, “We are happy to establish this partnership with SK Global Chemical and bring the best in advanced material science closer to our expanding customer base in Asia. 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.”

Cha Hwa Youp, SK Global Chemicals CEO, said, “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 competiveness in the high-end polyethylene industry.”

Mosaed Al-Ohali, SABIC Executive Vice President, Polymers Strategic Business Unit, said that the new venture will allow both partners to enter the highly specialized high-performance polyethylene market, providing premium and high value polymer products to customers around the world. “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 said.

Giving a technological perspective, Ernesto Occhiello, SABIC Executive Vice President, Technology and Innovation, said that this solution, based on metallocene technology, will enable the two companies to manufacture a wide range of materials.

“These technologies will benefit both converters and end customers through better performance, processibility and final product properties. Excellent impact strength, enhanced toughness, superior transparency, low heat seal temperature, incremental output and improved organoleptic properties are just a few of the competitive advantages that this technology can deliver,” he said.

These unique properties and characteristics offer a range of possibilities for the development of innovative product applications. The packaging industry can benefit from lighter versions of Nexlene (mLLDPE) to produce films to manufacture flexible food packaging and wrapping materials. They can also be used in pipes for greater variations as well as in consumer goods, such as roto-moulded articles.

Polyolefin elastomers find 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 utilities and construction industries.

Polyolefin plastomers are specifically designed to provide excellent heat seal strength for a variety of packaging products to help provide inner sealing, adhesive and air/moisture barrier layers. 

The joint venture marks the second instance in which SABIC is investing in manufacturing capability in the Far East after its successful partnership with the China Petrochemical Corporation (Sinopec). 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.