Sipchem starts construction on two new plants

Sipchem_construction

Saudi International Petrochemical Company (Sipchem) has started construction work on two new plants being built under its Phase III expansion program.

The two Sipchem plants will be the first of their kind in the region, according to officials. Abdulrahman Al-Saif, president, projects and services, pointed out that these plants are being built within the framework of Sipchem's strategic expansion plan.

The first plant produces ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) and the second facility will make ethyl acetate and butyl acetate.

Operations

The production capacity of the vinyl acetate plant will be 200,000 tons per annum. It will be operated by the International Polymers Company Limited, an affiliate of Sipchem, founded in 2009.

Sipchem and Hanwha Chemical of South Korea have 75 per cent and 25 per cent stakes in the venture respectively. The total cost of the project is estimated at around US$800 million. Both Sipchem and Hanwha will be in charge of global marketing operations for these products.

The project's main contractor, Korean company GS Engineering & Construction Co., started construction work in September. The plant is scheduled to start operations during the second quarter of 2013.

The second facility's main contractor is E Tech Engineering and Construction Co., who has already started work at the site. This plant is expected to start production in the first quarter of 2013.

EVA and LDPE

EVA is used as a feedstock in the production of heat soluble adhesives, resin products and high-quality sports bandages. LDPE is used as a feedstock in the production of various types of containers, bottles and medical detergents. The ethyl acetate and butyl acetate plant will have a production capacity of 100,000 tons per annum.

Total cost

The total cost of the project is estimated at around US$93.3mn. The ethyl acetate plant will cater to domestic and global markets. Its products will be used as a solvent in the manufacture of inks and industrial fluids and granules. The project will be wholly owned by Sipchem.

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