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Sipchem and Hanwha Sign JVA for Polymers Projects

Source: www.gulfoilandgas.com 7/12/2009, Location: Middle East

Sipchem and Hanwha Chemical Corporation of South Korea announced that they have signed a Joint Venture Agreement to establish a new petrochemical company in Al-Jubail Industrial City, Saudi Arabia that will be owned 75% by Sipchem and 25% by Hanwha Chemical.

The new polymers venture comprises of 200,000 metric tons per year Ethylene Vinyl Acetate (EVA) and 125,000 metric tons per year of Polyvinyl products. The plants will be built on Sipchem site in Al-Jubail with an estimated cost of SR 4 billion ($1.1 billion) and are expected to start by the end of 2013. The new products are main ingredients for hot melt adhesives, hot glue sticks, shock absorbers in sports shoes, adhesives for porous materials, particularly for wood, paper, and clothe. The feedstock for the projects are sourced from Saudi Aramco, Sabic and from other Sipchem affiliates.

Sipchem has announced earlier the signing of a technology licensing agreement with ExxonMobil Chemical Technology Licensing LLC, USA for the EVA project.

On this occasion, H.E. Abdulaziz A. Al-Zamil, Sipchem’s Chairman, stated that the plan to establish the Polymers Project is a step in the right direction of Sipchem’s endeavor to build a petrochemical project on an international scale, representing its phase-III development. He also added that since its inception in 1999, Sipchem has always been in pursuit of optimum utilization of natural and human national resources, providing better returns to the investors and creating more job opportunities to Saudi youth by bringing new technologies and foreign investments.

Sipchem currently has two affiliates producing Methanol and Butanediol and three affiliates that would start production of Carbon Monoxide, Acetic Acid and Vinyl Acetate Monomer in the next 2 months.

By the end of 2013, Sipchem’s total investment will reach approx. 13 billion Saudi Riyals and total production will reach 2.5 million metric tons of various products, many of which are produced for the first time in the Middle East.

Hanwha Chemical, an affiliate of the Hanwha Group, is the 10th largest commercial and petrochemical conglomerate in Korea, has been actively expanding its presence in the global market. On this occasion Mr. Ki Joon Hong, President and CEO of Hanwha Chemical Corp, said “I strongly believe the EVA/LDPE plant to be established in Saudi Arabia will be the stepping stone for Hanwha to become one of the global chemical leaders.”

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