SEOUL, KOREA - SK Global Chemical has joined forces with a Saudi Arabian chemical company to establish a 50:50 joint venture for the production and marketing of high-performance polyethylene. The company announced on May 27 in a regulatory filing that it would create a new company in Singapore jointly with Saudi Basic Industries Corp. (SABIC), one of the world's biggest chemical producers, at the total cost of 340 billion won. The Korean company will invest 170 billion won in the venture.

 

The representatives of the two companies held on the 26th a signing ceremony at the Sheraton Walkerhill in Seoul. Under the terms of the agreement, the joint venture will build a plant in Saudi Arabia to produce "Nexlene," the metallocene polyethylene SK has developed in late 2010. Nexlene can be used to make high value-added films, automotive and shoe interior materials, and cable insulators. The high-performance polyethylene market has seen a rapid growth recently with an annual growth rate of more than 10 percent. The market is currently dominated by Dow Chemical, Exxon Mobil, and Mitsui, which in all account for about 60 percent of the market.

 

SK Global Chemical had completed building a metallocene polyethylene plant in Ulsan in January this year with an annual capacity of 230,000 tons. With the second plant in Saudi Arabia, it expects to produce up to 1 million tons a year and achieve the economies of scale. SABIC, the Saudi Arabian state-run enterprise, is the world's largest producer of ethylene with an annual output of 10.75 million tons. It is ranked No. 3 in polyethylene with a yearly output of 5.90 million tons.