Saudi Basic Industries Corporation's joint venture in South Korea plans to expand the capacity of its plant in the city of Ulsan to boost the production of advanced chemical products.
Sabic SK Nexlene Company, a venture between Sabic, the Middle East's biggest petrochemicals company, and South Korea’s SK Geo Centric, will produce materials used in solar panels, vehicles, footwear, and flexible packaging as part of the expansion.
The expanded section of the plant is due to become operational in the second quarter of 2024, Sabic said on Friday.
“We have identified a strong trend toward customised and high-performance polyolefins, especially metallocene polyethylene materials, in several important new technology markets,” said Sami Al-Osaimi, Sabic's vice president of PE and sales, and chairman of Sabic SK Nexlene Company.
“The plant capacity increase will provide the operational efficiency to boost the growth of these Nexlene-based materials and give us a significant competitive edge,” he said.
Riyadh-based Sabic is majority-owned by the world’s largest oil-exporting company, Saudi Aramco, which acquired a 70 per cent stake in the company in June 2020 for $69 billion.
Sabic reported a profit of 7.93bn riyals ($2.1bn) in the second quarter, up 3.8 per cent, after revenue rose by 32 per cent to 56bn riyals on higher average selling prices and volumes.
The latest expansion “supports Sabic’s 2025 growth target to increase operational efficiency, create synergies and strengthen product offerings in its petrochemicals business", the company said.
Sabic SK Nexlene Company, which was set up in 2015, invested 605.1bn Korean won ($454 million) in its subsidiary, Korea Nexlene, to establish the 6.81-hectare plant in Ulsan, SK Geo Centric said separately.
The plant has been producing 210,000 tonnes of Nexlene products annually.
After the expansion, the plant's capacity is set to increase by 43 per cent to more than 300,000 tonnes. More than 90 per cent of the output is expected to be exported.