Dow Chemical and Siam Cement Plan Petrochemical Expansions in Thailand

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Researched by Industrial Info Resources (Sugar Land, Texas)--The SCG-Dow Group (Bangkok, Thailand), a joint venture between the Siam Cement Group (SCM) (Bangkok), the country's leading industrial conglomerate, and the Dow Chemical Company (NYSE:DOW) (Midland, Michigan), recently broke ground on a propylene-oxide unit at the Asia Industrial Estates in Map Ta Phut, Thailand. The plant will produce 390,000 tons per year of propylene oxide using technology to convert hydrogen peroxide to propylene oxide, jointly developed by Dow and BASF SE (OTC:BASFY) (Ludwigshafen, Germany), one of the world's largest chemical manufacturers. The joint venture also plans to set up a propylene-glycol-manufacturing unit as part of the propylene oxide plant, which is slated to be commissioned by 2011. BASF will support this initiative as a technology partner. Feedstock for the plant will be procured from the upcoming liquids-cracker unit in Map Ta Phut, another initiative by the SCG-Dow joint venture expected to be commissioned by 2010.

Dow and BASF developed the technology to convert hydrogen peroxide to propylene oxide through joint research that began in 2003 with support from Solvay S.A. (OTC:SVYSY) (Brussels, Belgium) as a partner to develop specially modified hydrogen peroxide required for the process. This technology is expected to result in a 25% reduction in capital costs, a 70% to 80% decrease in wastewater and a nearly 35% increase in energy efficiency. The process requires a simple integration of hydrogen peroxide and propylene and does not generate byproducts, eliminating the need for additional investments and infrastructure to store and market byproducts. The two companies are in the process of finalizing several regional product exchanges and supply agreements to cater to the global propylene oxide market.

In July 2007, Dow formed a partnership with Solvay to build a new hydrogen peroxide plant to function as a source of raw material for the upcoming propylene oxide plant. The hydrogen peroxide plant, which will be one of the world's largest with a production capacity of 330,000 tons per year at 100% concentration, will also be located at the Asia Industrial Estates in Map Ta Phut. The plant will use Solvay's proprietary high-yield technology to produce hydrogen peroxide for the propylene oxide plant and Peroxythai Limited (Bangkok, Thailand), Solvay's regional subsidiary. The hydrogen peroxide plant is expected to become operational before the propylene oxide plant is commissioned.

In a move to establish Thailand as one of Southeast Asia's largest production bases, Dow has chalked out ambitious plans to set up five projects in the Map Ta Phut region with investments of up to $2 billion. The company has signed an agreement with SCG to set up a $1.27 billion olefins plant in the region. The SCG-Dow joint venture, which was formed in 1987, will also undertake the execution and operation of several facilities at Map Ta Phut's Asia Industrial Estates. This includes a proposed specialty plastomers and elastomers plant, which will manufacture ENGAGE™ polyolefin elastomers and AFFINITY™ polyolefin plastomers, among other products. The unit is scheduled to become operational in 2011 and will cater to the Asia-Pacific market.

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