International Grassroot Chemical Plant Construction Increases by Over $1 Billion in the First Quarter of 2004 Compared to Last Year

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). International grassroot chemical plant construction reported in the first quarter of 2004 totaled nearly $3.8 billion from just twenty projects, compared to the same period last year totaling $2.6 billion, equaling an increase of over $1.2 billion. This increase in grassroot spending comes as no surprise; performance and production by the international chemical processing industry (CPI) has remained strong for the last several years as Asian and Middle East countries continue to invest heavily in infrastructure industries including chemicals.

This increase is most noticeable in China where eight projects were reported with a Total Investment Value (TIV) of $1.4 billion. In addition to the reported international grassroot spending in the first quarter, Industrialinfo.com also reported over $9 billion in major expansions and unit additions representing nearly 80 individual projects.

Click the image to the right and view a breakdown of the grassroot spending by country and SIC code plus view the largest three grassroot projects reported this year.

USI Far East Corporation (Taipei, Taiwan), in a joint venture with Formosa Plastics Group (T'aipei, Taiwan) is planning to construct a $900 million grassroot ethylene plant in Taiwan (PEC 98200128) with construction tentatively beginning late this year. Olefins led spending in the first quarter with over half the total at $2.5 billion and all of it planned in Asian countries. Olefins including ethylene, ethylene oxide/ethylene glycol (EO/EG), polyethylene, polypropylene, polystyrene and paraxylene are all building block chemicals and play a very important role in supplying a developing region with feedstock for attracting other downstream industry.

Oman Oil Company plans to begin construction this summer for a $450 million grassroot methanol plant in Suhar, Oman (PEC 94600038) that will produce an estimated 3,000 tons per day of methanol when completed in late 2006. Methanol is also a building block chemical and the trend for new capacity to serve the growing needs of formaldehyde and acetic acid continues to grow.

All but four of the twenty projects are tentatively planned to begin construction this year with field construction activities beginning this summer for over half of the projects. These grassroot plants represent the largest opportunities for global E&C firms and equipment vendors as the average project TIV nears $200 million.