Polypropylene Production in Southeast Asia on the Increase with New Plants and Expansions

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Researched by Industrial Info Resources (Sugar Land, Texas)--Polypropylene production in the Southeast Asia region is ramping up as new plants and expansions are brought online.

In Vietnam, the polypropylene plant commissioned by state-owned Vietnam Oil and Gas Group (PetroVietnam) (Hanoi, Vietnam) and constructed by a consortium led by the Korean-based Hyundai Engineering and Construction Company (SEO:000720) (HEC) (Seoul, South Korea) is ready to be handed over to PetroVietnam by the end of May this year. The engineering, procurement and construction (EPC) contract for the polypropylene plant was signed in November 2007 with the HEC-led consortium, which also includes the LG International Corporation (SEO:001120) (LG) (Seoul).

The polypropylene plant has been constructed as a part of Vietnam's first refinery project, the $3.1 billion refinery at Dung Quat, in central Quang Ngai province, and has an estimated cost of $166 million. The plant will take feedstock from the refinery to produce about 150,000 tons per year of polypropylene. According to HEC, the plant is 99.45% complete, and trial polypropylene production is expected to begin next month before the handover takes place in May, which will be a month ahead of schedule.

In another polypropylene project in the region, the expansion of the HMC Polymers (Bangkok, Thailand) polypropylene plant at Map Ta Phut is due to be commissioned during the second quarter of this year.

HMC Polymers is an affiliate of the PTT Public Company Limited (BAK:PTT) (PTT) (Bangkok, Thailand) and the privately owned LyondellBasell Industries (LyondellBasell) (Rotterdam, Netherlands), and the expansion of its polypropylene plant was one of the few unaffected by the suspension of PTT's sixth gas-separation plant at Map Ta Phut by the Central Administrative Court last year.

The Central Administrative Court suspended 76 projects worth more than $10 billion in Map Ta Phut in September 2009, following complaints over pollution and allegations that the projects were in conflict with the constitution of Thailand. In December 2009, 11 of the 76 projects were permitted to go ahead.

The HMC Polymers plant expansion will add a further 300,000 tons per year in production capacity to the existing plant and will bring the total production up to 450,000 tons per year. Construction began at the end of 2007, following the signing of the EPC contract with GS Engineering and Construction Corporation (SEO:006360) (Seoul) in July 2007. The plant will use the LyondellBasell Spherizone technology.

Polypropylene was first produced commercially in the 1950s, and its properties of good tensile strength, high rigidity, and inertness to many acidic, alkaline and solvent products have given the material a major role in many consumer products. It is a low-density product and has a cost advantage over other thermodynamic products, causing it to be in high demand for weight-conscious products.

China is the largest consumer and importer of polypropylene in the world and has recorded a 15% increase in demand each year in the last decade. This increase has resulted in the Asia Pacific region planning for an extra 10 million tons of production capacity by 2015. This represents more than half of the global planned production increases. The two countries, China and India, between them have a planned increase in production of 7 million tons by 2015.

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