SABIC and Celanese to Construct Polyacetal Plant at Jubail Industrial City

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Researched by Industrial Info Resources (Sugar Land, Texas)--Saudi Basic Industries Corporation (SAU:2010) (SABIC) (Riyadh, Saudi Arabia) has signed an agreement with Celanese Corporation (NYSE:CE) (Dallas, Texas) to construct a production facility for polyacetal--also known as polyoxymethylene or POM--in Jubail Industrial City in Saudi Arabia.

The facility, which will produce 50,000 tons of POM each year, will be constructed at the complex operated by SABIC affiliate IBN SINA National Methanol Company (IBN SINA) (Al Jubail, Saudi Arabia). IBN SINA is a joint venture company established in 1981 and owned 50% by SABIC, while the remaining 50% is split equally by Celanese and Duke Energy Corporation (NYSE:DUK) (Charlotte, North Carolina).

Engineering and construction work for the new facility is expected to begin before next year, and commercial operations are expected to commence in 2013. The facility will use methanol produced by the existing IBN SINA facilities as the feedstock to produce POM. The IBN SINA complex also produces methyl tertiary butyl ether (MTBE), which is used as a gasoline additive to increase octane ratings, as well as a solvent and a chemical reagent.

POM is one of a range of chemicals known as performance chemicals, which have been modified to give them particular properties depending on specific needs. Performance chemicals are normally those that demand superior technical competence in manufacturing, coupled with strong service skills on the part of the manufacturer.

As a result of its properties of high stiffness, low friction and excellent ability to retain dimensional stability, POM is widely used in the automotive industry and other applications such as manufacturing diving equipment, guitar picks and knife handles.

POM is normally produced in the form of granules, or extruded in standard-section round or rectangular bars. The granular form is suitable for forming intricate shapes by hot pressing or injection molding, while the extruded bars can be shaped by machining processes such as milling, turning or grinding.

The construction of the new facility forms a part of the IBN SINA joint venture that will now be extended until 2032. When the new facility operates successfully, Celanese will increase its stake in IBN SINA to 32.5%, while SABIC will retain its 50% share.

The IBN SINA venture has proved economically valuable to Celanese, as it has received about $238 million in dividends over the past three years. In total, the new facility is expected to have a total investment capital of about $400 million.

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