SABIC and Mitsubishi Rayon to Jointly Develop Methyl Methacrylate Manufacturing Facility in Saudi Arabia

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading Japanese chemicals major Mitsubishi Rayon Company (TYO:3404) (Tokyo, Japan) and Saudi Basic Industries Corporation (SABIC) (Riyadh, Saudi Arabia), will form a joint venture to set up a facility in Saudi Arabia to produce methyl methacrylate (MMA) and other allied products. The two companies signed a letter of intent to this effect on August 10. The letter of intent includes details of the partnership in the venture and the required investment of about $1 billion. The letter also includes the broad framework of the structure of the joint venture, the technology to be used, supply of raw materials and marketing strategy. The facility is expected to begin operations by 2013.

Under the agreement, the joint venture will use the new ethylene process, also known as Alpha process, to manufacture 3,000 tons per year of polymethyl methacrylate (PMA) and 250,000 tons per year of MMA. Methanol and ethylene, used as raw material in this process, will be supplied by SABIC. The joint venture is also exploring the possibility of manufacturing other allied products.

PMA, also known under the brand name Plexiglas, finds use in the transportation and construction sectors and also in the manufacture of light emitting diodes (LEDs) for flat screen televisions and light-guided panels used in liquid crystal displays (LCD). MMA is used in home appliance products, automobiles and optical screens.

Globally, MMA is manufactured using any one of the following three processes:

• Acetone cyanohydrin (ACH) process
• C4 direct oxidation process
• The new ethylene or Alpha process

The ACH process is the most widely used method of producing MMA, accounting for about 80% of global production. Under the conventional ACH process, hydrogen cyanide is treated with acetone to produce acetone cyanohydrin. This is then treated with concentrated sulfuric acid to form methacrylamide sulfate, which undergoes esterification and is then hydrolyzed to form MMA and methaacrylic acid. The new ACH process, which has been developed recently, converts acetone cyanohydrin formed by the reaction of hydrogen cyanide and acetone to α-hydroxy-isobutyramide. This then undergoes esterification with methyl formate to produce methyl α-hydroxy-isobutyrate and formamide. The methyl α-hydroxy isobutyrate undergoes dehydration to produce MMA. This process is presently under pilot study.

In the C4 direct oxidation process, isobutylene is oxidized to methacrolein, which then undergoes further oxidation and esterification to produce MMA.

The new ethylene process, developed by Lucite International (Southampton, United Kingdom), uses inexpensive raw material such as methanol, ethylene and carbon dioxide to produce MMA. Recently, Lucite started the production of the world's first facility using this process in Singapore. The production unit has a production capacity of 120,000 tons per year. The new ethylene process is expected to provide 40% savings in construction and production costs, in comparison to other methods.

SABIC, a Saudi Arabian state-owned enterprise has business interests in plastics, thermoplastics, resins, specialty chemicals, polymers, petrochemicals and solvents. In 2007, SABIC puchased the plastics division of General Electric Company (NYSE:GE) (Fairfield, Connecticut) for $11.6 billion.

Mitsubishi Rayon started the production of MMA in the early 1940s.This division is one the primary revenue generators for the company today. The firm currently operates eight research and development centers and 30 manufacturing units globally, employing 9,500 people. In May 2009, the company acquired Lucite for $1.6 billion. This acquisition is likely to make Mitsubishi Rayon the largest MMA producer in the world. After the integration of the operations of Lucite, Mitsubishi Rayon's total installed capacity for MMA production will reach 1.36 million tons per year, equivalent to 37% of the market share in terms of installed capacity. Prior to the SABIC-Mitsubishi Rayon joint venture taking effect, SABIC is also expected to buy a 10-20% stake in Lucite.

Lucite, which developed the new ethylene process to manufacture MMA, was formed by the merger of E.I. du Pont de Nemours & Company (NYSE:DD) (DuPont) (Wilmington, Delaware) and Imperial Chemical Industries (ICI) (London, United Kingdom). In 1937, ICI was the first company to manufacture MMA using ACH technology. Lucite, which recorded revenues in excess of $1.5 billion, employs 2,000 people across 14 production facilities. The new ethylene process developed by the firm has won several awards, including the "2009 Innovation Award" from Chemical Industries Association (London).

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