State-owned Saudi Arabia Basic Industries Corporation (Sabic) (
www.sabic.com/corporate/en) has teamed up with SK Global Chemical (
www.sk.com/Corporation) of South Korea to produce polyethylene products.
It has signed a joint-venture agreement to purchase a plant that manufactures co-polymers in the South Korean city of Ulsa.
The deal concludes negotiations between the parties after an initial agreement last year set up a joint venture in Singapore called Sabic SK Nexlene Co.
Yousef al-Benyan, Sabic’s acting chief executive, said: “By growing our presence in Korea, we are opening up new markets world-wide.”
Korea Nexlene Co, a subsidiary of the Saudi-Korean joint venture, now owns the Ulsa plant, which has an annual capacity of 230,000 tonnes.
Sabic said the plant will offer customers stronger plastics for use in food wrapping and many other applications.
Sabic is the world’s second-largest diversified chemicals company. The group was formed in 1976 when the Saudi government, which owns 70% of its shares, decided to use gases associated with oil production as a ‘feedstock’ to produce chemicals and fertilisers.
It said that it “is looking to develop closer ties to Asian markets, where the bulk of its crude oil is shipped”.
Sabic also has a joint venture with China’s Sinopec. In 2013, the company opened two research centres (in China and India) with a combined initial investment of $200 million. Sabic reported net profits of $6.2 billion in 2014, with revenues of $50.2 billion.