MOSCOW (MRC) -- Petronas Chemicals Group Bhd (PCG) has entered into a strategic partnership with LG Chem Ltd to build a nitrile butadiene latex manufacturing plant at Pengerang Integrated Complex (PIC) in Johor, according to New StraitsTimes.
The integrated chemicals producer said the partnership was timely amid a period where the demand for nitrile gloves was growing rapidly.
"In addition, the collaboration will create new revenue streams and unlock new markets by optimising resources in both companies.
"At the same time, PCG and LG Chem will work together to offer various grades and new applications of NBL as well as develop high-value added products through continuous research and development (R&D) and investments," PCG said.
Construction of the plant will begin in 2021 while production is scheduled to start in 2023.
"When completed, the plant will have an annual NBL production capacity of 200,000 tonnes," it said.
PCG managing director and chief executive officer Datuk Sazali Hamzah said the partnership marked a strategic step in developing its specialty chemicals portfolio, underpinning its position as a leading integrated chemicals producer in Malaysia.
Sazali said the partnership also provided a compelling entry point into the growing NBL-based products and enabled PCG to enhance its presence in attractive end-markets, especially for personal care and healthcare, mainly in Asia Pacific.
"This collaboration further strengthens the pursuit of our growth agenda, having acquired a silicone player last year.
"With more specialty chemicals in our portfolio, we are moving into segments with higher growth potential," he said.
NBL is a synthetic rubber that uses butadiene as the main feedstock and is a core raw material for making nitrile gloves, which is widely used in industries such as healthcare, medical, and food, among others.
Recently, the use of nitrile gloves had seen rapid growth in helping to prevent the spread of Covid-19 and other infections.
The rising demand of nitrile gloves is at an annual average of more than 10 per cent and is expected to account for 70 per cent of the entire latex gloves market in 2024.
As MRC wrote before, in early May, 2020, Petronas Chemicals (Kuala Lumpur), Malaysia’s leading petrochemicals player, reported a drop in first-quarter sales and earnings citing the coronavirus disease 2019 (COVID-19) pandemic. The sharp decline in petrochemical product prices following the outbreak of COVID-19, the deepening industry downcycle as crude oil prices collapsed due to the OPEC+ fallout, and the recessionary global economic outlook have hurt results, the company says.
We remind that LG Chem, a South Korean petrochemical major, reduced its operational rates of its cracker to around 90-95% starting January 2020 due to weaker economic fundamentals. Based in Daesan, South Korea, the cracker is able to produce 1.27 million tons/year of ethylene and 650,000 tons/year of propylene. The company increased capacity utilisation at this cracker to 100% on 10 March, 2020, in order to supply ethylene to Lotte Chemical.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
Petronas, short for Petroliam Nasional Berhad, is a Malaysian oil and gas company wholly owned by the Government of Malaysia. The Group is engaged in a wide spectrum of petroleum activities, including upstream exploration and production of oil and gas to downstream oil refining; marketing and distribution of petroleum products; trading; gas processing and liquefaction; gas transmission pipeline network operations; marketing of liquefied natural gas; petrochemical manufacturing and marketing; shipping; automotive engineering; and property investment.
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