Huge savings for Tuntex at PTA plant

06 September 1997 00:00  [Source: ACN]

INDUSTRY observers believe Tuntex is saving US$180m in licence fees for its ambitious 900 000 tonne/year purified terephthalic acid (PTA) expansion in Thailand by using the Hitachi process. As it is a co-licensor through its affiliate, AEC, Tuntex may also save on licence fees for future projects.

Under its agreement with Hitachi, Tuntex will not have to pay a licence fee for using the process for its Thai PTA project, one Tuntex official says.

Although Tuntex Petrochemicals Thailand has said that the company will have to pay a licence fee, industry observers believe this fee will be nominal. Licensing fees of existing PTA technology licensors are US$100/tonne of PTA capacity. Tuntex says the Hitachi process could also be used for the Taiwanese expansion as well as for its mainland Chinese project (ACN 9 June p37).

When asked if the cost savings were worth the risk of using an untried process, a Tuntex source says no company has the capability to build such a big plant at the moment. 'The critical point is not just the process, but also the equipment. Big equipment is not easy to make and Hitachi is very experienced in this field,' be says.

An industry source says Tuntex, as well as Kohap, could also technically market its own PTA technology after its licence and secrecy agreements with Tecnimont expire after 2003. However, with future PTA projects likely to come from India and China and potential clients in both these countries unlikely to buy an unproven process, new technology licensors may not be as successful as established players in these markets, an industry observer says.

'But new licensors will be able to sell some plants for sure. There will always be the possibility to do business. Some clients here or there may prefer to buy from Hitachi, Tuntex or Kohap,' he says. On the impact of new players in the market, he says licence fees may be reduced. But the impact on major players will be small.

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