18 February 2003 16:25 [Source: ICIS news]
BUDAPEST (CNI)--Building any additional polyethylene (PE) capacity in western Europe makes no economic sense, according to Sabic EuroPetrochemicals which last year swallowed up DSM’s petrochemical assets.
Speaking at the CEE Chemical and Petrochemicals Industry 2003 conference* here, the company’s manager of business intelligence and strategic planning Mark Vester said: “There is no rationale for investments in new PE capacity in Europe. There is potential for scrap and build but not extra capacity,” he said.
He said the cost advantage of cheap ethane feedstocks in the Middle East more than outweighed the extra transport costs in bringing the product to Europe. Vester would not confirm to CNI that this meant no extra PE capacity would ever be added to the ex-DSM assets, merely saying “based on overall economics, the case for increases in PE capacity is not a good one.”
Vester said that based on planned PE projects and projected demand increases in western Europe, consumption growth would outstrip capacity growth between 2003 and 2007, leaving room for an extra 100 000 tonne/year of PE to be provided by the Middle East.
“Middle East imports will make up for west European production deficits,” he added.
Vester said in future there will only be five to six major PE production sites in Europe.
*Organised by Marcus Evans, the conference continues on Wednesday.
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