Mitsui & Co urged to save struggling Vinyl Chloride Malaysia
19 November 2003 00:30 [Source: ICIS news]
SINGAPORE (CNI)--Mitsui and Co has received a request from Malaysia's state-owned Petronas to inject more money into their struggling joint venture, Vinyl Chloride Malaysia, according to a Mitsui and Co source. The Japanese trading major is considering the request. It is also discussing other options with Petronas, such as bringing in more non-Malaysian staff trained in the vinyl chloride monomer (VCM) technology licensed from Mitsui Chemicals, the source said.He declined to confirm market talk that Petronas has asked Mitsui for $25m (Euro20.9m) to keep the company afloat. Mitsui and Co, which invested $250m for a 40% stake in the company, is also considering withdrawing from the joint-venture project.
The official conceded that it would not be easy to either withdraw from the project or solve the plant's problems.
Vinyl Chloride Malaysia operates a 400 000 tonne/year VCM plant and a 150 000 tonne/year polyvinyl chloride (PVC) facility at Kerteh.
The VCM plant has been dogged by problems since it came onstream in September 2000. It has operated intermittently since startup, and has been shut down since June of this year.
Even when the plant has been running, its operating rates have only been 50-60%, the official added. He identified the main problems as technology, operational and raw material problems.
A Mitsui Chemicals official denied that there have been any problems with the VCM technology supplied to the plant. "Most of the plant's troubles have been caused by outside facilities, such as utilities," he said.
"There have also been mechanical problems which occurred in the initial stages of the plant's operations."
A Petronas spokesman said he had nothing to say "except that we can confirm that the VCM plant is undergoing an extended, scheduled turnaround."
By: Alfred Tong
+65 6780 4359
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