InterviewMEGlobal seeks acquisitions, expansion

01 July 2009 21:29  [Source: ICIS news]

By Joseph Chang

NEW YORK (ICIS news)--MEGlobal will look to expand its global presence in ethylene glycol (EG) through expansion and acquisitions, CEO Henry Roth said on Wednesday.

“Alberta has a very favourable feedstock cost position, and with the development of the oil sands there, this could open up interesting possibilities in the future in terms of future production,” Roth said.

“We run our plants there full-out, but for further expansions, we are feedstock-restricted right now. We would be interested in any brownfield expansion in Canada, depending on feedstock supply,” he added.

The Dubai-headquartered EG producer, a 50:50 joint venture (JV) between US-based Dow Chemical and Kuwait’s Petrochemical Industries Co (PIC), has two production locations – in Fort Saskatchewan and Prentiss, in Alberta.

MEGlobal has total capacity of around 1m tonnes/year and markets over 3m tonnes/year of EG, including its own production.

The company is also looking at expansion in hydrocarbon-rich areas of the Middle East, Africa and Latin America.

“Typically, our parent companies would be the ones investing in mega petrochemical projects, and we would then come in to deal with the glycol,” Roth said.

“But MEGlobal in itself has the capability to look at projects it could finance itself, enter into joint ventures or even make acquisitions as companies seek to rationalise EG operations,” he added.

Latin America has the potential for developing big hydrocarbon discoveries to support regional growth, and MEGlobal is “looking to participate in all of this”, Roth said.

In addition, Latin America is on the forefront of using alternative feedstocks to produce chemicals, he noted.

“We also look at emerging technologies in the field of biomass-based feedstocks that over time, in a high energy-cost scenario, could be viable. In Brazil, sugarcane-based feedstock could be interesting,” Roth said.

MEGlobal, which celebrated its five-year anniversary as a joint venture on 1 July, will have sales of over $2bn (€1.4bn) in 2009, he added.

($1 = €0.71)

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By: Joseph Chang
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