S Korea’s Honam to expand Titan’s crackers post acquisition

22 July 2010 09:50  [Source: ICIS news]

Mumbai (ICIS news)--Honam Petrochemical plans to expand the capacity of two Titan Chemicals Corp crackers in Pasir Gudang, Malaysia, once it completes the acquisition of the company, a source close to the South Korean major said on Thursday.

“Titan’s crackers are small, but they have found that there is potential to increase capacity by revamping them,” said the source, who added that Honam would determine the capacity increase after the deal was closed.

Titan’s No1 cracker has a capacity of 285,000 tonnes/year, while the No 2 cracker can produce around 435,000 tonnes/year, according to an earlier ICIS report.

It was possible to expand the capacity of the two crackers at Pasir Gudang, Malaysia, to 600,000 tonnes/year each, he added.

Expansion of the cracker’s derivatives, which include polyethylene (PE) and polypropylene (PP) units, would also be carried out, said the source.

Honam was also considering adding new downstream plants at the site, he said.

“The expansions will be based on Honam’s expertise and experience in the petrochemicals sector. Synergy is also possible in management of the complex, marketing and sales,” he added.

The Titan acquisition was in line with Honam’s strategy of increasing its competitiveness in the domestic and international petrochemicals business, by securing competitiveness of scale, he said.

Honam would continue to look for more merger and acquisition (M&A) opportunities in Asia for basic chemicals, intermediates and speciality chemicals, said the source.

Target segments included olefins, polyolefins, ethylene oxide derivatives and environment-friendly chemicals, he added.

“They will also be pursuing chemical business expansions in the Middle East by establishing joint ventures with local partners,” he said.

While Honam’s planned cracker and derivatives joint venture with Qatar Petroleum (QP) had been shelved, the company would continue pursuing other opportunities in Saudi Arabia and Qatar.

“They are also keeping an eye on the China market, with a view to establishing a production and marketing platform,” he added.

Honam had already began construction of a 100,000 tonne/year ethylene oxide (EO) and 50,000 tonne/year ethanolamines project in Zhejiang, China, scheduled for completion in 2012, according to the source.

The EO unit was a joint-venture with a Chinese petrochemical company, while the ethanolamines facility was 100% owned by Honam, he said.

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By: Malini Hariharan
+65 6780 4359



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