Integration the way to go for polyester makers: India's Reliance

14 July 2011 11:46  [Source: ICIS news]

SINGAPORE (ICIS)-- Polyester chain facility integration can offer producers significant advantages in their operations including protection from the volatility of feedstock prices, said Rajen Udeshi, Reliance Industries polyester chain president, during the 5th Asian Aromatics & Derivatives Conference on Thursday.

Feedstock price fluctuations in the polyester chain in recent years have affected the spreads between feedstock and products, and consequently the profitability of independent producers, Udeshi said.

“Integration of polyester chain facilities significantly stabilises the combined spread between feedstock and polyester,” he said.

The combined spread from naphtha to polyester ranged from about $600-900/tonne (€426-639/tonne) in 2009 to 2010, according to Udeshi.

Besides stabilising the price spreads of feedstock and polyester, integration offers benefits to producers such as improved logistics, lower fixed costs, the capability to optimise production planning and reduced conversion costs.

However, even with integration adoption, various other factors can still affect the stability of the combined spread in the polyester chains, an industry expert told ICIS. These include crude oil prices, polyester demand and feedstock demand from aromatics blending.

Headquartered in India, Reliance Industries is the world’s biggest polyester producer with an output of two million tonnes per annum. It is also the largest domestic purified terephthalic acid (PTA) producer and operates upstream paraxylene (PX) and petroleum refining facilities.

The 5th Asian Aromatics & Derivatives Conference runs from 13-14 July.

($1 = €0.71)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Wai Maung
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