Efficiency targeted

23 April 2012 00:00  [Source: ICB]

The intermediates business will be bolstered by new production lines, a renewed focus on paraxylene and increased impetus to raise efficiency and cut costs

Emanuele Tagliabue, head of the intermediates business, says the main objective in the olefins sector is to increase efficiency and reallocate its presence in Europe.

"We're looking to increase efficiency and improve production costs; it is fundamental to be efficient and have low cost. Every company is focusing on improving efficiency - you can never stop if you want to survive," he says.

"We will not have joint ventures like some of the other business units but we have plans to build additional C5 lines, and focus more on [paraxylene] PX," says Tagliabue.

The Priolo steam cracker in Sicily will have one of its two lines removed. Although this will affect supply of both ethylene and propylene, the company will continue to serve its core customers and captive requirements, but with more efficient furnaces with a higher yield.

New plants are also being built to capitalize on the C5 and C9 cuts. "We believe there is important value from these streams," says Tagliabue. "There are molecules that we do not extract at the moment from C5 and C9 streams, and these will bring value to our system and support to the group strategy."

Conversely, there will be no reduction of capacity for aromatics, phenol and derivatives, he says. However, he points out that orthoxylene (OX) is no longer considered a core product. Versalis will turn its attention to PX instead. Tagliabue says work is underway to increase output of the aromatic, with investment set aside to expand PX production expected to total €80m ($106m).

The strategy includes raising production at the Mantova site, where the group produces phenol, acetone and cyclohexanone.

"This will allow us to continue to follow the market growth in and outside Europe," he says.

Tagliabue adds that a stronger butadiene (BD) position will be of benefit in the longer term too. This is particularly relevant with the shale gas phenomenon in the US and ethane advantage in the Middle East limiting supply of C4s. Equally, European olefins producers are trying to maximize the use of lighter feedstocks. With the landscape changing so rapidly, "we must put ourselves in a strong position to compete," he says.

Next article - Polyethylene rivival planned

By: Andy Brice
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