Invest in change

Invest in change

20 April 2012 10:41  [Source: ICB]

European producers are facing intense competition from more advantaged regions blessed with cheaper feedstock and energy costs. To address this, versalis's new strategy aims to introduce changes to its infrastructure and production facilities, weeding out the poorly performing units and enhancing the efficiency of those that remain.

Invest in change 

Many of the company's sites will be restructured by 2016

This means consolidation of production that is least competitive, such as the polyethylene (PE) lines, expansion of the specialty segment and better integration and flexibility.

The Priolo site in Sicily remains of the utmost importance for the producer but, like many of the company's plants, it requires a radical overhaul.

At 760,000 tonnes/year, Priolo is its largest steam cracker but is inefficient and has poor downstream integration. Aging technology makes the facility barely competitive, with the linear low density polyethylene (LLDPE) plant having suffered losses for several years, says Giovanni Saporito, head of manufacturing and operations.

As part of versalis's new strategy, Priolo will be restructured to match the company's best performing - and newest - cracker at Brindisi on the Adriatic coast. These revisions will transform the loss-making facility.

"It is important we increase the efficiency across all our plants and regenerate Priolo," says Saporito.

"With the condition of the ethylene and PE markets, it's not necessary for us to have all this capacity. We will therefore change the assets in Priolo, stopping one line and increasing the capacity of the second. In terms of energy, this will help us recover about 2,000 Kcal/kg of ethylene," he says.

Energy reduction is central to the company's new direction. With escalating energy costs in Europe, he says these moves will result in significant savings. Within four years, carbon dioxide emissions are expected to be reduced by 270,000 tonnes/year - equivalent to about 100,000 tonnes/year of crude oil.

The plans will mean the closure of its 150,000 tonne/year PE line and the construction of plants to recover the C5 and C9 cuts. A new unit will be built for isoprene production and another for tackifier resins.

"We are reducing ethylene capacity in Priolo but increasing capacity in Brindisi so this results in no significant reduction in C4 and C5 for our elastomers," notes Saporito.

The first stage of the €220m ($291m) project - the cracker restructuring and PE closure - is scheduled for completion in 2014.

By: Andy Brice
+44 20 8652 3214

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