InterviewVersalis to invest over €200m in Europe biorubber complex

05 February 2013 15:57  [Source: ICIS news]

By Franco Capaldo

Daniele Ferrari - CEO VersalisLONDON (ICIS)--Versalis will invest over €200m ($270m) during the next five years into a new southern European biorubber industrial production complex, the Italy-based producer’s CEO said on Tuesday.

Daniele Ferrari said the company has shortlisted a set of potential sites and the exact location of the complex will be decided within the first half of this year.

At the end of January, Versalis, the chemicals division of energy firm Eni, announced it will form a strategic partnership with US-based agricultural-based biomaterials firm Yulex Corporation to build an industrial production complex in southern Europe to manufacture guayule-based biorubber materials.

Guayule is a renewable, non-food crop that requires little water usage, no pesticides and is an alternative source of natural rubber.

The overall production chain will include the guayule crop aggregation, the construction of a natural rubber extraction unit, the biomass power plant, and a research project to develop technologies targeting other industrial segments, Ferrari said.

As part of the deal with Yulex, Versalis will gain the exclusivity to the process technology for a defined territory.

Versalis has plans to expand its technologies in the synthetic rubber business by including guayule rubber as a supplementary business opportunity and an increased commercial offering.

“The specialty uses of guayule rubber is already well defined and specified in niche applications. It’s an existing and growing market,” the CEO said.

Ferrari said the location of southern Europe was chosen because the complex needed be built in a territory where there is the right climate for the guayule crop to grow as it was important to be close to the feedstock source, in order to be energy efficient.

“Being close to the feedstock source is key for us, the crop can be grown in arid, or semi-arid land,” he said.

He also said it was important to be located in Europe as Versalis still has a major customer presence in the region, and it is a good first step to help introduce a new type of rubber to the market.

“We are not short from deciding on a location, it is just a question of selecting where the logistics will be better,” Ferrari said.

The CEO added that the guayule crops will be grown in spring in order to understand the yield and quantities needed, while the replanting on a larger scale will happen during 2014.

“In the meantime, an extraction plant will be built, which will be operative early 2016. And the start-up of the biomass plant will begin early 2017,” Ferrari said.

The CEO added there will be further testing into possible industrial applications for guayule rubber, and the company will be looking in the future to other locations, possibly outside of Europe, to invest into a larger production unit.

Discussions for the project with Yulex began from when Versalis announced in April last year a new four-year €2bn investment strategy to reflect the company’s future direction.

“At that time [of the investment plan announcement] we had a number of people expressing a willingness to talk to us about projects, and Yulex was a company we thought was very complementary with what we do,” Ferrari said.

Ferrari also said the construction of phase 1 of the Matrica project, a 50:50 joint venture with Italy’s Novamont, to produce bio-based materials at its Porto Torres site in Sardinia, is underway. This will see the construction of seven new plants and a research centre, and will include 350,000 tonnes/year of bio-based capacity. Start up for phase 1 is expected at the end of this year, Ferrari said.

Meanwhile, Versalis’ plans to close a 150,000 tonne/year linear low density polyethylene (LLDPE) production line in Priolo, Italy, and build capacity to recover C5 and C9 cuts from the cracker, is also progressing as planned.

With regard to Versalis’ 70,000 tonne/year butadiene (BD) unit at its petrochemical site at Dunkirk in France, the CEO said the project has been authorised, engineering is ongoing, the license has been acquired and the process is progressing as planned with no delays. The plant will cost around €100m to build.

Start up is expected at the beginning of 2015, and will increase the group’s BD capacity in Europe by almost 25% as part of its four-year plan to develop its elastomers business.

Ferrari also provided an update on its proposed joint venture with state-controlled energy and petrochemicals major PETRONAS to build and operate elastomer plants in Malaysia’s southern Johor state. According to the CEO, several new meetings have taken place with designs of the plants being at an advanced stage.

He added that the bidding process will begin this month to identify the contractors which execute the engineering, procurement and construction of the projects.

In October, Versalis entered a partnership with Honam Petrochemical Corporation, one of the major petrochemical companies in South Korea, for the development of an elastomers production plant at its Honam facilities in Yeosu, South Korea.

($1 = €0.74)

By: Franco Capaldo
+44 (0)20 8652 3214

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