22 May 2013 13:53 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--Versalis' ongoing business strategy will focus on the strengthening of its elastomers business in Asia, which is expected to see demand growth of 4-6% over the next five years, the CEO of the company said on Wednesday.
"The internationalisation of our company is one of the pillars of our relaunch [strategy]. We have chosen to go with the model of partnerships in Asia as we believe it is the fastest, most effective and has less risks associated with it," said Daniele Ferrari on the sidelines of the World Rubber Summit 2013.
Asia currently accounts for about 5% of Versalis' overall turnover and the company is aiming to boost this to around 20% by 2017-2018, Ferrari said.
The Italy-based firm in July last year signed a heads of agreement with Malaysia's state-controlled energy firm PETRONAS which outlines the development and joint operation of a production facility for elastomers in Pengerang, Johor.
Engineering activities are in an advanced phase and the bidding process to award the detailed engineering, procurement and construction will be started shortly, according to Ferrari.
The project start-up is scheduled in 2017.
Versalis also signed an agreement in October 2012 with South Korean producer Lotte Chemical - formerly Honam Petrochemical - for the development of an elastomers production plant in Yeosu.
The new site will use Versalis’ proprietary technologies and will have a production capacity of about 200,000 tonnes/year of elastomers, which will be mainly delivered to the Asian markets.
"The output from the new site in Korea is targeted at the Korean, Japanese and the Chinese market. We believe in the next three to four years we will be well positioned to serve the automotive tyre market in Asia," Ferrari said.
Versalis has identified China as the biggest potential market in Asia, where the number of vehicles is expected to surge from 100m currently to 215m by 2020.
The company in September last year opened its first regional offices at the firm's Shanghai headquarters to subsidiaries Eni Chemicals Trading (Shanghai) and Versalis Pacific Trading (Shanghai).
These are two newly-established companies, wholly owned by Versalis, which will handle the import and sale of chemical products, technology licensing as well as the development of partnerships in Asia.
The new offices in Shanghai are expected to increase performance in China by 20% through 2013, mostly from its elastomers business, and this trend is expected to continue, according to Ferrari.
"We are trying to set up a technology centre [in Shanghai] as well so we can follow up with our customers in technical support," he said.
Versalis is not in talks for additional partnerships in Asia currently, but is planning to set up an additional office somewhere in the region in the near future, Ferrari said.
Meanwhile, the company is looking at Latin America for potential partnerships, Ferrari said.
"We are discussing there for a potential partnership because it's a key market where our key customers are producing tyres. Latin America is very promising," he added.
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