Singapore-based plastics producer Indorama is planning to invest more than $1bn to build a petrochemicals plant in the GCC region, the group’s managing director Amit Lohia says.
Indorama is looking to construct a complex producing chemicals in the polyester value chain, which includes paraxylene (PX), purified terephthalic acid (PTA) and polyethylene terephthalate (PET).
“[We see the] Middle East as an opportunity for greenfield expansion relative to acquisitions. There are still a lot of hydrocarbons available for feedstock in our kind of complexes,” Lohia tells MEED, with the company expecting to sign a deal with a GCC government later in 2013.
The Middle East and North Africa (Mena) market for PET – a chemical used to make plastic drinks bottles – is expected to grow 9 per cent a year over the coming years, but the region will have to rely on exports due to the size of the projects being built.
“The infrastructure is there [in the GCC] to support large complexes, in terms of pipelines and ports, and there is a lot of potential to integrate with existing complexes,” says Lohia. “It is very central, in terms of exporting to Asia, Europe and even the Americas.”
Indorama must negotiate an allocation of naphtha feedstock from a host country before going ahead with the construction of a PX-based complex in the GCC.
“You need heavy naphtha as a feedstock to make xylenes, so the shift in the GCC [towards naphtha from ethane-based chemicals] naturally supports such projects,” says Lohia.
This week, Indorama announced it would build a $1.2bn fertiliser plant in Nigeria. The company is also looking at expansions in the US – on the back of shale gas developments – and in central Asian countries including Uzbekistan.
Listed on the Thai Stock Exchange, Indorama is the world’s largest PET producer, reporting revenues of $6.1bn in 2011.