SINGAPORE—Saudi Basic Industries Corp. and Korean petrochemical company SK Global Chemical have formed Sabic SK Nexlene Co., a 50-50 joint venture.
The JV will purchase the Nexlene solution technology and a plant that manufactures a range of high-performance ethylene/alpha-olefin copolymers products in Ulsan, South Korea.
The companies reported the aggregate purchase price for the technology and plant is approximately $640 million. This deal closed earlier this month in Seoul and was presided over by Abdulrahman Al-Fageeh, Polymers executive vice president, and Hwa Youp Cha, SK Global Chemical CEO.
Singapore-based SSNC's wholly owned subsidiary, Korea Nexlene Co., owns the plant in Ulsan, which has an annual capacity of 230,000 tons. The parties intend to expand capacity with the construction and operate additional plants globally.
The plant will produce metallocene-based linear low-density polyethylene, polyolefin plastomers and polyolefin elastomers, the companies said, to meet the growing needs of diverse industries such as flexible packaging, industrial and agricultural film, automotive, consumer products (footwear), medical, and construction.
“We are very pleased to launch this partnership with SK Global Chemical, which is the latest stage in Sabic's global expansion,” Yousef Al-Benyan, Sabic's acting vice president and CEO, said in a statement.
By growing the company's presence in South Korea, Al-Benyan said it is “opening up new markets globally and reinforcing our position as a global leader—a major goal of our 2025 strategy.”
Al-Fageeh said the venture would enable both partners to grow in the highly specialized polyethylene market by providing high-value polymer products to global customers.
“The solidification of our partnership with SK Global Chemical will complement our polymers portfolio and enable us to offer a more varied, cost-effective and customer-focused selection of products,” he added.
Nexlene will offer customers better performance, manufacturability and final product properties, the companies said, including excellent impact strength, enhanced toughness, superior transparency, low heat-seal temperature, incremental output and improved organoleptic properties. These unique properties and characteristics, the companies said, offer a range of possibilities for the development of innovative product applications.
The packaging industry will benefit from lighter versions of Nexlene for producing films to manufacture flexible food packaging and wrapping materials. These materials also can be used in pipes and consumer goods, such as roto-moulded articles.
The joint venture marks the latest Sabic investment in manufacturing capability in the Far East. With Nexlene, Sabic said it has access to the most complete polyethylene technology platforms within the petrochemical industry.
SK Global Chemical is a petrochemical company in South Korea, the first in the country to build a naphtha cracking facility in 1972.