Meanwhile, Arlanxeo is still closely tied to Lanxess and de Vries has set a target of three-to-five years to establish the JV as an independent, stand-alone organization.
"There is nothing that we have to do tomorrow. We do it step-by-step, making sure that it is implemented in the right way," the CEO said recently in an interview at K2016 in Dusseldorf.
Since its formal launch on April 1, Arlanxeo has set up headquarters in Maastricht, Netherlands, and established group functions including human resources, communications, finance, information technology and legal. These departments report to a board comprising two members each from Aramco and Lanxess.
"What we are doing now is building the organization," de Vries said. "Two companies are coming together, who did not have any experience with each other before starting this joint venture. Aramco is of a different magnitude, different part of the world, different culture."
The executive added that both companies are leaning on one another's experience in their respective fields.
A three- to five-year timeframe is also envisaged for Arlanxeo to start receiving feedstock in significant quantities from its partner, though de Vries declined to say how much Saudi feedstock would reach Arlanxeo's plants which are all located in other parts of the world.
"Every figure I put on the table right now would be meaningless," he said. "We have not made such calculations because it depends very much on Aramco's next steps. Aramco is very busy with developing this petrochemical company and how that develops is up to [them]. It is not up to us."
However, he added that over time Arlanxeo will also get materials from Aramco, however it likely will not be 100 percent because "not every raw material can be supplied everywhere, standalone, in the world by Aramco."
But while Arlanxeo will continue to buy feedstock from suppliers—such as Ineos, Shell and Sabic—de Vries said the JV would have a totally different position in raw materials than the business had in the past.
"With Aramco as a partner, you see a difference when you negotiate with your raw materials suppliers," the CEO explained. "We have different discussions, not because we say 'hey, we want to get rid of you as a supplier.' Not at all. We have 20 production facilities across the world, South America, North America, Asia and Europe and everywhere we need raw materials."
Current priorities
For now, though, there are other priorities, including making sure the SR business runs as it did before without any interruption to customers in terms of product-supply, support and services.
Arlanxeo is currently increasing production at two new plants in the Far East, which includes a 160 kilotons per year EPDM facility in Changzhou, China and a 140 kilotons per year neodymium butadiene rubber plant next to an existing butyl rubber plant on Jurong Island, Singapore.
The Changzhou EPDM plant is based on ACE technology, first implemented at the company's Dutch EPDM plant in Geleen. According to Arlanxeo, the post-metallocene technology yields polymers that are purer and offer better processing and performance properties than conventional materials.
The CEO said the company is pleased with the way the two new plants are running.
"That is a new experience," he said, "we haven't built a plant of that size before in China, we have not built a plant like that in Singapore before. Even if we have the experience and the knowhow, it still has to happen."
Arlanxeo now has to grow demand for materials from these new facilities at a time when other companies are also bringing on new capacity in the region.
In EPDM, these include a 70 kilotons per year Sinopec-Mitsui plant in Shanghai, a 50 kilotons per year plant in Ningbo, China by South Korea's SK Global Chemical and Kumho Polychem's 50 kilotons per year unit in South Korea.
"Within Lanxess we were only part of a chemical company," he said. "Now we are only rubber and that is a good signal to our customers. We are a rubber company, all our focus is on rubber, all our investment is on rubber. Everyone can see now that we are a company that is here to stay and one of those most likely to resist any downward (market) cycle. We are a long-term partner."
