Investments in chemical plants pour in as new petrochemical crackers provide the feedstock
Ronnie Lim Business Times 10 Feb 11;
(SINGAPORE) Chemical investments are streaming into Jurong Island as feedstock flows from its new petrochemical crackers. The chemicals that are churned out will go into producing a variety of everyday products, ranging from plastics, DVDs, plywood and paints to textiles.
Taiwan's Chang Chun Group is setting up three new plants here while Japan's Denka will open one more. Chang Chun expects to employ about 500 personnel for its Singapore operations, which will generate annual revenue of about S$1.5 billion.
A hint of the Taiwan group's investment was first dropped by Finance Minister Tharman Shanmugaratnam at a recent conference when he cited Dairen Chemicals as one of the new incoming chemical investors on Jurong, together with others like Lanxess and Asahi Kasei.
Dairen Chemicals is, in fact, a joint venture between Chang Chun and another Taiwanese group, Nan Pao Resins Chemical Company, industry sources said.
Chang Chun's three plants will cost a total of S$500 million and are expected to be up and running by the first quarter of 2013. One possible trigger for the investment is Shell's new US$3 billion petrochemical complex, from which the Taiwan group will source ethylene and propylene to help it meet the strong global demand for chemicals.
One of its new units is a 150,000 tonnes per year (tpa) allyl alcohol plant. Allyl alcohol is a starting material for a variety of speciality monomers and polymers (plastics).
Chang Chun is also setting up a 540,000 tpa cumene plant to make phenols that go into producing plywood, DVDs and CDs.
Its third plant will churn out 350,000 tpa of vinyl acetate monomer (VAM) which is used in paints, adhesives and textiles.
Meanwhile, Japan's Denka is investing S$46.5 million in its second plant here. The Japanese company first came to Singapore in the early 1980s when it started producing acetylene black here. That plant drew feedstocks from the first petrochemical complex here, Petrochemical Corporation of Singapore.
Its second investment here, at the Seraya sector on Jurong Island, will produce 20,000 tpa of chemicals that can go into producing automotive interior parts. This Denka IP plant is expected to use styrene feedstocks from the new Shell petrochemical complex.
The availability of feedstocks on Jurong Island was clearly a draw for Denka to invest here, given that its 16,000 tpa Chiba plant, near Tokyo, is already operating at full capacity to cater to markets like China, India and the Middle East.
To meet further market demand, and given 'the favourable business climate in Singapore', Denka said it decided to build the high-value styrene-based plant here. It has already secured land for the new plant which is targeted to start up in April 2012.
The Chang Chun and Denka investments are the latest in a stream of chemicals investments being made here.
The Economic Development Board said last month that 'the strong FAI (fixed asset investments) forecast for 2011 (of S$12-14 billion) is in part indicative of the interest in speciality chemicals projects that have been enabled by the two recent petrochemical crackers'.
Shell's new petrochemical complex started up early last year, while Exxon's US$5-6 billion second petrochemical complex is expected to start up later this year, or early next year.
The petrochemical complexes, including PCS, have drawn in a recent wave of Japanese synthetic rubber investors like Zeon Chemicals, Sumitomo Chemicals and Asahi Kasei, after Germany's Lanxess' S$712 million buytl rubber facility.
Shell is also ramping up production of high-purity ethylene oxide (HPEO) to fuel new investors making products like detergent and offshore drilling chemicals at a new 'HPEO corridor' there.
