Investments for Lanxess and PCS plants may add up to $500m
Ronnie Lim 26 Jan 12;
DESPITE eurozone concerns, the go-ahead is expected soon for two planned petrochemical investments totalling over $500 million on Jurong Island.
The first is Lanxess' 200 million euro (S$330.7 million) Nd-PBR plant - the German group's second synthetic rubber facility here to supply to China and other Asian markets - which is looking 'very positive' to proceed, BT understands.
The second is Petrochemical Corporation of Singapore's planned C4 downstream plant, costing US$100-150 million, to supply feedstock to Lanxess' upcoming neodymium polybutadiene (Nd-PBR) project.
'We are looking to a final investment decision from the board for the project by end-March or early April,' PCS' deputy managing director Liew Jian Sheng told BT yesterday.
Lanxess' chairman Axel Heitmann told BT last September that despite the economic problems in Europe and the United States, it was staying on course with its Nd-PBR investment here - the second after a 400 million euro butyl rubber plant it is currently building. 'We are working hard to get all the approvals, and we expect to break ground on the Nd-PBR project by Q2, 2012,' he said.
Supporting this optimism that Lanxess will proceed with the Nd-PBR investment, PCS' Mr Liew said that to-date he has not had any indication otherwise.
PCS' C4 project - to extract butadiene - was, after all, key to Lanxess' decision to choose Singapore as the site for its Nd-PBR investment.
'A significant portion of the C4 plant's 100,000 tonnes per annum output will go to Lanxess,' Mr Liew said.
With Lanxess' Nd-PBR plant slated to start up in the first half of 2015, work on PCS' C4 plant will have to be concurrent.
'We want to get the C4 project going first, before we look at other projects,' Mr Liew said, when asked about PCS' earlier-disclosed plans for other upgrading investments at the $5.4 billion petrochemicals complex.
'The outlook for the chemicals industry is not that rosy at the moment, and there are also eurozone fears,' he said.
PCS is a quarter owned each by Shell and Qatar Petroleum International, with a Japanese consortium led by Sumitomo Chemicals owning the remainder.
Still, Mr Heitmann reportedly said in an interview with Bloomberg in New York this month that he is confident about prospects in 2012, with markets like Brazil promising 'serious' double-digit growth for the synthetic rubber maker.
Demand for Lanxess's energy-efficient compounds and plastics, used in tyres and car parts, will also be untouched by any slowdown in countries like China, he said, adding that 'there won't be a slowdown for these technology-driven products in China'.
New factories coming on stream in Asia will give a boost to Lanxess's earnings, he added.
Asia, especially China, is the target market for synthetic rubber from the manufacturing base which Lanxess is building up in Singapore. This kicks off with its $696 million butyl rubber plant here which is scheduled to start commercial operations in Q1 next year.
