Thursday 28 Mar 2024
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KUALA LUMPUR (July 21): Petroliam Nasional Bhd (Petronas) has once again teamed up with Germany's BASF SE, this time to build a new production plant for highly reactive polyisobutene (HR-PIB) in Kuantan, Pahang.

In a joint statement today, Petronas' 64.35%-owned subsidiary Petronas Chemicals Group Bhd (PetChem) and BASF said the new plant will be located at the site of their existing joint venture (JV), BASF Petronas Chemicals Sdn Bhd.

The proposed plant, which will have the capacity to produce 50,000 tonnes of HR-PIB per year, is expected to start production in the fourth quarter of 2017.

"(It) will be the first of its kind in Southeast Asia," both companies said.

HR-PIB is an important intermediate product for the manufacturing of high performance fuel and lubricant additives, including additives for sludge prevention.

BASF president of performance chemicals division Dr Christian Fischer said the joint investment with PetChem at the Kuantan Verbund site will further increase security of supply for HR-PIB, especially for the Asian market.

"The new plant will further strengthen the global footprint of BASF as the leading supplier of this product," he added.

BASF Petronas Chemicals’ fully integrated Kuantan site is one of BASF’s two Verbund sites in Asia-Pacific. It also operates production facilities for HR-PIB at its Verbund sites in Ludwigshafen, Germany and Antwerp, Belgium, and within a JV with Sinopec YPC in Nanjing, China

“The investment marks another significant milestone in the development of the Kuantan site as a leading specialty chemicals hub in Asia-Pacific, in line with PetChem’s strategy to diversify into specialty chemicals and solutions,” said PetChem president and chief executive officer Datuk Sazali Hamzah.

“It also strengthens the presence of highly advanced and forward
oriented technologies and expertise in Malaysia and the region,” he noted.

In addition to the proposed plant, BASF Petronas Chemicals is also building two plants at its Kuantan site namely an integrated aroma ingredients complex and a 2-ethylhexanoic acid (2-EHA) production plant.

As at 2.49pm, PetChem shares (fundamental: 1.65; valuation: 0.5) were traded up 1.4% at RM6.51, with 2.52 million shares done. Its market capitalisation stood at RM51.84 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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