International Polymers Co. (IPC), a joint corporation between Hanwha Chemical Corporation and Saudi International Petrochemical Company Sipchem, has finished production testing and will start commercial operations.
The company said that cost reductions is the biggest advantage of IPC. It can lower the production cost since it uses ethane gas instead of oil-based naphtha as the raw materials for ethylene.
As of February, the international price of naphtha-based ethylene stood at US$950 (1.04 million won) per ton, while the figure of ethane gas-based ethylene was less than US$300 (328,140 won) per ton.
Even though the price of ethylene is falling due to the recent drop in oil prices, it is still three times as expensive as ethane. Based on this, IPC will produce 200,000 tons per year of ethylene-vinyl acetate (EVA) and low-density polyethylene (LDPE).
Thanks to the start of IPC operations, Hanwha Chemical will step up to 2nd place in the EVA production capacity, followed by DuPont with an annual production capacity of 400,000 tons. Hanwha Chemical is expected to produce a total of 310,000 tons per year, including at its Ulsan and Yeosu plants with a combined annual capacity of 160,000 tons and IPC with an annual capacity of 150,000 tons.
Based on this, Hanwha Chemical is planning to carry out a dual plan to focus on producing high-value-added EVA in Korea, including solar battery film and hot melt, while producing commonly-used products, including EVA, in Saudi Arabia.
Hanwha Group CEO Kim Chang-bum visited Saudi Arabia in March and met Abdul Aziz Al Zamil, chairman of Zamil Group, which is the biggest stockholder of Sipchem, and Abdul Rahman Al Zamil, chairman of the Council of Saudi Chambers of Commerce & Industry, discussing measures to continuously cooperate in business.