Kraton joint venture project to supply market in 2015

ERJ staff report (PNC)

Guangzhou, China – Kraton Performance Polymers Inc. said that its joint venture project should be operational in the third quarter of 2015, reports Isaac Li of our sister publication Plastics News China.

In February, Houston-based Kraton signed a deal with Formosa Petrochemical Corp. to create a 50/50 joint venture that eventually will operate a 30 000 tonne per annum hydrogenated styrenic block copolymer plant in Mailiao, Taiwan.

At Chinaplas in Guangzhou, HSBC project spokesman Michael Wong said the plant is expected to start supplying the international market by the middle of the third quarter of 2015.

Wong serves as plant general manager, Asia Pacific, as well as president of Kraton Formosa Polymers Corp.

In an interview on 20 May, Wong said a major issue with establishing projection on the mainland is feedstock availability.

When the 50-50 joint venture project encountered objections by Taiwan's environmental authorities last year, Kraton said it would expand in Asia on a stand-alone basis and listed China as one of the considerations. Then the Taiwan project came back on track when Formosa Petrochemical worked out issues with the environmental permits for the project.

Taiwan offers more sufficient supply of feedstock than the mainland, Wong said. In China, the joint venture would be competing for feedstock with local companies such as Yangtze Petrochemical Co. Ltd.

On the logistics front, it's more cost-effective to ship products from Taiwan to Guangdong and Fujian provinces than from the Yangtze River delta.

In addition to the abundant supply of butadiene, Wong, speaking at a news conference on the opening day of the Chinaplas show, said Mailiao also offers good infrastructure, local talent pool, as well as space for future expansion.

Kraton's China sales reached $76m (€58m) in 2012, accounting for 26 percent of the Asia Pacific regional sales.