S'pore sets into motion big petrochemical venture
S'pore sets into motion big petrochemical venture
SINGAPORE (AFP): Singapore launched a S$3.4 billion (US$2.26 billion) joint venture on Monday to produce high-value petrochemicals, capitalizing on rising demand in Asia, officials said.
The officials said that the complex on nearby Ayer Merbau island is Singapore's second and involves construction of energy- efficient plants by Japanese, European and U.S. multinationals.
The project will be the largest single integrated manufacturing facility in Singapore when combined with a maiden complex built at a cost of $2 billion 10 years ago.
"This second complex is a strategic project for Singapore -- it heralds a new phase of development for our petrochemical industry," Trade and Industry Minister Yeo Cheow Tong said at the project's groundbreaking ceremony.
Yeo said that the second complex was well timed to take advantage of the current upturn in the petrochemical industry after a period of sluggish demand.
The project, he said, was strategically located within the Asia-Pacific region, which was set to see a rise in share of worldwide chemicals demand by 10 percent to 40 percent by 2000.
Japanese
The project is spearheaded by the Petrochemical Corp. of Singapore Pte. Ltd. (PCS), a 50/50 joint venture between a Japanese consortium led by Sumitomo Chemical Co. Ltd. and the Netherlands' Shell Overseas Investments BV.
The other four companies involved are The Polyolefin Co. (S) Pte. Ltd. (TPC), Philips Petroleum Singapore Chemicals Pte. Ltd. (PPSC), Denka Singapore Ptd. Ltd. (DSPL) and Jurong Island Industries Gas Pte. Ltd. (JIIG).
TPC is a 70/30 joint venture between another Japanese consortium also led by Sumitomo Chemical and Shell Overseas Investment while PPSC is a 50/30/20 joint venture between Phillips Petroleum International Corp. of the United States, Singapore state-run Economic Development Board Investments Pte. Ltd. and Sumitomo Chemical.
DSPL is fully-owned by Japan's Denki Kagaku Kogya K.K., while JIIG is a venture involving a Japanese, Dutch, British and French investments.
All the multinationals have stakes in Singapore's first petrochemical complex on the same island.
The complex, which will come on stream by the second quarter of 1997, incorporates a huge chemical plant under construction on a neighboring islet, run as a 70/30 joint venture between Shell and Japan's Mitsubishi Chemical Corp., officials said.
The project would mostly be funded by a mix of borrowings and equity from cash generated by the ongoing operations of plants forming part of the maiden complex or direct shareholders' funds, they said.
Under the project, the PCS will build a second naphtha cracker to manufacture products such as ethylene and propylene and byproducts such as acetylene.
"The expansion will consolidate our position as leading manufacturer of petrochemical products in the Asia Pacific-region including the production of some one million tons of ethylene after 1997," said T. Okada, PCS's managing director.