S'pore's chemical industry secures a double boost

S'pore's chemical industry secures a double boost

SINGAPORE (AFP): Singapore's ambition of becoming a regional
chemical hub secured a double boost yesterday with the start-up
of its second petrochemical plant and the launch of work on a
major Japanese project.

The Petrochemical Corp. of Singapore (Pte) Ltd. (PCS) on
Tuesday announced that its second plant in the city-state had
gone into production on schedule to meet regional demand for
petrochemicals.

The plant, named PCS II, is part of a US$2.4 billion expansion
project. It will double the company's existing capacity to around
one million tons of ethylene per annum, PCS said.

Ethylene and other petrochemicals are the basic building
blocks for making plastics, fibers and packaging materials as
well as automotive and electronic products.

PCS, a joint venture between Japan-Singapore Petrochemicals
Co. Ltd. and Shell Overseas Investments BV of the Netherlands,
said the new cracker, one of the largest of its kind in Asia, had
started up as scheduled on the week-end.

"The PCS II project was completed safely and on schedule," it
said in a statement. "The new cracker is built to meet the fast
growing demand for petrochemical products in the region."

It is the second petrochemical plant to go on stream in this
city-state, which is aiming to become a major chemical hub by
merging seven outlying islets into one giant chemical site to be
called Jurong Island.

Exxon Corp. of the United States announced recently that it
would build a third plant at a cost of $2 billion. Mobil Corp. is
studying the possibility of setting up a fourth petrochemical
complex here.

The new plant goes on stream at a time when industry officials
fear new capacity expected from the United States, Southeast Asia
and the Middle East might lead to a glut and pull down prices and
profitability.

Company officials have admitted that the outlook for the
industry continues to be "challenging amid increasing
competition," with many new plants in the region expected to come
on stream.

A group of Japanese companies, meanwhile, launched Tuesday the
construction of a US$300 million project on the Pulau Sakra islet
to produce higher- value-added chemicals such as MMA polymers,
acrylic acid and its derivatives.

The four main shareholders in the Singapore MMA and Acrlic
Group (SMAG) project are Sumitomo Chemical Co. Ltd., Toagosei Co.
Ltd., Nippon Shokubai Co. Ltd. and Sumitomo Seika Chemicals Co.
Ltd.

Sumitomo Chemical president Akio Kosai said the project,
scheduled for start-up by end of July 1998, would use feedstock
from the group's petrochemical complex in neighboring Merbau
island.

"The SMAG project will supply various chemicals and
intermediates to meet the growing demand for better quality of
life in this region and make an additional contribution to the
economic development of Singapore," Kosai said.

With its efficient industrial infrastructure and centralized
location in the rapidly-growing Asian market, Singapore "affords
good opportunities of investment for chemical companies all over
the world," he added.

The chemical industry is the second largest contributor to
Singapore's manufacturing output after electronics. Chemical
industry output last year grew about 10 percent to $15.7 billion
last year.

More than 300 international and local companies are involved
in the chemical industry here. They are linked to petroleum,
petrochemicals, pharmaceuticals, biotechnology and healthcare.