Page 41 - Plastics News October 2016

INTERNATIONAL NEWS
South Korean Government
calls for restructuring of
petrochemicals industry
The South Korean government spearheading
restructuring overcapacity industries has warned
petrochemical and steelmaking sectors would be
next to come under scrutiny
after shipbuilding and
shipping areas and advised
voluntary streamlining.
The government specifically
named terephthalic acid
(TPA), a material of polyester Integrated Petrochemical Industries Company’,
fiber and plastic bottle, polystyrene (PS), a material used
for cases of household appliances, as well as steel plate
and steel pipes as areas in need of scale-down. “The
petrochemical industry has fared relatively well all
thanks to cheap oil prices. It should make most of the
boon to restructure preemptively to stay ahead in the
competition after business conditions deteriorate with
rebound in oil prices,” Joo Hyung-hwan, minister of Trade,
Industry and Energy, said at a meeting held to discuss
measures to strengthen competitiveness of the steel and
petrochemical industries. According to a consultation
report of global consulting firm Bain & Company, four
products among the 33 major petrochemical products
have been facing an oversupply. The products include TPA,
PS, polybutadiene rubber and styrene butadiene rubber
(BR, SBR) and polyvinyl chloride (PVC). The exports of the
four products amounted to 3.42 billion won ($3.12 million)
last year, and the petrochemical industry accounts for 7
percent of the country’s gross national product (GNP), the
fourth largest exports of the country. The government
drew up the conclusion based on consultation reports
from Bain & Company for the petrochemical industry
and Boston Consulting Group for the steel industry. It will
come up with specific plans to enhance competitiveness of
the petrochemical industry on Friday. But some industry
observers doubt whether the government would be able
to come up with any strong measures required to reform
the country’s petrochemical and steel industries as the
reports that the government consulted were initially
requested by the related industry associations that are
formed with members of related companies.
Plastics News | O c t o b e r 2 0 1 6 41
KPC to set up new subsidiary
for refinery, petrochemicals in
Azzour
Th e M i n i s t r y o f
Commerce and
Industry (MCI) approved
a request from Kuwait
Petroleum Corporation
(KPC) to set up what
would become the
largest oil company in Kuwait with an estimated
capital of KD 1.8 billion, of which around KD 450
million (25%) is paid. The new company, ‘Kuwait
would serve as KPC’s subsidiary that runs refining
and petrochemical projects, including running and
executing the integration project between the
refining and petrochemical complex in Az-Zour, which
includes Az-Zour Refinery, a petrochemical complex
and a liquefied natural gas (LNG) importing facility,
as reported by kuwaittimes.net.
It is expected that KPC’s next step would be to offer
50% of the new company’s shares in an initial public
offering, in order to present investment opportunities
for citizens to participate in capitalist oil ventures,
though this issue has not been confirmed yet. If this
scenario goes through, the company would then be
listed in Kuwait Stock Exchange, Al-Anbaa reported
quoting unnamed sources. Deputy Chief Executive
Officer (CEO) of Kuwait’s Mina Al-Ahmadi Refinery
Ahmed Al-Jeemaz had confirmed two weeks ago that
the government and the Supreme Petroleum Council
gave their approval to establish the company, saying
that it was born giant and very significant “because
of its importance in running Az-Zour refinery and
terminals to import liquefied natural gas and the
presence of an attached petrochemical complex.”
The company’s production capacity will be up nearly at
615,000 barrels per day, becoming one of the largest
refineries in the region, Kuwait News Agency (KUNA)
quoted Jeemaz, adding that 40% of its production will be
dedicated to the power stations of the low-sulfur fuel.