Sector News

Shin-Etsu to invest almost $1.5 billion in second PVC complex at Plaquemine

July 25, 2018
Chemical Value Chain

Shin-Etsu Chemical has announced that its Shintech (Houston, Texas) subsidiary has begun construction on the first phase of an integrated polyvinyl chloride (PVC) complex.

The plant will be built at Shintech’s Plaquemine, Louisiana, site where it already operates a world-scale vinyls complex. Shintech has obtained permits to build a plant capable of producing 860,000 metric tons/year of vinyl chloride monomer (VCM) and a chlor-alkali unit with capacity for 660,000 metric tons/year of caustic soda. The company is expected to provide ethylene feedstock from a previously announced ethane cracker it is building at Plaquemine.

Shin-Etsu says that the first phase will increase capacity by 290,000 metric tons/year of PVC and 270,000 metric tons/year of caustic soda. The investment in this phase is expected to be $1.49 billion, which Shintech will fund by itself. The company is targeting completion of construction by the end of 2020. Shin-Etsu says that Shintech’s overall production capacity after completing the first phase will be 3.24 million metric tons/year (MMt/y) of PVC and 1.57 MMt/y of caustic soda. Shintech also operates a PVC plant at Freeport, Texas.

The company states that the availability in the United States of ethylene made from ethane based on local natural gas has established a competitive advantage for Shintech compared with companies using ethylene produced from naphtha and crude oil. Since the completion of the existing PVC complex at Plaquemine in 2008, Shintech has raised production capacity there three times. The new ethane cracker at Plaquemine, with capacity for 500,000 metric tons/year of ethylene, is due onstream in 2019.

The company has not said when it will add the remaining chlor-alkali, VCM, and PVC capacities for which it has permits. The company says that Shintech intends to leverage the advantage of favorable raw material economics in the United States and “plans to further increase its capacity in a timely manner.”

Shin-Etsu says it is the world’s biggest producer of PVC and that Shintech is the biggest producer of PVC in the United States. Shin-Etsu’s remaining PVC capacity is in Japan and Europe.

World demand for PVC is increasing almost in line with worldwide GDP growth, according to Shin-Etsu. World demand for PVC reached 43 MMt in 2017. In the meantime, PVC capacity additions have lagged growth in demand and operating rates at PVC producing facilities have risen, says Shin-Etsu. The company expects this trend to continue. Worldwide demand for caustic soda, 77 MMt in 2017, has also been outpacing supply and this trend will likely continue, according to Shin-Etsu.

By Kartik Kohli

Source: Chemical Week

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