Tokyo: Japan's Mitsui said yesterday it is considering taking part in a $7 billion petrochemical complex in Saudi Arabia planned by Saudi International Petrochemical Co. (Sipchem).
The Nikkei business daily reported earlier that Mitsui, Japan's second-biggest trading house, could invest tens of billions of yen in the new plant, but a spokesman for the trading house said nothing had been decided. A similar report appeared in the trade magazine Chemical Daily a week ago.
Sipechem said on its website in November that the Saudi company was working with potential partners - Mitsui, US chemical giant DuPont and Lucite of Britain - on the final agreements for the new complex. The agreements are expected to be signed early this year, it said.
Shares in Mitsui were down 2.8 per cent at 1,896 yen yesterday, while the benchmark Nikkei average was little changed.
The new olefins and derivatives complex will be completed by 2011 and will have annual production capacity of 1.3 million tonnes of ethylene and propylene, which will be used to produce 800,000 tonnes of high-added-value polymers.
Koji Nakamura, Mitsui's executive managing officer, on Wednesday cited participation in a petrochemical complex in the Middle East as one of the company's biggest business targets in the chemicals sector.
Mitsui aims to boost profit from its plastics and inorganic chemicals businesses to 32 billion-56 billion yen ($265 million-$464 million) in three to five years, up from 26 billion yen now, by targeting the automobile and information-technology sectors.
"Demand for plastics used in cars will grow sharply in line with strong demand in the global market for fuel-efficient cars," Nakamura said
If Mitsui agrees to join the project, it would become the second big Saudi and Japanese chemicals venture after Sumitomo Chemical and Saudi Aramco's $10 billion refining and petrochemicals joint venture.