Kraton- Formosa joint venture to produce HSBC polymer grades

Kraton Performance Polymers (Kraton) Formosa Petrochemical Corporation (FPCC) hae inked an agreement for a 50:50 joint venture to construct and operate a 30 kiloton hydrogenated styrenic block copolymer HSBC) plant, to be located in Mailiao, Taiwan. The plant will be operated by the joint venture and Kraton will undertake the global marketing of all products manufactured at the facility. This is subject to the completion of the necessary definitive agreements. The agreement establishes a framework between Kraton and FPCC governing all commercial, operational, technical and management aspects of the planned joint venture company. The paper work will be finalized by end of 2011 and the plant operations will in the H2-2013. The cost of the plant is currently expected to range from US$165-200 mln. "In response to growth in global demand for our differentiated grades of HSBCs, we have been evaluating alternatives for additional capacity that would employ Kraton's latest state-of-the-art technology for producing HSBCs. This announcement is the result of a comprehensive one-year site selection process involving significant Kraton resources, during which we considered several possible investment alternatives," said Kevin M. Fogarty, Kraton's President and CEO. "FPCC's significant project execution expertise and operational resources will help ensure timely completion of the construction phase of the project. We view this joint venture project as the first step in a long-term relationship with FPCC, which may provide for future capacity expansions. Moreover, as an integral part of this strategic growth investment at Mailiao, FPCC's petrochemical complex will provide the joint venture with on-site, competitive feedstock inputs, including butadiene, as well as site services and utilities," Fogarty added. "When completed, this investment will provide significant, additional supply capability, and provide a platform to launch a series of new innovative polymers, to serve the impressive growth plans of our Asian and global customers." "FPCC is pleased to form this partnership with Kraton, the global leader in the manufacture of hydrogenated styrenic block co-polymers, which represent a high value segment of a growing specialty polymer of the Asia Pacific markets," said Wilfred Wang, Chairman of FPC. "This joint venture framework is consistent with FPCC's strategy of expanding our portfolio into high value downstream businesses. With FPCC's manufacturing and operations at our Mailiao site providing an excellent infrastructure, feedstocks, utilities and essential services, we have envisaged the success of this win-win deal for both parties."