LyondellBasell has increased its fixed-cost reduction target to $700 million by the end of 2010. The new target is part of a total performance improvement plan of $1.3 billion, which also encompasses variable and energy cost reductions, as well as revenue enhancement initiatives. The plan also includes a reduction in employee headcount of more than 3,000 and a reduction of contractors approaching 2,000. It includes the closure of 20 offices and research and development sites as well as the closure of 10 or more manufacturing plants, most of which have been announced or completed.
Oil Complex Startup
Sumitomo Chemical Co.’s oil refinery and petrochemical complex has started full operations in Rabigh, Saudi Arabia. The company’s total investment was more than one trillion yen. Sumitomo Chemical and Saudi Arabian Oil Co. each have a stake of 37.5 percent in the complex, with the remaining 25 percent held by other investors. The complex will produce 1.3 million tons of ethylene/year for use in the production of plastics for exports to China and other Asian markets.
Saudi Arabian Oil Co. and Sumitomo are close to signing an agreement to expand their Rabigh, Saudi Arabia refinery and petrochemicals project. The refinery currently serves as a 400,000 barrels/day crude topping facility, with main products being fuel oil, naphtha and jet fuel/kerosene.
Abu Dhabi Gas Industries Co. (Gasco) will significantly boost its capacity to produce natural gas and related products by 2014. The unit’s current production capacity of 3 billion standard cubic feet/day of pipeline natural gas will increase by about 25 percent. Gasco will distribute methane domestically using a high-pressure gas pipeline network supplying power and desalination plants as well as other industries in Abu Dhabi.
The Linde Group has been awarded a contract with Syncope Sichuan Vinylon Works (SVW) to jointly build gas plants and produce industrial gases for the long-term supply to SVW’s chemical complex. The initial investment in this collaboration is approximately 50 million Euros. In the first phase of development under this joint venture, a new air separation plant with a capacity of 1,500 tons/day of oxygen will be constructed to produce and supply gases by 2011. In the long-term, the joint venture is intended to expand the capacities of air gases and also construct synthetic gas (HyCO) plants to meet the overall gases demand by SVW and its associated companies.
Joint Venture Closure
Sumitomo Chemical Co. and Mitsui Chemicals Inc. will shut their polystyrene joint venture due to a sharp fall in domestic demand. The fifty-fifty joint venture, Japan Polystyrene Inc., will be dissolved after halting operations at its two plants in September.
Merck KGaA will curb pigment production in Germany, the U.S., Japan and China. The company said it would put about 500 German pigment workers on shorter hours at the Gernsheim facility near Frankfurt. Other pigment production sites at Savannah, Georgia; Onahama, Japan; and Songjiang, China will also be affected.