SK, SABIC form venture

SK Innovation Vice Chairman Koo Ja-young, left, and SABIC Vice Chairman Mohamed Al-Mady shake hands on Monday in Seoul. Provided by the company

SK Global Chemical said yesterday that it will establish a joint venture with Saudi Basic Industries Corp., (SABIC) in a bid to expand its presence in the global high-performance polyethylene market.

The company, which is wholly-owned by SK Innovation, said that it signed an agreement with SABIC on Monday in Seoul to establish the headquarters of its 50-50 joint venture in Singapore within the year. More than 20 guests, including SK Innovation Vice Chairman Koo Ja-young and SABIC Vice Chairman Mohamed Al-Mady were at the signing ceremony.

The joint venture aims to utilize “Nexlene,” a proprietary brand of SK Global Chemical that it developed in 2010 and uses in its high-performance plastic products. Nexlene has a wide range of applications, including films, auto parts, inner lining for shoes and cable coverings.

This is the first time that SABIC has invested in Korea by partnering with a Korean petrochemical company, though the company has sales offices, technology application centers and a compounding plant in the country. The state-run Saudi Arabian corporation is the world’s largest ethylene producer.

SK Global Chemical began production this month at its recently constructed Nexlene plant in it’s Ulsan complex.

The joint venture will also build a Nexlene plant in Saudi Arabia, the company added. The company is aiming to have annual global production of about 1 million tons by 2020.

The joint venture will establish a R&D unit to continuously develop Nexlene technology to boost its competitiveness. The high-performance polyethylene product is currently produced by only a few companies such as Dow and Exxon Mobile.

BY joo kyung-don [kjoo@joongang.co.kr]