Asahi Kasei Chemicals, Saudi Basic Industries Corp. (SABIC) and Mitsubishi Corp. have signed an agreement to establish a joint venture to implement a project to produce acrylonitrile (AN) in Saudi Arabia.

The Asahi Kasei Group has identified AN operations as a focus for global expansion through strategic investment of management resources, with the aim of gaining the No. 1 position in the global AN market. Solid demand growth for AN is forecasted to continue worldwide, and Asahi Kasei Chemicals had been considering the construction of a new AN plant to meet rising demand in the Middle East and North Africa as well as to supply Asian markets where there is concern of shortfall.

As such, Asahi Kasei Chemicals advanced study and negotiation with SABIC and Mitsubishi regarding the establishment of a joint AN production base in Saudi Arabia with superior cost-competitiveness. Having concluded todays agreement to establish a joint venture to facilitate concrete preparations for an AN project in Saudi Arabia, the three partners will now begin formulating the basic plant design and advance work on a detailed business plan. A final decision on capital expenditure will be made in 2012.

With its current production capacity of 750,000 tons/year (in Japan and Korea) as well as a new plant in Thailand (start-up scheduled for mid-2011) and in Korea (start-up scheduled for January 2013) the Asahi Kasei Groups AN production capacity will be the largest in the world at some 1.4 million tons/year upon completion of the new plant in Saudi Arabia.

Source: Asahi Kasei