Daelim Industrial to set up first offshore polybutene plant in Saudi Arabia

South Korean construction and chemical firm, Daelim Industrial Company plans on building and operating a polybutene plant in Saudi Arabia, its first manufacturing outpost overseas.

The plant would be part of a mega petrochemical complex currently under construction by state oil giant Saudi Aramco and French oil major Total SA in Saudi Arabia’s Jubail Industrial City.

The factory is scheduled to start construction in 2022 and enter commercial operation from 2024. The financial terms of the deal were not disclosed.

Daelim Industrial plans to build and run a plant that can generate 80,000 tons of polybutene a year. When the Saudi plant is completed, Daelim Industrial would boast a polybutene capacity of 330,000 tons a year and a global market share of more than 35 percent.

“The latest investment is a move to secure a production base in Saudi Arabia and branch out to Europe and Asia,” said a company official.

Polybutene is a high value-added chemical product resistant to heat, sunlight and moisture and has a wide range of industrial applications, including automobile engine oil and additives of fuel and lubricants. The global polybutene market is estimated to be around 1 million tons.

The Korean company started producing mass polybutene from 1993 and succeeded in making highly reactive polybutene in 2010. It is the only company in the world with patented technology to produce both types of polybutene in a single plant.

In 2015, the company exported its patented polybutene production technology to Lubrizol, a U.S. maker of specialty chemicals, and gained the exclusive rights to sell Lubrizol-made polybutene.

It currently runs a polybutene plant in Yeosu, a southern coastal city in South Korea, with plans to bump up its annual capacity from 200,000 tons to 250,000 tons.