Oman plays strategic role in PET production

By Zainab Mansoor

Polyethylene terephthalate (PET) invariably makes up an important part of everybody's lives with clear plastic bottles and food/beverage containers being the most common application. The demand for PET globally soared to 15.3 million tonnes while projected annual rise in global PET demand until 2020 is estimated at 5%. With state companies and governments keen to diversify their economies and focus on peripheral industries, it is only logical that petrochemical producers and industrialists are encouraged to set up PET plants or moving towards PET production to meet the growing demand of local industries. However, challenges exist too. Recent import duties imposed by the European Union on PET from Iran, Pakistan and the United Arab Emirates may impact on revenues of PET exporters in the region.

A thermoplastic polymer resin, part of the polyester family, PET, is used in the manufacture of synthetic fibres and packaging of carbonated soft drinks, mineral water bottles and other clear plastic bottles. Peripherally, it is also used in the packaging of food and consumer electronics and for industrial fibre production. Plastic bottles made from PET are excellent barrier materials and are widely consumed for soft drinks while for certain bottles with specific product specifications, an additional polyvinyl alcohol component can be added to reduce its oxygen permeability.

PET growth in the region

With industries and state sponsors keen on investing fast and hard in PET production capacities, a number of private equity firms and refiners are holding the same thought. While Abu Dhabi National Chemicals Co. (Chemaweyaat) and Abu Dhabi Basic Industries Co. (ADBIC) have both considered PTA and PET production, Indorama Ventures Plc (IVL), the world's largest producer of PET resins, is on its way to building two new plants in India and the Middle East with a combined investment of $1.2 billion.

On the other hand, Oman-based OCTAL Petrochemicals, the world's largest producer of PET sheets, opened a 400,000 metric tonne (m/t) capacity PET resins and sheet packaging facility in Salalah in January 2009. Going ahead with the second phase of its expansion, the company plans to add an additional 527,000 m/t of production, which will help OCTAL achieve $1.5 billion sales by 2012. This will also make OCTAL the world's largest producer of PET resins on one site and ultimately, the largest PET manufacturer in the world.

OCTAL is a predominant producer of PET resin and PET sheets; it delivers the most consistent and finest quality of PET sheets enabling thermoformers and retail partners to have packaging products which hold a clear finish and high mechanical properties. It also the first company ever to deploy a two-stage reactor system to produce PET resin from two reactors and use technology that allows for the production of PET resins and sheets in a single process. OCTAL's DPET? is the first and only direct-to-sheet polyester sheet using unique technology which successfully eliminates five energy intensive stages of the conventional sheet production process (pelletiser, SSP, compactor, dryer and extruder).

Although the company services the beverage and packaging industry, it is keener to focus on the packaging and textile sector where it holds considerable potential. Additionally, the Middle East has substantial demand for PET and its related products. Currently, there are only four PET facilities in the region - located in Oman, Iran, UAE and Saudi Arabia - while the Middle East and African demand for PET is the second fastest growing after that of Asia.

Mr. Nicholas P. Barakat, Managing Director, OCTAL said: "The Middle East provides significant potential for PET demand and raw material supply. According to PCI, an industry advisory group, the consumption of PET in the Middle East will grow by 47.9% over 2010-2015 to 2.3 million metric tonnRunners Alliance