Petronas Chemicals and PCC to build oxyalkylates plant in Malaysia

PETRONAS Chemicals Group Berhad (PCG; Kuala Lumpur, Malaysia) recently entered into a Shares Sale and Purchase Agreement (SSPA) with PCC SE to acquire 50% of the latter’s shares in its Malaysian subsidiary, PCC Oxyalkylates Malaysia Sdn Bhd (PCC-OM), marking its entry into the growing oxyalkylates market.

Oxyalkylates are a group of chemicals comprising ethoxylates, a non-ionic surfactant, and polyether polyols. These chemicals are used for the manufacture of a wide range of end products. Ethoxylates are used among others, in the production of detergent, home care and personal care products, while polyether polyols are mainly used to produce foam mattresses and upholstery applications. Demand for these two chemicals are expected to grow especially in the South East Asia (SEA) and Asia Pacific regions.

PCC SE, headquartered in Duisburg, Germany, is a global surfactant player with an established know-how gained over several decades in the development and production of surfactants and polyols. It established PCC-OM in 2017 with the intention to expand into the Asian region.

With this acquisition, PCG and PCC SE plan to build an oxyalkylates facility within the Kertih Integrated Petrochemical Complex, Terengganu to produce ethoxylates and polyether polyols. The construction of the facility is targeted to commence in 2021 while production is scheduled to begin in 2023. The partners also intend to establish a joint research and development (R&D) centre at PCC-OM to ensure a high level of innovation and fulfillment of individual customer requirements.

This strategic partnership leverages on the strengths of both companies; PCG as one of the leading integrated chemicals players in SEA and PCC SE with its extensive range of products and chemical formulations serving a large variety of applications. The partnership will enable PCC-OM to deliver high value innovative solutions to customers in the oxyalkylates market in the region.

Elaborating on the acquisition, PCG Managing Director/Chief Executive Officer Datuk Sazali Hamzah said, “This is another milestone for PCG in our quest to develop the Group’s specialty chemicals business segment. We are pleased to be working with PCC SE, a global surfactant player, in our first foray into the specialty oxyalkkylates market, as their experience, expertise and capabilities provide a strategic fit into our growth plans. We will continue to explore investing in more technologies and assets that will further expand our high-value chemicals portfolio, thus future proofing our business.”

Waldemar Preussner, Chairman of the Administrative Board of PCC SE, stated: “Through this joint venture, we are boosting the expansion of PCC’s core businesses of surfactants and polyols in the growing Asian market. The Kertih site is ideal due to raw materials availability and excellent infrastructure with a direct seaport access, thus ensuring competitive production and logistics costs. This project enables us to leverage on the know-how we have gained from decades of oxyalkylates production in our facility and the new R&D centre for customers in Asia will create a pathway for expanding our product portfolio. In PCG we have found a strong strategic partner both for this investment and also for other potential collaborations in the chemical industry.”