A joint venture between SK Global Chemical and SABIC (Saudi Arabia Basic Industries Corp.), a petrochemical company with the world's largest ethylene capacity, has finally set sail.
This has been four years and four months since SK Group chairman Chey Tae-won proposed the partnership in March 2011 in order to enter the premium chemical market dominated by global major petrochemical firms based on high-performance polyethylene products using SK's proprietary solution technology "Nexlene."
SK Global Chemical officially established SABIC SK Nexlene Company Pte. Ltd., a 50:50 joint venture with the Saudi company, on June 3. The Singapore-based company has assets worth 710 billion won.
Earlier last month, the Korean company formed Korea Nexlene Company Ltd. (KNC) and incorporated the Nexlene manufacturing plant in Ulsan into KNC in the form of investment in kind. The company in turn put KNC under the control of SABIC SK Nexlene Company as its fully-owned subsidiary. The joint venture will market Nexlene-branded chemical products produced in the Ulsan plant to the world.
Nexlene, the technology developed by SK Innovation, is widely used in diverse industries such as advanced packaging, automotive, healthcare, footwear, and electrical and lighting. SK Innovation recently handed the patent ownership over to SABIC SK Nexlene Company. SABIC is a state-run enterprise with a 70-percent stake held by the Saudi Arabian government. It has the world's largest ethylene capacity of 10.75 million tons a year.
With the establishment of SABIC SK Nexlene Company, SK Global Chemical will step up its marketing effort for Nexlene products. A company official said, "As we joined the worldwide network of SABIC with 40,000 employees in 50 countries, we expect to sell more Nexlene products quickly in the global market. SABIC SK Nexlene Company plans to build a second Nexlene plant in Saudi Arabia following the first one in Ulsan currently in operation.