Hungarian refiner Mol Nyrt inaugurated its $1.4 billion polyol plant, describing the ability as a long-term funding that can trip out an initially unfavorable market.
The plant within the jap Hungarian city of Tiszaujvaros is a key a part of the refiner’s deliberate pivot away from oil processing towards petrochemicals manufacturing. Although the chemical substances business has seen a interval of lackluster margins within the face of stalling economies and excessive vitality costs, Mol stated the mission will show its price as the worldwide economic system begins to choose up.
“The present market just isn’t useful for opening the plant, the financial downturn just isn’t serving to,” Peter Csaszar, senior vp for chemical substances at Mol stated late Monday on the firm’s Budapest headquarters. “However this funding is for the long term.”
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The long-delayed plant is because of ramp as much as over three years to supply 200,000 tons yearly of the plastic uncooked materials utilized in versatile and inflexible foams, unsaturated polyester resin, and private care merchandise. The plant may also make 70,000 tons of propylene glycol.
“The place the present cycle is, is mainly irrelevant,” Krisztian Pulay, senior vp downstream manufacturing and growth stated on the Budapest briefing. “It could be higher to catch an up-cycle interval or the highest, however there’s often little probability for that within the chemical substances business. This plant just isn’t constructed to run for 5 years, however for many years.”
Key markets for tender foam embrace Poland, Turkey and Hungary, that are lower-margin, however larger-volume areas. There may be additionally demand for higher-margin inflexible foam merchandise in western Europe. As soon as it achieves full manufacturing, Mol estimates that the plant could be the fifth largest within the 1.6 million-tons-a-year European market.
“The sector as a complete is within the doldrums, petrochemical margins are low and we don’t anticipate that to vary anytime quickly,” stated Jonathan Lamb, an analyst at Wooden & Co. Monetary Companies. “Nevertheless, polyol is a higher-quality product, and it’s good that Mol is beginning manufacturing and generates money, given all of the capital expenditure spent on it to this point.”
