Octal Petrochemicals opens Middle East's largest PET plant

The new facility has a capacity of 300,000 metric tons per annum, making it the largest PET resin plant of its type in the Middle East and the largest clear rigid PET sheet plant in the world.

Food and consumer packaging markets in the US, Europe and China are Octal's prime targets in 2009. The first orders of PET resin to Europe have been shipped this month, and Octal expects total per annum sales to reach $400m by the end of this year.

Octal's Saudi Arabian co-founder Prince Faisal Al-Sudairi said: "The new plant marks the company's emergence as a global player in PET resin and clear rigid sheet packaging. Our investment delivers dramatically enhanced scale, breakthrough technology, and crucial cost and quality advantages at a time when customers need them most."

Octal has placed an initial raw materials order worth $7m with Saudi Basic Industries Corporation for PTA, a key chemical used in PET manufacture. Octal's annual demand for PTA (purified terephthalic acid) is set to exceed $175m when the new plant ramps up to full capacity in March 2009.

Prince Faisal Al-Sudairi said: "Saudi companies are playing a major role in the expansion of Octal, and we're excited about the level of trade we've already established between the Kingdom and the Sultanate of Oman. We have strategically sourced a large amount of raw materials and packaging systems from Saudi Arabia, and we intend to strengthen relationships with Saudi and Gulf suppliers in 2009."

Other raw materials and equipment orders placed in the region include a contract for mono-ethylene glycol (MEG) worth $60m with MEG Global of Kuwait, and steel contracts with a combined value of $30m with Mammut Industries of the UAE and Kuwait's Kirby International.

In just over two years, Octal has become the largest exporter from the port of Salalah and a growing local employer. Octal uses world-first technology to produce clear rigid PET sheet directly from melted PET resin, delivering significant energy savings and enhancements to the quality and clarity of the final product.

Nicholas Barakat, Octal Managing Director, said: "Our patented DPET technology uses a single-phase reactor to integrate PET resin and sheet manufacture. The technology bypasses the expensive PET drying and melting process of conventional clear rigid sheet manufacture, producing PET sheet with superior optical and mechanical properties and using 65% less energy."

"The new technology involves enhanced gauge control, creating additional cost savings by achieving higher yields. Our production processes also meet stringent environmental standards - we only use recycled municipal wastewater and PET is 100% recyclable."

Octal's integrated PET resin and clear rigid sheet production plant was built at an initial cost of $350m, complementing an existing PET sheet plant opened in Salalah Free Zone in late 2006. Total PET resin capacity is 150,000 metric tons per annum and PET sheet capacity is now 180,000 metric tons per annum.

A second phase of expansion will be completed in early 2011, increasing capacity in PET resin by another 500,000 metric tons. At this stage, Octal will be the largest PET resin company on one site outside China.

Octal's Prince Faisal Al-Sudairi said:

"Phase one is nearing completion and we remain on track with phase two. Despite the global economic challenges, regional investor interest remains strong and the capital is in place to deliver on our stated growth plans."

Worldwide sales of clear rigid PET sheet packaging and PET resins were more than $2.5bn and $15bn respectively in 2006. The segment is experiencing annual growth of between 7-10% in response to retail demand for clear food and consumer goods packaging at the point of sale and the expansion of supermarket chains in developing countries.

"We are seeing a backlog of orders in the US and international markets. Our strategy is to focus on the large volume packaging producers who value maximum gloss and clarity in plastic consumer packaging and enhanced durability."