Saudi Basic Industries Corporation (Sabic) will supply South Korean polyester manufacturer Huvis with 200,000 tonnes per year (tpy) of mono-ethylene glycol (Meg), following an agreement the two companies recently signed in Seoul.

The supply represents 53 per cent of Huvis' estimated Meg requirement of 380,000 tpy and will make the Korean company one of Sabic's largest international customers.

Huvis, South Korea's largest manufacturer of polyester products, was created last year by merging the polyester divisions of SK Chemical Inc and Samyang Corporation. Sabic vice-chairman and managing director Mohammed Al Mady said the sales agreement was a result of Sabic's constant efforts to develop and expand its marketing operations and strengthen competitiveness in the global market. The agreement would strengthen Sabic's presence in Asia, particularly in the Korean market, he added.

"Sabic is proud that Huvis has selected us to supply a major portion of its Meg requirement, and we look forward to increased co-operation in the future based on Sabic's quality products and increased production capacity," said Al Mady.

The Saudi giant supplies 1.5 million tpy of Meg to world markets. Sabic's two Meg-manufacturing affiliates in Saudi Arabia - Sharq (Eastern Petrochemical Company) and Yanpet (Saudi Yanbu Petrochemical Company) - have a combined production capacity of 2.3 million tpy, which is around 20 per cent of global demand. Sabic markets 65 per cent of this output and the rest is marketed through joint venture partners in these companies, SPDC (Saudi Petrochemical Development Company) of Japan and Exxon Mobil. Sharq, based in Jubail Industrial City, is the largest single-complex producer of ethylene glycol in the world, with three production plants and a capacity of more than 1.4 million tpy. A 50-50 joint venture between Sabic and SPDC, a Japanese consortium, Sharq has more than tripled its ethylene glycol production capacity through expansion projects since coming on stream in 1985. Yanpet, based in Yanbu Industrial City, completed a major expansion project last year, doubling its ethylene glycol production capacity to 840,000 tpy. A 50-50 joint venture between Sabic and Exxon /Mobil, Yanpet is one of the world's largest petrochemical complexes in the world with a diverse product portfolio of ethylene, ethylene glycol, polyethylenes, polypropylene and pyrolysis gasoline. Sabic's sixth ethylene glycol plant will be built by its newly formed affiliate, Jubail United Petrochemical Company (United), which is expected to be on stream in the first half of 2004. The EG plant at United will have a capacity of 460,000 tpy. Sabic is also studying plans to build its seventh EG plant by 2005, which will have a capacity of 500,000 tpy. Ethylene glycol is mainly used in the production of polyesters and anti-freeze solutions but has also other downstream applications.

Sabic, meanwhile, announced it earned a net profit of SR724 million ($193 million) for the first quarter of 2001 compared with last year's fourth quarter earnings of SR629 million ($167.7 million) and first quarter profit of SR924 million ($246.3 million). Al Mady said sales increased 35 per cent over the corresponding period last year to SR7.7 billion ($2.05 billion). Total production increased by 17 per cent over the first quarter of last year to 8 million tonnes and sales tonnage increased 19 per cent to 7.1 million.