Saudi Basic Industries Corporation or Sabic Tuesday said it had reached agreement with Japan's Mitsui Chemicals to produce two feedstocks required to make polyurethane, days after Japanese media reported the companies were joining forces to make urethane in Saudi Arabia.
Sabic said Tuesday it has signed a license agreement with Japan's Mitsui Chemicals to provide the manufacturing technology for the production of toluene di-isocynate, or TDI, and methylene di-phenyl isocynate, or MDI.
This is a key step in plans the company announced in October 2010 to manufacture polyurethane. It is yet to disclose the cost of the TDI, MDI and polyurethane projects, their capacities or the development timeframe.
Sabic and Mitsui Chemicals are also planning to build a urethane plant in Saudi Arabia, Japan's Nikkei newspaper reported Saturday.
TDI and MDI are used as feedstocks to manufacture urethane molecules, which are then synthesized together to manufacture polyurethane.
The planned urethane plant is likely to have a greater annual capacity than all three of Mitsui Chemicals' facilities in Japan and South Korea combined, which is 427,000 mt/year, Nikkei reported. It would be built over 2015-2020, the report said.
Further details of the agreement between Mitsui Chemicals and Sabic are expected by the end of March, the daily said.
Polyurethane is a resilient, flexible material used widely in paints, metals and rubber.
