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Shintech, the U.S. polyvinyl chloride (PVC) arm of Japan’s Shin-Etsu Chemical, says it will spend $1.5 billion to expand its vinyl facility in Plaquemine, La.
Next to its existing site in Plaquemine, the company plans to build an 860,000-metric-ton-per-year facility to make the PVC raw material vinyl chloride. It will also build a 600,000-metric-ton chlorine plant and expand a PVC plant by 290,000 metric tons at the location.
Shintech has been investing in the Plaquemine site since the early 2000s, when it opened a pair of PVC plants supplied with vinyl chloride from Dow Chemical. In a series of billion-dollar investments, the company started expanding PVC and back-integrating its facility with vinyl chloride and chlorine capacity of its own. As part of this effort, the company is building a $1.4 billion, 500,000-metric-ton-per-year ethylene cracker, which it expects to complete later this year.
With the completion of this latest expansion project in 2020, Shintech will have a total of 3.2 million metric tons of PVC capacity, solidifying Shin-Etsu’s position as the largest producer of PVC in the world.
“When this new project is in place, Shintech will have invested $6 billion to deliver the largest integrated complex in the U.S. for producing PVC,” says Louisiana Governor John Bel Edwards. Shintech received a tax exemption and other incentives from the state.
The market needs more PVC capacity, according to Mark Eramo, vice president of global chemical business development for the consulting firm IHS Markit. From 2005 to 2012, he says, Chinese producers brought online more than 18 million metric tons of PVC capacity—mostly acetylene-based—making China self-sufficient in the plastic. As a result, there was a “hiatus on major construction” in other regions.
Now the market is getting tight. Plant operating rates globally were in the high-70% range in 2017, IHS says, and should climb to 85% by the end of 2021. “The U.S. Gulf Coast is a good place to build because of low-cost ethylene and low-cost power,” Eramo says.
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