Octal to add 500,000 tons per annum of PET Capacity

Oman-based Octal Holding and Co. SAOC will add 500,000 metric tons per annum (tpa) of production capacity in PET resins by May 2010, making it one of the world's largest polyester producers with 800,000 metric tons of annual capacity.

Octal chairman Saad Suhail Bahwan said the company's second-phase expansion will make it the largest polyester manufacturer in the Middle East and one of the biggest outside of China on one site.

Octal's integrated PET resin and APET sheet facility in the city of Salalah in southeast Oman will ramp up increase the new production capacity in two stages: 250,000 tpa by March 2010 and the remaining 250,000 tpa by May of that year. The company is targeting the soft drink and bottled water markets in Europe, the U.S. and Middle East through its move into PET.

- Between 2009 and 2012, more than 20 million metric tons of plastic raw materials capacity will come on-stream in the Gulf - said Saad. - Octal is harnessing the region's strategic advantage and Salalah's unique location to deliver major growth in PET resin production for export as well as significant cost savings through our integrated, one-site operational model.

- Octal is fulfilling its expansion strategy to become a homegrown global petrochemicals leader. Phase one saw our entry into APET sheet for global export. Phase two will be a major step forward in PET resin production, and phase three will complete the integration of our state-of-the-art facility, realising unprecedented cost and quality advantages - he adds.

Speaking at the Oman Economic Forum in Muscat yesterday, Octal managing director Nicholas Barakat said: - Preliminary funding for phase two is already in place. Around US$18 million has been allocated for long-lead items and engineering work.

Fluor Corporation has been retained as technical advisor for the expansion and is preparing bid packages for the construction. BankMuscat will continue to serve as financial advisor.

- Octal is progressing towards the goal set at its outset in 2005 to become the largest and lowest-cost polyester company in the Middle East, a region where the key raw materials for PET are readily available - confirmed Mag Fouad, vice president of technology at Fluor.

Octal's phase-one facility is nearing completion and will produce 150,000 tpa of PET by the end of 2008. By that time, the plant's total combined production capacity of PET and APET sheet will have reached 330,000 tpa.

- The infrastructure for the second phase, thanks to the Ministry of Commerce and Industry and Salalah Free Zone, is now ready. The first MEG tank of the liquid chemicals terminal is complete, water treatment facilities are in place, and we have secured the environmental permits for the capacity increase -explained Barakat.

Based at Salalah Free Zone, Octal Petrochemicals' integrated PET (polyethylene terephthalate) and APET (amorphous polyethylene terephthalate) production plant is being built at an initial cost of US$300 million. Total investment on the site is set to rise to as much as US$1 billion upon completion. Global export sales capacity is expected to reach US$500 million by the end of this year and net exports will reach US$1.1 billion with the completion of phase three.

- We are proud of our association with Octal's project and emphasise the free zone's commitment to its customers and growth plans - said Awadh Alshanfari, chief executive officer of Salalah Free Zone Company SAOC. - Octal's project is an important milestone for the free zone as it establishes itself as a major hub for global trade.

Octal Holding and Co. SAOC, established in 2006, is rapidly becoming the world's largest producer of APET sheet, delivering to the packaging industry superior gauge control, gloss and transparency for rigid plastic packages. It is also becoming the Middle East's largest producer of PET resins. Octal's APET sheet provides higher yield, better tray quality and lower cost. With state-of-the-art manufacturing based in the Salalah Free Zone, Oman, Octal has sales and customer support facilities in the United States, Europe and Asia.