As part of its strategic business plan to penetrate the global polyurethane business, Sabic (Riyadh / Saudi Arabia; www.sabic.com) on 26 February signed a TDI and MDI technology license agreement with Mitsui Chemicals (Tokyo / Japan; www.mitsuichem.com). As part of the agreement, Mitsui will provide Sabic with TDI and MDI manufacturing technology and jointly the two companies will further develop technology for the key PU starting materials.

Welcoming the deal, Sabic CEO Mohamed Al-Mady said it would not only provide a competitive advantage for customers in the long-term, but also “enable a fast development of PU application industries in Saudi Arabia, especially with regards to thermal insulation which will contribute to employment creation as well as energy savings.” Mitsui CEO Toshikazu Tanaka said the agreement was “the largest and most extensive one we have ever made,” adding that he hoped it would be just a first step in a future business partnership between the two groups. According to Mitsui, the new plant will be located in Al-Jubail / Saudi Arabia and is scheduled for start-up in 2016. Exact capacities remain unknown.

The Japanese company said its rationale behind the agreement was to establish a strategic supply of competitive MDI/TDI using the region's low-cost raw materials. In the wake of the deal, Mitsui said it would restructure its PU business. Specifically, the group has decided to cease all polypropylene glycol (PPG) production in at Chiba Polyol Corporation – a 90% group subsidiary – by June this year. Currently, Chiba Polyol turns out 28,000 t/y of PPG. Mitsui also said it would optimise TDI/MDI production at its existing facilities – both in Japan and abroad – adding that it expects the overseas plants to become its main supply bases.