Malaysia's Petronas and LG Chem to Set Up Nitrile Butadiene Latex Plant

  • 2020-08-26 12:00:00
  • Reporter

Through its chemicals arm, Malaysia’s state-owned energy giant, Petronas (Petroliam Nasional) has signed an agreement with South Korean chemical giant LG Chem, to set up a manufacturing facility in Malaysia. The strategic partnership will be between the Petronas Chemicals Group Bhd (PCG) and LG Chem. The plant will produce a key ingredient for the manufacture of synthetic rubber gloves- nitrile butadiene latex. 

No investment values were disclosed. 

The country is a global leader in the rubber glove industry, accounting for about 65% of the world rubber glove market, which has been experiencing soaring demand since the outbreak of the coronavirus pandemic. 

Construction of the plant will begin in 2021 at Petronas' petrochemical complex in at the Pengerang Integrated Complex (PIC) in the state of Johor, in southern Malaysia, according to a Bernama report. The manufacturing plant is expected to start production in 2023 and will have an initial production capacity of 200,000 tons of nitrile butadiene latex per year. The plant will offer various grades and new applications of butadiene latex, as well as develop high-value-added products.  

In light of the steady rise in global nitrile glove demand, Petronas Chemicals says the partnership with LG Chem is timely. The venture will help create new revenue streams and open up new markets. Nitrile rubber glove demand is growing at more than 10% a year on average and nitrile gloves are expected to account for 70% of the total latex glove market in 2024.  

Commenting on the plans, Petronas Chemicals Managing Director and CEO, Sazali Hamzah, said the partnership marked a strategic step in developing the group’s specialty chemicals portfolio and confirming its position as a leading integrated chemicals producer in Malaysia. "It provides a compelling entry point into the growing nitrile butadiene latex-based products and enables Petronas Chemicals to enhance its presence in attractive end-markets, especially for personal care and healthcare, mainly in the Asia-Pacific region.” He added that PCG is moving into segments with higher growth potential and more specialty chemicals in its portfolio. 

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