Propilco looks to hike polypropylene output

Thursday, December 21, 2006

Colombian polypropylene company Propilco plans to invest roughly US$100mn to boost its production from 380,000t/y to as much as 500,000t/y, newspaper Portafolio reported.

In 2007 the company will spend US$47mn to build a purifier to increase the quality of the propylene fed to its polypropylene plants as a raw material, the reports said. This propylene comes from refineries in Cartagena and Barrancabermeja.

The firm, owned by the Sanford group, the Santo Domingo group and the Zapata family, also will spend US$5mn to raise capacity at its Unipol plant in Cartagena on the Caribbean coast by 20,000t/y to 220,000t/y, according to the reports.

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Also on the agenda is a US$6.7mn investment to boost the capacity of the Novelen plant in the same city by 30,000t/y to 210,000t/y, the newspaper said.

This expansion will require a greater supply of propylene. As such, state oil firm Ecopetrol will begin providing 25% of Propilco's needs starting in July 2007 and the level may be hiked to 50% in the medium term, the reports said.

"This project represents greater revenues for Ecopetrol, reduces imports of propylene and lowers the vulnerability of Propilco in the international market by having a sustained supply of raw materials from a domestic source," the paper quoted Propilco president Orlando Cabrales as saying.

The company also is preparing to begin feasibility studies in 2007 for further expansion of its two polypropylene plants. These works would cost around US$40mn and would raise production at the Unipol facility by 30,000t/y and by 40,000t/y at the Novelen plant.

Propilco officials were not available to provide further details of the expansion projects when contacted by BNamericas.

Polypropylene is an important thermoplastic used in a wide range of applications, including auto parts, pipes, bottles, fibers, housewares and toys.