“The strong business performance includes improved operating rates for all Titan Chemicals' plants. The olefins plants are operating at 95% this quarter compared to 89% in the same quarter of 2004 and our polyolefins' plants are averaging at 98% this quarter, compared to 91% last year. We have thus exceeded the 90% operating rates industry experts expect in times of strong demand,” Mr Condon further added.
Commenting on industry cyclicality concerns, Mr. Chao quoted industry experts, Chemical Markets Associates Inc (CMAI) who anticipate petrochemical upcycle to last longer on the back of continued economic growth combined with some delays in the completion of planned capacity additions in the Middle East.
In a recent report, Bank of America Securities stated that delays in capacity additions could postpone the next cyclical downturn to at least 2008 or beyond. Half the planned capacity through 2010 in Iran and Saudi Arabia, and two-thirds of those plants may be delayed three months to two years, extending the period of profitability for plastics makers.
Mr Don M Condon, Jr, managing director of Titan Chemicals added, “We believe the strong demand is sustainable and that underscores our expansion plans.”
Titan has already begun engineering and design work for additional propylene production from a metathesis plant which will provide the feedstock for a 130 KTA increase in polypropylene production capacity. In addition to this, Titan isadding a new product – butadiene - from a butadiene extraction unit, the first plant of its kind in Malaysia.
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