Malaysia’s Hong Seng Consolidated Bhd and Japanese global trading and investment firm Mitsui & Co Ltd’s subsidiary Mitsui & Co (Malaysia) are to form a partnership to set up Hong Seng’s 960 kilotonne/year-nitrile butadiene latex (NBR) plant at Kedah Rubber City in the northern state of Kedah as well as integrated logistics services business in Penang.
Hong Seng said in a bourse filing the intentions of both parties is to engage in exclusive negotiations to form strategic partnerships in relation to a NBR plant and tank farm.
It said Mitsui intends to provide a one-stop supply chain management for feedstock and raw materials of the NBR plant.
Last year, Hong Seng said it has allocated RM3 billion for the expansion of its new NBR plant over the next five years from 2022 onwards. It will complete the project in stages over four phases and the plant will have a total production capacity of 960 kilotonnes/year. The first phase of 240 kilotonnes/year is expected to commence its commercial production by the second quarter 2024.
Hong Seng’s wholly owned subsidiary Hong Seng Industries Sdn Bhd had last year entered into a sublease agreement with the Northern Corridor Implementation Authority to sublease 102.6 acres of industrial land located at Kedah Rubber City for 60 years for the setting up of the NBR manufacturing plant.
In November 2021, Hong Seng’s subsidiary, HS Petchem Sdn Bhd, had accepted the letter of offer issued by Penang Port Sdn Bhd to sublease a 12,140 sq m leasehold land for 20 years, located at Prai Bulk Cargo Terminal, Penang. The group intends to construct a tank farm for the feedstock storage and supply of butadiene and acrylonitrile petrochemicals as well as provisioning of logistics services for the delivery of the said feedstock.
“The LoI will create a mutually exclusive relationship between the parties in order to facilitate direct negotiations for the strategic partnerships. The strategic partnerships further strengthen Mitsui’s market in Malaysia and Hong Seng to leverage on the expertise and global network of Mitsui in the chemical supply industry,” said Hong Seng.