Petronas Chemicals Group Bhd will build a RM4.53bil urea fertiliser complex in Sipitang, Sabah with a production capacity of 1.2 million tonnes per annum.
The company said the project, also known as the Sabah Ammonia-Urea plant project (Samur), was conditional upon reaching agreement with the Sabah government on land related matters.
Petronas Chemicals said construction was expected to start in the second quarter of next year with the commissioning of the plant targeted for 2015.
The company currently operates two urea plants - one with a 750,000-tonne capacity in Bintulu, Sarawak and another in Gurun, Kedah with a capacity of 683,000 tonnes and would have a total capacity of 2.6 million tonnes with the completion of the Sipitang plant.
Petronas Chemicals chairman Datuk Wan Zulkiflee Wan Ariffin said it was part of the company’s strategy to grow the fertiliser business as Asia Pacific remained a key market.
“We’re in an advantageous position, as we’ve close proximity to the growth markets in the region. We see sustained demand in the agricultural needs for a growing population with changing food consumption patterns and the competing land utilisation for higher crop yields,” he said in a statement yesterday.
The company’s president cum chief executive officer Dr Abd Hapiz Abdullah said the new fertiliser plant would potentially make Petronas Chemicals the second largest urea producer in the region.
“The Samur project fortifies our position as a major player in the fertiliser business, as we continue to build upon our strengths and market share,” he said.
The project would be undertaken by a special purpose vehicle, the newly acquired Styrene Monomer (M) Sdn Bhd, which would be renamed Petronas Chemicals Fertiliser Sabah Sdn Bhd.
