Slovnaft launches construction of a new polyethylene production unit

Costs for construction of the LDPE 4 production line itself exceed EUR 200 million, while another EUR 100 million will be required to renovate an ethylene unit for processing primarily petrol and gases, from which raw materials will be produced mainly for manufacturing polyethylene and polypropylene, and to develop an associated logistics infrastructure in the form of an ethylene storage tank, silos for storing polyethylene and packing lines. Slovnaft will be financing these investments from a combination of its own funds, loans from the EBRD and commercial loans.

“We expect the new line to streamline production and reduce both energy consumption and emissions, while allowing us through a broader and higher-quality product portfolio to reach new customers and markets. This investment strengthens Slovnaft’s competitiveness in the long term and ultimately brings a lot of direct and indirect positives for all of Slovakia,” said Oszkár Világi, Chairman of the Board of Directors and CEO in SLOVNAFT, a.s.

The new LDPE4 unit replaces seven older lines and will produce low density polyethylene. This is the basis for a wide range of products, such as food and agricultural plastic wrapping, toys, health supplies, insulation and other materials used in construction. The manufacturing process results in granulates that are then further processed by customers. Once the new line starts operating, annual polyethylene production capacity will rise by 40,000 tonnes to reach 220,000 tonnes.

“This key investment contributes to our growth strategy offering both Slovnaft and MOL Group the opportunity to further strengthen our competitiveness and to maintain a leadership position on the Central European market. This investment is a proof that we are investing in our member companies in order to ensure our long-term global success.” said Zsolt Hernádi, MOL Chairman-CEO.

Slovnaft’s polyethylene production plant is being put together by a consortium of associated companies, Tecnimont in Italy and Tecnimont Planung und Industrieanlagenbau in Germany, both subsidiaries of Maire Tecnimont SpA, the holding company of Maire Tecnimont Group, a leading international player in Engineering & Construction (E&C), Technology & Licensing and Energy & Ventures, mainly active in the Hydrocarbons industry.

Pierroberto Folgiero, CEO of Maire Tecnimont, said: “With this project we confirm our outstanding experience in Petrochemicals Industry being Tecnimont part of the history of the polyolefin technologies and further strengthen our

presence in Central and Eastern Europe, where we are focusing our attention to support the development of Petrochemical as well as Fertilizer industries, leveraging on Maire Tecnimont Group’s know-how and proprietary technologies. In this view, we are proud to be one of the key actors in the most relevant investment in the region.”

The logistics infrastructure is to be built by TALKE. The Germany based company is one of the world’s leading logistics service and logistics consultancy providers to the chemical and petrochemical sector in Europe, the Gulf States and Asia. “This logistics facility is the first project that we will carry out in Slovakia,” says Christoph Grunert, Director Logistics Europe at TALKE. “It is also one of our biggest European construction projects to date.”

Construction of the LDPE4 unit will have a positive impact on employment in the region. It is expected that by the time work peaks, up to 1,000 people will be employed by construction project suppliers.