A significant shift is underway in the petrochemical industry as MAK Germany Group relocates a purified terephthalic acid (PTA) and polyethylene terephthalate (PET) production facility from Rotterdam, Netherlands, to the Sohar Port and Freezone in Oman. The , announcement by Indorama Ventures to shutter the Rotterdam plant, originally acquired from Eastman Chemical in , foreshadowed this move, driven by escalating costs in Europe and increasing competition from cheaper imports.
MAK Germany acquired the Rotterdam plant and is now investing $550 million to build an integrated production base in Sohar, with an annual production capacity of 1.5 million tons. The decision reflects a broader trend of capital flight from the European chemical industry, spurred by high energy costs and stringent environmental regulations. This follows a similar move by European chemical startup Vioneo, which abandoned plans for a methanol-to-polyolefin plant in Europe in favor of a project in China on .
The relocation isn’t simply a transfer of existing assets. The existing production facilities in Rotterdam will be entirely dismantled and rebuilt in the Sohar Freezone. This undertaking is strategically supported by OQ Refining and Petroleum Industries Company, a subsidiary of Oman National Oil Company, which will supply para-xylene (PX) – a crucial raw material for PTA production – via a dedicated pipeline. Sohar Port will also facilitate the construction of storage and handling facilities for bulk raw materials, with monoethylene glycol and acetic acid to be imported directly to the plant area via dedicated pipelines.
Hojat Mohammadi Imir, CEO of MAK Germany, stated that relocating production to Sohar reflects our confidence in Oman’s industrial environment.
This confidence is underpinned by Oman’s strategic location and developing industrial infrastructure. The new base is intended to serve as a core supply center for markets in the Middle East, Africa, Asia and Europe.
The closure of the Rotterdam plant in followed a period of increased production at the site, which had ramped up from 190 kilotons per annum (ktpa) to 426 ktpa after Indorama Ventures introduced a second production line. However, elevated production costs and the influx of competitively priced imports ultimately rendered the facility unsustainable in the European market. Indorama Ventures had unveiled its IVL 2.0 strategy
on , to adapt to changing industry conditions, acknowledging the challenges faced in Western markets.
PTA and PET resins are vital components in a wide range of industries, including packaging, polyester fibers, plastic films, textiles, coatings, and advanced materials. The shift in production capacity to Oman is likely to have implications for global supply chains and pricing dynamics within these sectors. The move also highlights the increasing importance of the Middle East as a key hub for petrochemical production, benefiting from lower energy costs and favorable investment climates.
The decision by MAK Germany to invest in Oman aligns with Oman’s Vision , a national strategy focused on economic diversification and industrial development. The Sohar Port and Freezone is positioned as a central component of this vision, attracting foreign investment and fostering growth in key sectors like petrochemicals. The project represents a significant contract win for Sohar, combining port logistics, freezone manufacturing, and long-term feedstock supply under a multi-party agreement.
The broader implications of this relocation extend beyond the immediate players involved. The trend of European chemical companies shifting production to regions with lower costs and more favorable regulatory environments is expected to continue, potentially leading to further job losses and industrial decline in Europe. The situation underscores the competitive pressures facing the European chemical industry and the need for policy interventions to address issues such as energy costs and environmental regulations.
