Saudi Basic Industries Corp (SABIC) said on Monday it has signed a letter of intent with Japan's Mitsubishi Rayon to set up a joint venture with an estimated cost of $1 billion.The plant would produce 250,000 tonnes per year of methyl methacrylate (MMA) monomers and is expected to start production in 2013, SABIC said in a statement on the bourse website.
MMA is used in the production of acrylic resins needed for products ranging from liquid crystal displays and car lights to aquariums.
Japan's business newspaper Nikkei said on Friday Mitsubishi Rayon plans to set up a joint venture with SABIC in Saudi Arabia to produce a material used for acrylic glass.
Mitsubishi Rayon is likely to take a majority stake in the joint venture and expected to spend more than 50 billion yen ($514 million) on the project, the newspaper said.
Prior to the establishment of the joint venture, SABIC is expected to take a 10-20 percent stake in Lucite International. Mitsubishi Rayon bought the British chemical maker for $1.6 billion in May, the paper said.
Last month, SABIC said it would raise its petrochemicals output by about 12 million tonnes by the start of 2012 after it posted a 76 percent drop in second-quarter profit due to a sharp fall in in petrochemicals and metals prices, reports Reuters.