On January 27, German chemical company MAK Group officially signed an agreement with Oman's Sohar Port and Freezone to invest $5.5 billion in building an integrated production base in the region. The facility will specialize in producing purified terephthalic acid (PTA) and polyethylene terephthalate (PET), marking a significant step in the company's strategy to shift its European production capacity to the Middle East. Previously, MAK Group had acquired a related plant from Indorama Ventures at the Port of Rotterdam in the Netherlands, which was shut down in 2024 due to high operational costs. Under the newly signed agreement, MAK will relocate its existing PTA and PET production facilities from the Port of Rotterdam to the Sohar Freezone in Oman. Once operational, the project is expected to achieve an annual total production capacity of 1.5 million tons.
The project is supported by a well-established supply chain and logistics infrastructure. Oman's OQ Refining and Petroleum Industries Company will supply para-xylene, a key raw material for PTA production, to the base via dedicated pipelines. Sohar Port will handle bulk cargo storage, raw material processing, and pipeline transportation. Other raw materials, such as monoethylene glycol and acetic acid, will be imported through the port and transported directly to the production site via dedicated pipelines, ensuring efficient end-to-end logistics.
MAK Group stated that once the new production base in Oman is operational, the PTA and PET resin products will serve multiple global markets, including the Middle East, Africa, Asia, and Europe. Leveraging Sohar Port's strategic location and logistics advantages, the company aims to enhance its product supply capabilities.
This capacity transfer by MAK is a typical example of capital outflow in Europe's chemical industry. Currently, domestic capital expenditure in the European chemical sector continues to shrink, with local plants shutting down one after another, and new investments increasingly flowing to regions outside Europe that offer cost and industrial advantages. On January 16, European chemical startup Vioneo also announced its decision to abandon plans to build a 300,000-ton-per-year green methanol-to-polyolefin plant in Europe, opting instead to locate a similar project in China. This further highlights the trend of investment shifting away from Europe's chemical industry.
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