Leveraging its expanded position in ethylene, Ineos Oxide has announced it will build a new plant for vinyl acetate monomer (VAM) at one of its European production sites. The investment is said to reflect “briskly growing demand” for the PVC feedstock in the region.

The new facility, which according to Ineos Oxide CEO, Graham Beesley, is designed to help reduce the market’s current dependence on imports, would be located at one of the Ineos group’s integrated European sites. Choices include Saltend, Hull, in the UK and Cologne in Germany, as well as Antwerp, Belgium.

Beesley told UK media that a final decision on the investment will be taken next year, with production earmarked to start up in 2020. No price tag has been put on the projected investment as yet.

While an engineering study currently in progress will help determine the location, the Ineos Oxide chief said each of the sites under consideration is well positioned to supply the market efficiently, either benefiting either from a pipeline or a terminal to provide ethylene feedstock. Cost logistics for the other key raw material, acetic acid, will be another determining factor.

With the new plant, Ineos will reenter the VAM market four years after closing its plant at Saltend in late 2013, a time when cheaper imports from low-cost production sites in Saudi Arabia and the US were flooding the European market. The advantage of investing at Saltend would be the presence of a mothballed facility that could be revamped, the group has suggested.

According to market research, the loss of the output from Saltend – which Ineos said at the time was not competitive, reduced European VAM output by half and forced consumers to source product abroad.

“We are pleased to be reentering the European VAM market where our upstream strength in ethylene and an array of top-notch strategic locations to choose from will give us a competitive advantage,” said Beesley. “The market is at present heavily reliant on imports from deep-sea locations, and our new capacity is designed to plug the gap and improve supply dependability to our customer base.”

The executive added that the plans for the new VAM plant dovetail nicely with Ineos’ ongoing ethylene debottlenecking scheme, which will increase output of crackers at plants at Grangemouth, UK and Rafnes, Norway by as much as 900,000 t/y. The fundamental reason for the decision to reenter the market, Beesley said, is the group’s investment in shale gas-derived ethane, which has made ethylene production more competitive.