Shintech, the US subsidiary of Japan’s Shin-Etsu Chemical, has started building the first phase of an integrated VCM/PVC complex at a site next to its existing plant in Plaquemine, Louisiana, USA.

The company has obtained permits to build a facility capable of producing 860,000 t/y of VCM and 660,000 t/y of caustic soda. The first phase, costing $1.49 billion, will raise capacity for PVC by 290,000 t/y and caustic soda by 270,000t/y, taking Shintech’s total capacity to 3.24 million t/y and 1.57 million t/y, respectively. Construction is expected to be complete by the end of 2020.

Ethylene feedstock will be supplied from an ethane cracker that Shintech is building at Plaquemine, which is due on stream in 2019.

The company said that gas feedstock from shale has boosted its competitiveness and it has expanded capacity at Plaquemine three times since completing its integrated PVC complex there in 2008.

Shintech added that it will leverage the advantage of favorable raw material economics in the US to steadily meet increasing demand, both in the US and worldwide, with plans to further increase capacity in a “timely manner.”

According to the Houston-headquartered company, supply of PVC is lagging behind world demand, which reached 43 million t in 2017, and this trend is expected to continue. Similarly, it said, global caustic soda demand, put at 77 million t last year, has been outpacing supply and this too will likely continue.