Major petrochemical firm Showa Denko K.K. said Thursday it has agreed with a Malaysian subsidiary of the BP Amoco PLC group on long-term purchases of acetic acid, which is used in polyester fibers.
Under the accord with BP Petronas Acetyls Sdn Bhd, Showa Denko will purchase 120,000 tons of acetic acid annually to be manufactured at the BPPA plant in Kertih, Malaysia, the company said.
The quantity is 30 percent of the plant's annual output. Showa Denko will sell part of the chemical directly to customers in Asia and use the rest as raw material at its own plants producing ethyl acetate and other chemicals.
The deal is part of Showa Denko's medium-term business strategy of emphasizing acetyis products, such as acetic acid, vinyl acetate and ethyl acetate, the company said.
Demand is growing for acetic acid on the global market.
BPPA is 70 percent-owned by BP Holdings International BV, a Dutch unit of the BP Amoco group, with the remainder owned by Petroliam Nasional Bhd, Malaysia's government-owned oil company.