Group In the variety Is expected to invest $ 170-240 million between 2022-2030 in its polymer (raw materials for plastics) sector. This emerges from a presentation published by the company this week.
This is part of Bazan’s strategic plan, which includes investments totaling $ 400 million from 2022 to the end of 2030. According to Bazan, investments in the polymer sector are expected to yield an additional $ 50-77 million in EBITDA (profit before financing expenses, depreciation tax and depreciation ) And most of them will be made in the field of green polymers (recycled and biodegradable).
Bazen’s polymer sector is led by its subsidiary Carmel Olefins (CAO) and also includes Dokor, located in the port of Rotterdam in the Netherlands. According to Bazen, it is a strategic location in the heart of the global circular economy arena.
The planned investments in the polymer sector are expected to help Kaul and the Zen Group meet the challenging strategic goals set by the group for itself – production of at least 15% green polymers by 2025 and 30% by 2030.
The total investment in the polymer segment will be concentrated in three growth engines: deepening the grip on the polymer market in Israel, growth in the field of plastics recycling and innovation in the field of biopolymers. About $ 20 million will be invested by 2030 in order to deepen the grip on the polymer market in Israel, with this investment expected to yield an additional $ 5-10 million to annual EBITDA.
In the field of plastic recycling, the group will invest $ 140-200 million, which it estimates is expected to add $ 50-60 million to the annual EBITDA. About $ 20 million will be invested in biopolymer innovation to develop and locate leading technologies with great growth potential while minimizing investment risks.
The two initial buds of these investments were the agreement with UBQ and Melodea. In the first agreement, UBQ will incorporate recycled waste within a coal-reduced product line of CAOL intended for the plastics industry in Israel and Europe.
As part of the second agreement, Zen invested about $ 4 million in the Israeli company Melodea and its plant in Arad in a product development and marketing agreement. Melodea has developed a packaging coating material, extracted from wood pulp (CNC), which has unique biopolymer properties.
Commercial production of the material is expected to begin in 2022 and is intended to replace or integrate with the use of parallel petroleum-based materials, as well as aluminum coatings as a coating layer for flexible packaging such as washing powder and animal feed.
Kaul currently operates in the polypropylene market and the low-density polyethylene market (LDPE). The annual demand in the global polypropylene market is estimated at about 80 million tons with a growth expectation of about 80% by 2040. The annual demand in the global polyethylene (LDPE) market is estimated at about 25 Million tons with a growth expectation of about 50% by 2040. The demand in Israel for these polymers is currently estimated at about 550,000 tons with a growth expectation of about 45% by 2040.
The polymer sector (OWL and Acor) has a maximum potential annual production capacity estimated at 630,000 tons of polypropylene and 170,000 polyethylene (LDPE). The Group’s EBITDA The average annual EBITDA of the segment for the years 2015-2019 is approximately $ 190 million.