PLASTICS CORNER OCCIDENTAL, SOVIETS AGREE ON PVC JOINT VENTURE DEAL

PLASTICS CORNER OCCIDENTAL, SOVIETS AGREE ON PVC JOINT VENTURE DEAL

Occidental Petroleum Corp. on Wednesday signed a joint venture agreement with the Soviet government to build two polyvinyl chloride, or PVC, units at the Kalush Petrochemical complex in the Ukraine, with a combined value of between $160 million and $200 million, according to Armand Hammer, chairman of Occidental.

The agreement, signed by Aleksandr Ustkachkinzev, the first deputy minister of the chemical industry, is contingent on approved feasibility

plans, with a construction start slated for 1989 and production start-up in 1991.The plants, which will be situated near the Czechoslovakian border, are expected to start up in 1991 and 75 percent of the sales are expected to be consumed by the Soviet and Comecon domestic markets. Occidental will take the remaining 25 percent as payment for export conversion to hard currency.

One plant will produce 50,000 metric tons a year of film-grade PVC for food packaging, wall covering, and geotextile applications. The other unit, based on Occidental's Hybrid production process, will produce 40,000 tons of dispersion resins for vinyl flooring, upholstery fabrics and injection molding applications.

Occidental is a major player in the global PVC market, in which there are significant shortages of material. Occidental has some 1.6 billion pounds of PVC capacity in the United States.

The company is also involved in an international joint venture with the Soviet Ministry of Oil Industries and Montedison SpA that is studying the feasibility of constructing a multi-billion dollar petrochemical complex at the Tengiz oil fields near the Caspian Sea. Occidental's interest in this venture revolves around the proposed production of 1 million tons of sulfur.