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Advanced Petrochemical Co. has signed a long-term off-take agreement with US-based Vinmar International Ltd. for the sale of polypropylene.
The agreement will be effective for a period of five years from Jan. 1, 2019, after the current marketing agreement expires on Dec. 31, 2018, the company said in a bourse statement on Thursday.
The deal covers 175,000 metric tons of polypropylene for the year 2019, 144,000 metric tons per annum for the year 2020 through to 2023.
The contract will impact financial results for the years 2019 through 2023, based on prevailing market prices at that time, the petrochemicals producer added.
“Securing a long-term off-take commitment from a renowned and experienced off-taker like Vinmar will help to achieve the company's long-term strategic plans,” Advanced chairman Khalifa Al-Mulhem said in the statement.
The deal will also improve profitability of the company, due to improved marketing fees and better terms and conditions.
Advanced had earlier signed long-term off-take agreements with Japan’s Mitsubishi Corporation (150,000 metric ton per annum) and Belgium’s Domo Investment Group (100,000 metric ton per annum) that will be effective from Jan. 1, 2019 for a period of ten years.
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