Saudi Arabia Basic Industries Corp. (SABIC) and South Korea's SK Global Chemical have formed a 50-50 joint venture to produce polyethylene (PE) products, the companies said on Tuesday.

Under the JV deal, SABIC will buy the Nexlene solution technology and a 230,000-tpy plant that manufactures a range of high-performance ethylene and alpha-olefin co-polymers in the city of Olsan, South Korea.

Total investment will be about $640 million for the technology and plant construction, SABIC said. The JV firm, headquartered in Singapore, will be named SABIC SK Nexlene Company (SSNC).

"This is the latest stage in SABIC's global expansion," said Youself Al-Benyan, Sabic's acting vice chairman and CEO. "By growing our presence in Republic of Korea we are opening up new markets globally and reinforcing our position as a global leader."

SABIC says it intends to further expand capacity with the construction and operation of additional plants around the world.

The new technology will offer stronger and tougher plastics to customers, according to company officials.

"The solidification of our partnership with SK Global Chemical will complement our polymers portfolio and enable us to offer a more varied, cost-effective, and customer-focused selection of products," said Abdulrahman Al-Fageeh, executive vice president of polymers at SABIC.