Indeed, the company is keen to point out that the factory will be dedicated to the high end of the market.
"I would like to stress that M&G's new plant is not aimed at the commodity PET market," said Marco Ghisolfi, chief executive of M&G's polymers business unit.
"I remain convinced that the commodity PET market is over-supplied and in need of rationalisation; a situation in which one would not expect to justify re-investment.
"Rather than aiming at the commodity market, our new South American plant is designed to satisfy a growing market for economically viable high performance PET."
The $70 million single reactor line will have a capacity of 450 kt per year and is scheduled to be on stream in 2006. A plant spokesperson told FoodProductionDaily.com that the exact location of the plant would be confirmed before the end of the year.
The group recently completed a new line in Mexico which to-date remains the world's largest single reactor line PET plant.
"We predict that these emerging new applications, that are already fast growing, will reach a demand level that justifies the size of our new investment within the next 2-3 years," said Ghisolfi.
The new PET factory will employ traditional technology, enhanced by two breakthrough technology innovations; one in the melt line and one in the solid-state phase (SSP).
In the melt line, M&G claims that new FlexPET technology will revolutionise the production of large scale, economically viable performance-enhanced PET.
Unfortunately the company declined to elaborate on the new technology, citing a prior agreement for exclusive disclosure. Nonetheless, the company says that it plans to extend the new technology to some of its plants in the USA and in Europe.
In the SSP, M&G's new EasyUp technology will reduce capital and operating costs to the level projected for crystallisers that are used in processes that claim the elimination of the SSP step, whilst maintaining the grade mix flexibility and potential for resin performance upgrading allowed by traditional SSP containing processes.
"I am very pleased with these break through technologies as they show the value of research and that M&G is ahead of all its competitors in low cost manufacturing and product innovation PET technologies," said Guido Ghisolfi, vice president of corporate operations and development at M&G.
M&G is also currently developing an integration plan for a further investment to back-integrate the new PET plant. However, with large world PTA excesses and sliding market prices being predicted for merchant PTA from 2006, M&G has already ruled out investing in a small scale (below 500 kt/year) PTA-PET integration as this is unlikely to provide sufficient benefit relative to competitors relying on merchant PTA.
"I would be surprised if the recently announced fibre-to-PET conversions (which are very expensive, typically requiring more than twice the capital per unit of output compared to modern PET plants) could recover their investments," said Marco Ghisolfi.
"I am also sceptical of the announcement by another competitor that new technology - though in itself laudable - will sufficiently improve their cost position in North America to earn the cost of capital in the commodity PET market unless a major rationalisation occurs in this segment."
M&G develops PET resins for container packaging and is presently the world's second largest producer of PET for packaging applications with production capacity of 1.3 million tonnes per annum. Group sales proceeds in 2003 were $1.6 billion of which around 80 per cent were derived from operations involving PET resin.