Eni's chemicals unit opens new recycled plastic production plant

PORTO MARGHERA, Italy (Reuters) - Versalis, the chemical division of Italian energy group Eni, on Monday opened a plant in Porto Marghera for the production of plastics made from mechanically recycled raw materials.

The opening of this factory, which produces materials for the packaging and construction sectors, is part of a multi-year strategy of the state-controlled group to overhaul its chemical business.

A build-up of production capacity in China and high European energy costs have put petrochemical producers under pressure, prompting groups to shut down old plants or sell assets.

Eni announced last year it would invest 2 billion euros by 2029 to turn around its chemicals business, which accumulated 3 billion euros in losses in the last five years.

To bring the business back to profit, the state-controlled group plans to cut the division's exposure to basic chemicals by mothballing its remaining two cracking plants in Sicily and Puglia and a polyethylene factory in Sicily.

The turnaround hinges on starting new activities including plastic recycling, bio-refining and energy storage.

(This story has been refiled to amend the wording in the headline)

(Reporting by Francesca Landini; Editing by Keith Weir)