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26. January 2018

SAUDI ARABIA: PlasChem Park Witnesses Steady Investor Interest

Sadara Chemical Company (Sadara) has signed an agreement to supply SADIG-ILCO, a new Saudi-German joint venture focused on the manufacture of a wide range of specialty chemicals, with ethylene oxide (EO) and propylene oxide (PO).

Under the terms of the supply agreement, SADIG-ILCO’s new PlasChem Park facility will offtake EO and PO from Sadara through the EO and PO pipelines that are being established by Sadara. Using these products as feedstock, the company will manufacture a range of specialty chemicals, some of which will be produced for the first time in the Kingdom of Saudi Arabia. This will further enable the production of market-ready products in several areas, including coatings and adhesives, personal care products and many other industrial applications.

Commenting on the supply agreement, Mohammad Alazzaz, Director of Value Park for Sadara, highlighted the investment opportunities available with the new value chains being produced by the Sadara Chemical Complex, saying, “With Sadara’s products now in the local, regional and global markets, we are able to show investors definitively that the Kingdom is an attractive destination for new and exciting downstream manufacturing opportunities. The specialty chemicals that SADIG-ILCO will produce locally will replace imports and encourage development of new downstream specialty industries. I am pleased to see that Sadara’s investment in the EO and PO pipelines for PlasChem Park by Sadara, coupled with other Kingdom and PlasChem Park specific incentives, have already helped to attract a number of EO and PO investors.”

Eng. Ahmad Alubaid, Managing Director, SADIG Industries, highlighted that, “The project is in line with Saudi Vision 2030 and we are thankful for the supportive role of the Ministry of Energy, Industry and Mineral Resources. In addition, we appreciate and thank Sadara for aligning with the vision of developing downstream industries. The EO/PO project is part of SADIG Industries’ growth strategy, and will bring technical know-how to manufacture specialty chemicals in the Kingdom and create quality long-term stable job opportunities. The EO/PO project is part of our third generation project line-up, with an investment of approximately USD 40 million. It forms a key part of a number of projects we are currently working on with a total investment of approximately USD 300 million through which we aim to create more than 300 direct quality jobs. We envision that the project will introduce new chemicals that will enable further downstream industries in the Kingdom and will add value to the local economy and the country’s export portfolio.”

Dr. Corvin Volkholz, Technical Director, ILCO, added, “We believe diversification to the existing chemical market in the Kingdom will open new opportunities for further expansion of the Kingdom’s specialty chemicals industry. SADIG-ILCO will allow us to tap the region’s growing demand and expand into Saudi Arabia, as well as the other regional markets. By combining our downstream manufacturing experience and technical expertise with Sadara’s specialty chemicals value chain, we will be able to bring many new and exciting products to the Kingdom.”

PlasChem Park is a 12 km² industrial park in Jubail Industrial City II, dedicated to downstream chemical and conversion industries. PlasChem Park is a key element differentiating Sadara from other petrochemical, chemical and plastics manufacturing projects in Saudi Arabia. It is uniquely positioned to enable and support downstream opportunities in many market segments, including the Hydrocarbon Resin Cluster, Ethylene Oxide/Propylene Oxide (EO/PO) Cluster, Polyurethane Cluster and a Plastics Cluster. These clusters are designed to attract diversified investments into PlasChem Park for downstream applications such as the production of oil and gas chemicals, construction materials, auto components, animal feed, paints and coatings, as well as home and personal care products. There are currently two downstream investments operating in Jubail Industrial City II and several existing investors in the PlasChem Park will conclude their planned project engineering activities by early 2018 with ground-breaking activities set to take place in the third quarter of 2018.

Source: Sadara website, Jubail; 17 Jan 2018
(Syed Rashid Ali, Karachi, Pakistan)

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