BUSINESS

Sadara supplies chemicals to SADIG-ILCO through long-term contracts in PlasChem Park

April 07, 2021

JUBAIL INDUSTRIAL CITY, Saudi Arabia — Sadara Chemical Company (Sadara) and SADIG Industries and ILCO Chemicals (SADIG-ILCO), a Saudi-German joint venture focused on the manufacture of a wide range of specialty chemicals, have signed long-term agreements through which Sadara will supply feedstock chemicals to SADIG-ILCO’s future chemical manufacturing facility in Jubail’s PlasChem Park. This 20-year contract follows a successful primarily agreement that were signed previously between the companies.

The new agreements were signed by Sadara’s CEO Dr. Faisal Al-Faqeer, SADIG Industries’ Managing Director Eng. Ahmed Alubaid and ILCO Chemicals’ Technical Executive Officer Dr. Corvin Volkholz during a formal ceremony at Sadara’s Business Complex, here, in the presence of Dr. Abdulrahman Alubaid, co-founder of SADIG Industries, and Eng. Turki Al Mady, Dussur's chief investments officer (CIO).

Under the terms of the supply agreements, SADIG-ILCO’s new PlasChem Park facility will offtake Ethylene Oxide (EO) and Propylene Oxide (PO) from Sadara through the new EO and PO pipelines that are being built by Sadara. Using these products as feedstock, SADIG-ILCO will manufacture a range of specialty chemicals which will further enable the production of market-ready products in several areas, including cleaners, mining floatation, metal working fluids, industrial lubricants, plastic additives and many other industrial applications.

Dr. Al-Faqeer said: “With Sadara’s differentiated products slate available in local, regional and global markets, along with associated local competitive incentives that are available as well, we are able to demonstrate to investors that the Kingdom of Saudi Arabia is definitely an attractive destination for exciting downstream manufacturing opportunities that can proudly carry the mark ‘Made In Saudi’.”

Dr. Al-Faqeer added: “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 SADIG-ILCO added to the PlasChem Park tenants’ lineup and to see more gains from Sadara’s efforts to attract investments in local downstream industries, despite the many challenges currently being faced especially in the context of the COVID-19 pandemic. Sadara’s investment in its EO and PO pipelines and its commitment toward PlasChem Park have proved to be rewarding.”

SADIG Industries’ Eng. Alubaid, noted: “We thank Sadara for aligning with the vision of developing downstream industries. SADIG-ILCO is part of SADIG Industries’ growth strategy and will introduce new chemicals that will enable further downstream industries in the Kingdom. It will add value to the local economy and the country’s export portfolio, along with creating quality job opportunities in line with Saudi Arabia’s Vision 2030.

“The JV will have several different types of batch reactors and flexible reaction capabilities which enable the JV company to produce a wide range of products that are tailored to the customer requirements and performance needs. The EO-PO project is part of our 3rd generation project line-up with an investment of approximately $70 million.”

Dr. Volkholz added, “We are bringing the technical know-how to manufacture specialty chemicals in the Kingdom and SADIG-ILCO will have an important role in diversifying the existing chemical market as well as we are providing tolling services for our customers. 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.”

Eng. Al Mady said, "We are delighted to witness significant progress by our partners on hitting this crucial milestone necessary to enable further downstream investments in the Specialty Chemicals space.

“Moreover, supporting this agreement is in line with our mandate to contribute to Vision 2030 industrial objectives, specifically the National Industrial Development and Logistics Program (NIDLP) and National Industrial Development Centre (NIDC) priorities. Dussur is excited to be part of this strategic project, which sits at the heart of the phosphorus value chain to be developed in the Kingdom."

PlasChem Park is a 12-km² industrial park in Jubail Industrial City II, dedicated to downstream chemical and conversion industries in Saudi Arabia. Developed by the Royal Commission for Jubail and Yanbu, the park is adjacent to Sadara’s Chemical Complex and is uniquely positioned to enable and support downstream opportunities in many market segments, including the Chemicals Intermediates Cluster, Ethylene Oxide/Propylene Oxide (EO/PO) Cluster, Polyurethane Cluster and Polymers Cluster.

These clusters are designed to attract diversified investments into PlasChem Park for downstream applications, such as the production of oil and gas chemicals, water treatment chemicals, construction materials, auto components, animal feed, paints and coatings, as well as home and personal care products.

Several local and international investors currently exist in PlasChem Park, such as Ravago Middle East, Halliburton, Baker Hughes, VEOLIA, Rufayah Chemical Company and Surfactants Detergents Company, many of whose facilities have either started operation or are currently under construction. — SG


April 07, 2021
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