Beirut (APD) - The Saudi conglomerate Al Zamil Holding Group (Zamil Group) and Tunisia's Societe Chimique Alkimia intend to establish a joint-venture company for the production of sodium tri-polyphosphate (STPP) in Jubail industrial city in Saudi Arabia.
The new company will construct a plant with an annual capacity of 50,000 tons of STPP. This plant is expected to start operations by mid 2008, Ali Ben Ali, chairman and general manager of Alkimia, told APD on Wednesday.
"The joint-venture's capital will be in the neighborhood of $50 million while total investment would add up to about $42 million," he said.
He further indicated that these figures are tentative as the partners are still in the early stages of forming the new company.
"Zamil Group will have a stake of 55% in the joint-venture while Alkimia's stake will be 45%", Ben Ali added.
The joint-venture which would tentatively be named Saudi Tunisian Phosphate Product (STPP, mirroring the name of the product) will be a limited liability company (LLC). It would be launched either at the end of April or the beginning of May.
"It is a relatively small plant but we look forward to expand production at a later stage, especially if we open the Iranian market which is a big market," Ben Ali said.
"On the short and medium term it will help us meet the demand for STPP in Saudi Arabia and other GCC in addition to neighboring countries. This project represents a basic phase of Alkimia's expansion strategy in the region," he told APD.
STPP is used in the manufacture of household detergent products and industrial cleaners.
"The new plant will adopt Alkimia's know-how which is implemented in Alkimia's plant in Tunisia. We have developed our own process for manufacturing STPP," Ben Ali added.
Osama Al Zamil, the manager in charge of developing Zamil Group operations in the Riyadh region, was quoted on Wednesday by Riyadh-based business daily al-Iqtisadiya as saying that this joint-venture is in line with his company's investment policy in specialized and intermediate chemicals.
"There is a market for STPP in the Gulf region and neighboring countries," Zamil said indicating that Alkimia is currently selling its products to detergents manufacturers in Saudi Arabia and the Gulf region.
Zamil Group manufactures intermediate chemicals through direct investment and basic chemicals through two joint-ventures. The Saudi conglomerate is also involved in a variety of other activities that include real estate development and investment, the manufacture of aluminum and steel products as well as the provision of food supplies.
Established in 1972, Alkimia is a public joint stock company that manufactures STPP according to the standards of international firms such as Procter and Gamble and Germany's Henkel.
"We are the only STPP manufacturers in Tunisia; our plant in Gabes in southern Tunisia produces about 142,000 tons of STPP per year," Ben Ali said.
"We are selling our products to many countries that include Morocco, Egypt, Lebanon and to such companies as Procter and Gamble," he added.
Shares in Alkimia rose by TD 1.28 or 2.95% to TD 44.60 on Wednesday. [TS]
By Shikrallah Nakhoul, APD Staff Writer in Beirut
© APD (Arab Press Digest) 2006
