Sadara Chemical Company, 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 was signed previously between the companies.
The new agreements were signed by Sadara’s CEO Dr. Faisal Al-Faqeer, SADIG Industries’ managing director Ahmed Alubaid and ILCO Chemicals’ technical executive officer Dr. Corvin Volkholz, during a formal ceremony at Sadara’s Business Complex, in Jubail Industrial City, in the presence of Dr. Abdulrahman Alubaid, co-founder of SADIG Industries, and Turki Al-Mady, Dussur’s chief investments officer.
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.
Sadara CEO 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.’”
Al-Faqeer added: “The specialty chemicals that SADIG-ILCO will produce locally will replace imports and encourage development of new downstream specialty industries.”
SADIG Industries managing director Alubaid said: “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 third generation project lineup with an investment of approximately $70 million.”
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.”
Al-Mady, chief investments officer of Dussur, said: “Supporting this agreement is in line with our mandate to contribute to Vision 2030 industrial objectives, specifically the National Industrial Development and Logistics Program and National Industrial Development Center priorities.”