Sector News

Saudi-German JV to invest in specialty chemicals next to Sadara

January 17, 2018
Chemical Value Chain

Sadara, the joint venture (JV) between Saudi Aramco and Dow Chemical, announced today that it has signed a supply agreement with SADIG-ILCO, a new Saudi-German JV focused on specialty chemicals.

The agreement covers the supply of ethylene oxide (EO) and propylene oxide (PO) from Sadara’s recently commissioned $20-billion petrochemicals complex at Jubail. SADIG-ILCO’s new PlasChem Park facility will offtake EO and PO from Sadara through pipelines that are being built by Sadara.

The JV will manufacture a range of specialty chemicals, some of which will be produced for the first time in Saudi Arabia. This will further enable production of materials used in coatings and adhesives, personal care, and many other industrial applications. “The specialty chemicals that SADIG-ILCO will produce locally will replace imports and encourage development of new downstream specialty industries,” said Mohammad Alazzaz, director of Value Park for Sadara.

The EO/PO derivatives project with an investment value of about $40 million forms “a key part of a number of projects we are currently working on with a total investment of approximately $300 million.” said Ahmad Alubaid, managing director, SADIG Industries.

Corvin Volkholz, technical director, ILCO Chemikalien (Erkelenz, Germany), said, “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 products to the kingdom.”

PlasChem Park is a 12 square kilometer industrial park in Jubail Industrial City II dedicated to downstream chemicals and conversion industries. It supports downstream opportunities in many segments, including clusters focusing on the production of hydrocarbon resins, EO/PO, polyurethane derivatives, and plastics. There are currently two downstream investments operating at Jubail Industrial City II and several investors will conclude their planned project engineering activities by early 2018 with groundbreaking activities set to take place in the third quarter of 2018.

SADIG Industries, a Saudi company that develops downstream industries in Saudi Arabia, is currently developing a number of projects including phosphorus-related projects that involve the production of elemental phosphorus, phosphorus derivatives, and specialty chemicals. The SADIG-ILCO JV was formed to explore opportunities for manufacturing specialty chemicals in Saudi Arabia.

By Natasha Alperowicz

Source: Chemical Week

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