Sadara to supply feedstock to new Saudi/German jv

Sadara, the joint venture between Saudi Aramco and Dow Chemical, has signed a supply agreement with SADIG-ILCO, a new Saudi-German chemicals manufacturing joint venture, with ethylene oxide (EO) and propylene oxide (PO).

The project falls within Saudi Vision 2030, which aims to diversify the country’s economy beyond oil, while building in-country expertise and knowledge that would create jobs for Saudi nationals.

Under the terms of the supply agreement, SADIG-ILCO’s new PlasChem Park facility will be supplied with EO and PO from Sadara through the pipelines that are being established by Sadara, said the company.

The new jv will manufacture a range of speciality chemicals, some of which will be produced for the first time in Saudi Arabia. This will later enable the production of products such as coatings and adhesives, personal care products and many other industrial applications.

Ahmad Alubaid, Managing Director of SADIG Industries said “The EO/PO project is part of our third generation project line-up, with an investment of approximately US$40 million. It forms a key part of a number of projects we are currently working on with a total investment of approximately US$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 country and will add value to the local economy and the country’s export portfolio.”

PlasChem Park is a 12 sq km 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.

SADIG Industries is a Saudi company that develops, establishes and promotes downstream industries in Saudi Arabia. It is currently developing a number of industrial projects including phosphorus-related projects that involve the production of elemental phosphorus, phosphorus derivatives and specialty chemicals.

ILCO Chemikalien is a Germany-based company with expertise in the field of specialty chemicals. It develops and markets its own speciality products in addition to distributing those of major chemical companies.