The Urethane Blog

Sadara Update

Sadara model ‘aiding downstream investments’

JUBAIL, Saudi Arabia, 8 hours, 58 minutes ago


The business model of Sadara Chemical, a joint venture developed by Saudi Aramco and The Dow Chemical Company, offers competitive advantages to enable downstream investments, said a top official.

Ziad Al-Labban, CEO of Sadara was speaking at the Saudi Downstream Forum 2016, which is concluding today (March 10) in Jubail, Saudi Arabia.

Al-Labban identified four key competitive advantages enjoyed by Saudi Arabia during a presentation entitled “Downstream Manufacturing Opportunities in Saudi Arabia”. These include the Kingdom’s abundant natural resources, skilled human capital, proximity to growth markets, and access to finances.

“Sadara’s range of differentiated, high value products, enabled by the cracking of naphtha as well as ethane, makes us a true game changer. By capitalizing on Saudi Arabia’s unique competitive advantages, Sadara is positioned to become a key enabler for downstream investments and value added job opportunities for Saudis, which in turn will accelerate the Kingdom’s economic diversification, and create a nurturing environment for ’Made in KSA‘ to truly take shape,” he noted.

In addition to its vast natural resources, which include 20 per cent of the world’s proven oil reserves and the sixth largest proven natural gas reserves, Saudi Arabia also offers competitive corporate taxes, a range of funding sources, a growing Islamic bond (sukuk) market, the largest stock exchange in the Mena region, and a large number of locally-based companies and investors.

Al-Labban further explained that the country’s close proximity to Asia, Africa, and Europe affords investors easy access to the growing markets within those continents.

In terms of skilled human capital, investors are able to tap into a substantial pool of qualified and skilled young Saudis, including over one million students currently enrolled in higher education programs, a number which is slated to grow in the coming years.

To take advantage of these attributes, Sadara has integrated state of the art technologies into its 26 manufacturing plants to address the regional supply gap in differentiated specialty chemicals, which, as of 2015, constituted just 0.3 per cent of the region’s total capacity estimated at 360 million tons, while the remaining 99.7 per cent was made up of commodity chemicals.

Currently at 98 per cent complete, the 6-sq-km mega-complex started producing the first of its specialty products – Solution Polyethylene – in December 2015, the first plant of its kind in the Middle East. The rest of the units are now going through a phased start up and commissioning process and are expected to be fully operational in 2017.

In addition, Sadara is working in collaboration with the Royal Commission for Jubail and Yanbu to develop PlasChem Park, a chemical and conversion industrial park adjacent to the company’s chemical complex.  PlasChem Park will offer easy access to Sadara’s products and infrastructure in Jubail, fueling investment, innovation, growth development and job opportunities with a sustainable impact on the Saudi economy. – TradeArabia News Service