Sadara signs 20-year supply agreement with Sadig-Ilco

Sadara Chemical Company (Sadara) and Sadig Industries and Ilco Chemicals, 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 were signed previously between the companies.

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, ot 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.

PlasChem Park is a 12-km² industrial park in Jubail Industrial City II, dedicated to downstream chemical and conversion industries in Saudi Arabia. Developed by the Royal Commission for Jubail and Yanbu, the park is adjacent to Sadara’s Chemical Complex and is uniquely positioned to enable and support downstream opportunities in many market segments, including the Chemicals Intermediates Cluster, Ethylene Oxide/Propylene Oxide (EO/PO) Cluster, Polyurethane Cluster and Polymers Cluster.

These clusters are designed to attract diversified investments into PlasChem Park for downstream applications, such as the production of oil and gas chemicals, water treatment chemicals, construction materials, auto components, animal feed, paints and coatings, as well as home and personal care products. Several local and international investors currently exist in PlasChem Park, such as Ravago Middle East, Halliburton, Baker Hughes, VEOLIA, Rufayah Chemical Company and Surfactants Detergents Company, many of whose facilities have either started operation or are currently under construction.

PlasChem Park is a 12-sq km industrial park in Jubail Industrial City II, dedicated to downstream chemical and conversion industries in Saudi Arabia. Developed by the Royal Commission for Jubail and Yanbu, the park is adjacent to Sadara’s Chemical Complex and is uniquely positioned to enable and support downstream opportunities in many market segments, including the Chemicals Intermediates Cluster, Ethylene Oxide/Propylene Oxide (EO/PO) Cluster, Polyurethane Cluster and Polymers Cluster.

These clusters are designed to attract diversified investments into PlasChem Park for downstream applications, such as the production of oil and gas chemicals, water treatment chemicals, construction materials, auto components, animal feed, paints and coatings, as well as home and personal care products. Several local and international investors currently exist in PlasChem Park, such as Ravago Middle East, Halliburton, Baker Hughes, Veolia, Rufayah Chemical Company and Surfactants Detergents Company, many of whose facilities have either started operation or are currently under construction.

Sadara CEO Dr. Faisal Al-Faqeer, commenting on the occasion, 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. Sadara’s investment in its EO and PO pipelines and its commitment toward PlasChem Park have proved to be rewarding.”

Sadig Industries Managing Director Eng. Alubaid, noted that 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. He added, “The EO-PO project is part of our 3rd generation project line-up with an investment of approximately US$70 Million.”