World's largest butanol plant to go on-stream in Jubail in 2015

Updated 28 December 2012
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World's largest butanol plant to go on-stream in Jubail in 2015

A three-way shareholders agreement to establish the Saudi Butanol Company, which will produce butanol to support the continued growth of the paints and coatings industry in Saudi Arabia, has been signed by the Saudi Kayan Petrochemical Company, a manufacturing affiliate of the Saudi Basic Industries Corp. (SABIC), Sadara Chemical Company (Sadara), a joint venture developed by Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company (Dow), and Saudi Acrylic Acid Company (SAAC), an affiliate of National Industrialization Company (Tasnee) and Sahara Petrochemicals Company.
This will be the first butanol plant in the Middle East and the largest in the world. To be located at Tasnee Petrochemicals Complex in Jubail Industrial City and operated by Tasnee, the new plant is scheduled to go on-stream in the first quarter of 2015. It will open new job opportunities of around 200 direct and indirect positions for Saudi citizens in strong support of the Kingdom’s efforts to create meaningful jobs for nationals.
The agreement was signed yesterday by Mutlaq Al-Morished, Saudi Kayan Chairman and SABIC corporate finance executive vice president; Ziad Al-Labban, Sadara chief executive officer; and Moayyed Al-Qurtas, SAAC chairman and Tasnee vice chairman and CEO.
Under the agreement, the three partners will have equal stake in the production quantities for downstream use or for sales in the local and overseas markets. The design capacity of the plant, which is scheduled to go on-stream in 2015, is 330,000 tons per annum of n-butanol and 11,000 metric tons per annum of iso-butanol. SABIC will be marketing the Saudi Kayan share of the butanol plant along with the excess material of SAAC. The estimated total cost of the project is SR 1.94 billion.
Commenting on the benefits of the new joint venture to the Saudi paints and coating industry, Al-Morished said: “The butanol project will strongly support the coatings value chain in the Kingdom. Potential investors can build on the normal-butanol and its derivates produced by the new joint venture partners, and introduce a wide range of coating products for the local, regional and global markets. Saudi Kayan constantly seeks new materials and open up new opportunities for our customers.”
Al-Labban said: “This is another outstanding example of Sadara’s commitment to success through collaboration with industry players and service providers in the Kingdom, and we are pleased to team up with Saudi Kayan and SAAC. We are proud that the butanol-based products, which we will bring to market, will be manufactured in the Middle East for the first time and will be a significant contributor to the continued success of downstream industries in Saudi Arabia.”
Al-Qurtas said that the butanol plant will provide additional integration to SAAC’s Acrylates Complex, which is the first complex of its kind in the region. “We appreciate the opportunity we have got to cooperate with SABIC/Saudi Kayan and Sadara and for their trust in Tasnee to build and operate the largest butanol plant in the world on behalf of the partners. We all can benefit from the economies of scales which will enhance our national petrochemical industries’ competitiveness in the world.”


Iran sanctions shadow falls on smaller German banks

Updated 27 May 2018
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Iran sanctions shadow falls on smaller German banks

  • Some German companies plan to press on with Iran dealings
  • German exports to Iran rose 15.5 percent last year

Germany’s biggest lenders have shied away from business with Iran after past penalties for breaching US sanctions, but smaller banks have leapt on opportunities afforded by the nuclear deal rejected by Donald Trump.

There are just months to go until a November deadline issued by Washington after the US president abandoned a hard-fought agreement that loosened business restrictions on the Islamic Republic in exchange for Tehran giving up its pursuit of nuclear weapons.

But some firms plan to press on in their dealings with Iran despite the looming threat of penalties.

“We will continue to serve our clients,” for now, said Patrizia Melfi, a director at the “international competence center” (KCI) founded by six cooperative savings banks in the small town of Tuttlingen in southwest Germany.

The center, which supports companies operating in sensitive markets like Iran or Sudan, has seen demand “rising sharply in the last few years, from firms listed on the Dax (Germany’s index of blue-chip firms), from all over Germany and from Switzerland,” she added.

German exports to Iran have grown since the nuclear deal was signed in 2015, adding 15.5 percent last year to reach almost €2.6 billion ($3.0 billion) after 22-percent growth in 2016.

Such figures remain vanishingly small compared with Germany’s €111.5 billion in exports to the US — its top customer.

Nevertheless, the KCI will “wait and see what the sanctions look like” before turning away from Iran, Melfi said.

Already, firms dealing with Tehran must take great care not to fall foul of US restrictions.

Transactions are carried out in euros, and the KCI does not deal with businesses that have American citizens or green card resident holders on their boards.

What’s more, products sold to Iran cannot contain more than 10 percent of parts manufactured in the US.

One of the most important inputs for the business is “courage among our managers” given the high risks involved, Melfi said.

Germany’s two biggest banks, Deutsche Bank and Commerzbank, avoid Iran completely after being slapped with harsh fines in 2015 over their dealings there, with Deutsche alone paying $258 million in penalties.

DZ Bank, which operates as a central bank for more than 1,000 local co-op lenders, is withdrawing completely from payment services there, a spokesman told AFP.
That left KCI to seek out the German branch of Iranian state-owned bank Melli in Hamburg.

Even that linkage could break if Iran’s biggest business bank appears on a US list of barred businesses as it has before.

Meanwhile, among Germany’s roughly 390 Sparkasse savings banks, business with the regime is mostly limited to producing documents linked to export contracts.
“We will be looking even more closely at those” in the future, a person familiar with the trade told AFP.

Elsewhere in the German economy, the European-Iranian Trade Bank (EIH) founded in 1971 is another conduit to Tehran.

Also based in Hamburg, it for now remains “fully available to you with our products and services,” the bank assures clients on its website, although “business policy decisions by European banks may result in short term or medium term restrictions on payments.”

Neither does the Bundesbank (German central bank) believe that much has so far changed for business with Iran.

“Only the European Union’s sanctions regime will be decisive,” if and when it is changed, the institution told AFP.

Any payment involving an Iranian party would have to be approved by the Bundesbank if things return to their pre-January 2016 state.

German banking lobby group Kreditwirtschaft has called on Berlin and other EU nations to clarify their stance — and to make sure banks and their clients are “effectively protected against possible American sanctions.”

KCI’s Melfi said time is running out for EU governments to act.

“Many firms just want to stop anything with Iran, since they can’t calculate the risk of staying,” she noted.

On Friday for the first time since the Iran nuclear deal came into force in 2015, China, Russia, France, Britain and Germany gathered in Vienna — at Iran’s request — without the US, to discuss how to save the agreement.

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