Sadara signs supply deal for PlasChem Park

Khalid Al-Luhaidan, Ziad Al-Labban, Hong Jungko, Abdullah Al-Amoudi at the agreement signing ceremony.
Updated 27 May 2016

Sadara signs supply deal for PlasChem Park

JUBAIL: Sadara Chemical Company (Sadara) has entered into a supply agreement with Surfactants’ Detergent Company (SDC), a joint venture being developed by a Saudi/South Korean consortium which plans to build a chemical production facility in PlasChem Park, located in Jubail Industrial City II.
The Saudi/South Korean consortium comprises SFC Ltd, a Korean technology provider, and Saudi partners Ahmad K. Al-Amoudi Ltd. (AKA) and Maydan Industry for Industrial Developments & Investment Ltd. (Maydan Industry).
Under the agreement, Sadara will supply Ethylene Oxide (EO) and Propylene Oxide (PO) to SDC via pipeline. SDC will specialize in supplying the domestic market’s demand for detergents.
Commenting on the agreement, Sadara’s Value Park Director Mohammad Alazzaz said: “We welcome the interest of Korean SMEs to participate in our specialty chemicals market which is growing rapidly in line with the move to diversify the Kingdom’s economy.”
The director said: “This consortium between a Korean Specialty company as technology provider and local Saudi Investors and entrepreneurs is a great model of collaboration, combining local talent pools and knowledge with international experience and expertise. SFC’s interest in entering the Saudi market highlights the global interest we have received for the many opportunities PlasChem Park has to offer.”
Alazzaz said: “Infrastructure development on site at PlasChem Park is nearly complete, with power and utilities tie-ins being finalized in each of the divided lots. PlasChem Park is uniquely positioned to enable and support downstream opportunities in many market segments such as those industries that rely on EO and PO, and we look forward to welcoming SDC to the EO/PO Cluster. PlasChem Park investors will also benefit from the many additional shared services that are being developed, reducing their capital footprint as well as simplifying and streamlining their operations in the long run,” said Alazzaz.
SFC CEO Hong Jungku said: “This joint venture is an excellent opportunity for us in the SFC and for our Saudi partners. We are creating a surfactants plant which is very advanced technologically and has very good cost efficiency. The joint venture leverages the unique strengths of SFC and our Saudi partners to create substantial value for our stakeholders.”
In welcoming the deal, Maydan Industry Managing Director and SDC Chairman Khalid Alluhaidan said: “The positive impact of the Saudi government’s vision in diversifying the Kingdom’s economy has helped create this alliance with SDC and enabled this deal with Sadara to come to fruition.”
He said: “We greatly appreciate the dedicated support by our colleagues in Sadara and we would also like to extend our thanks and appreciation to the Royal Commission for Jubail & Yanbu for their support in developing PlasChem Park.”
PlasChem Park is attracting diversified investments for downstream applications such as the production of oil and gas chemicals, construction materials, paints and coatings, as well as home and personal care products.
These investments will create unprecedented downstream manufacturing opportunities, new jobs for Saudi nationals, as well as contributing to the fulfillment of the Government’s vision to diversify the Kingdom’s economy.
Sadara is a joint venture developed by the Saudi Arabian Oil Company (Saudi Aramco) and The Dow Chemical Company. With a total investment of about $20 billion, Sadara is building a world scale chemical complex in Jubail Industrial City II in Saudi Arabia’s Eastern Province. Comprising 26 world scale manufacturing units, the Sadara complex is the world’s largest to be built in a single phase and will be the first in the Middle East to use refinery liquids, such as naphtha, as feedstock.

Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

Updated 23 April 2019

Saudi Real Estate Refinance Co. plans up to $1.07bn sukuk sale this year

  • The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios
  • SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year

RIYADH: Saudi Real Estate Refinance Co. (SRC), modelled on US mortgage finance firm Fannie Mae, aims to issue up to 4 billion riyals ($1.07 billion) of long-term sukuk this year, its chief executive said on Tuesday.

The plan by SRC, a subsidiary of Saudi Arabia’s sovereign Public Investment Fund, comes as it prepares to purchase more home loan portfolios from mortgage financing companies and banks to boost the Kingdom’s secondary mortgage market.

SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview.

“Our strategy is clearly to tap the market twice this year,” he said. “We are really looking at probably issuing something between ... 2 and 4 billion riyal that we may be issuing in two tranches.

He said SRC was looking at sukuk in the 10 to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said.

He said the company was assessing whether it could also issue bonds in currencies other than the local riyal.

In March, SRC completed a 750 million riyal sukuk issue with multiple tenors, under a program that allows it to issue up to 11 billion riyals of local currency denominated Islamic bonds.

“The rule of the game for us is, like many projects across the Kingdom, attract liquidity from foreign investors,” Susini said.

He said SRC had spent 1.2 billion riyals from its balance sheet buying mortgages from local mortgage financing companies and provided liquidity to these firms.

It has also signed initial accords with several commercial banks to acquire housing mortgage portfolios.

Saudi Arabia’s housing ministry is targeting the mortgage market to reach a total value of 502 billion riyals by 2020 from around 300 billion riyals now.

The government wants to increase activity in the real estate market as it moves to revitalize the economy and is taking steps to reform the sector as part of its 2030 reform plan.

It has been working with developers and local banks to counter a shortage of affordable housing — one of the country’s biggest social and economic problems. Saudi Arabia wants 60 percent of its nationals to own homes by 2020, up from 47 percent in 2016.

The size of real estate financing relative to its gross domestic product is 5 percent in Saudi Arabia compared to 69 percent in the United States, 74 percent in the United Kingdom and 43 pct in Canada, the housing ministry has said.

“The goal of SRC in this market was to make sure that we will be able to refinance at least around 10 percent of the market in 2020, and 20 percent of the market by 2028,” Susini told Reuters.