RIYADH, 6 June 2005 — Saudi International Petrochemical Company (Sipchem) signed a joint venture agreement with German Company, Helm Arabia Gmbh & Co. The deal hopes to set up projects in Jubail that would produce annually 460,000 tons of Acetic Acid and 300,000 tons of Vinyl Acetate Monomer (VAM).
Sipchem’s Chairman Abdulaziz A. Al-Zamil inked the agreement on behalf of his organization, while the chairman of Helm Arabia GmbH & Co., Dieter Schnabel signed the SR2.7 billion accord representing his company and French company, Thales.
Helm Arabia also signed marketing and offtake agreements for the long term offtake of both Acetic Acid and VAM for sale and distribution outside the Middle East. Sipchem will market the products within the Middle East.
Among the dignitaries present at the signing ceremony included, the governor of Royal Commission of Jubail and Yanbu, Prince Saud Al-Thunayan, American Ambassador James C. Oberwetter, French Ambassador Charles-Henri D’Aragon, German Ambassador Dr. Gerhard Enver Schrombgens, Director General of Thales International Jean-Claude Climeau and Shoura Council Member Dr. Abdul Rahman Al-Zamil.
“By signing these agreements, Sipchem has taken a significant step toward its plan to establish a world-scale acetyl complex in the Kingdom,” Al-Zamil said, adding that the project is expected to start in 2008. He emphasized that his company is committed to bringing new technologies, foreign investments and creating new job opportunities in the Kingdom.
He estimated that the project will provide 500 jobs directly and 2,000 placements indirectly. “Saudi youths will be given adequate training in various sectors of the project,” he added
Al-Zamil pointed out that acetyle complex, which is the first of its kind in the Middle East, includes three projects — Carbon Monoxide with a capacity of 250,000 tons per year, Acetic Acid and VAM. Sipchem has signed technology agreements with DuPont and Eastern Chemical of US. “These products are greatly beneficial to the company and national economy in general, he said, adding that they will pave the way for manufacturing many intermediate commodities that depend on these products as raw material such as paints, timbers and industrial additives. Al-Zamil said the company hopes to export 70 percent of its production and the balance for the local market.
Sipchem is a Saudi joint stock company founded in 1999 with current paid-in capital of $400 million with participation from leading corporate organizations and investors in the GCC region. It currently operates a 1.0 tpy methanol plant and is constructing a 75,000 tpy butanediol plant, scheduled for commissioning in December 2005.
Helm Arabia is a company registered in Hamburg owned by Helm AG, Hamburg and Thales, a French-based leading international electronics and systems group, supporting the project as part of the French economic offset program to develop industry and investment in the Kingdom. Founded in 1900, Helm AG is one of the world’s leading independent chemicals marketing enterprises with branches and sales offices in more than 30 countries and worldwide revenues of 4.1 billion euros.
“These projects will complement the strength of Helm in the petrochemical and chemical marketing,” Schnabel said, adding that investing in the Kingdom will facilitate sourcing competitive products thus giving Helm a competitive edge in providing Acetic Acid and VAM to its customers worldwide.