RIYADH, 23 January 2006 — A joint venture shareholders agreement for setting up an SR500 million world-class ethyleneamines manufacturing facility in the industrial township of Jubail was signed here yesterday.
It was signed on behalf of the Al-Zamil Group by Abdul Aziz Al-Zamil, chairman of the Industrial Sector at the Al-Zamil Group, and Donald Joseph Stanutz, president of Performance Products Division, Huntsman Corporation.
The signing ceremony was held at the headquarters of the Saudi Arabian General Investment Authority (SAGIA) in the presence of Amr Abdullah Al-Dabbagh, governor of SAGIA and facilitator of the project.
The agreement gives a big boost to the overseas investment in the Kingdom, which received an unprecedented $17.3 billion in foreign investment last year, according to SAGIA sources. The figure is expected to rise further in the wake of the Kingdom’s accession to the World Trade Organization (WTO) in December.
Al-Dabbagh stated that “Accession will significantly enhance foreign direct investment (FDI). We will have more access to world markets.”
The plant will have a production capacity of 30,000 million tons of ethylenediamine (EDA) diethylenetriamine (DETA), triethylenetetramine (TETA) and higher molecular weight versions, such as TEPA, E-100, AEP and piperazine. These products serve as specialty intermediates for various end uses, including epoxy curing agents, bonding agents and lube-oil additives for gasoline and diesel engines. The production is expected to start in 2008.
Both partners will have equal ownership in the facility, which will use Huntsman’s proprietary technology that the company has optimized in its US plants. Both companies are also partners in the Kingdom’s maleic anhydride-butanediol manufacturing facility which came on stream recently. Huntsman will serve as the exclusive sales and marketing arm for the joint venture and provide technical service and product applications knowledge.
Al-Zamil said: “The signing of the shareholders agreement between Huntsman Corporation and the Zamil Group today is an advanced milestone in the realization of the joint venture and the execution of the ethyleneamines project which will source its feedstock from operating companies in Jubail Industrial City.”
Speaking after the signing ceremony, the Huntsman chief said: “The signing today represents a significant milestone toward the realization of this strategic joint venture. This venture and associated investment demonstrates Huntsman’s commitment to our amines business and to our establishing the global capability to meet our growing customer needs.”
The United States is the Kingdom’s largest trading partner. Bilateral trade rose from $160 million in 1970 to $26 billion in 2004. There are at present 360 joint projects worth more than $20 billion. Economists say growing oil prices would further increase investment opportunities in the Kingdom.
The Saudi government plans to privatize state-run corporations and institutions with a total value of SR3 trillion ($800 billion) within the next 10 years.
These new investments are expected to create at least 500,000 jobs annually. Infrastructure projects, valued at $140 billion, offer the largest investment opportunity followed by the petrochemicals sector (with $92 billion worth of projects), electricity and water ($88.9 billion), telecommunications ($60 billion), tourism ($53.3 billion), natural gas( $50 billion), agriculture ($28.3 billion) and information technology ($10.7 billion).