SABIC highlights role in downstream growth

SABIC highlights role in downstream growth
Updated 11 March 2014

SABIC highlights role in downstream growth

SABIC highlights role in downstream growth

Saudi Basic Industries Corporation (SABIC) has highlighted its leading role in promoting Saudi Arabia’s downstream sector, but emphasized that collaborative efforts are needed at various levels to enable "Made in Saudi Arabia" industries.
Representing SABIC Vice Chairman and CEO Mohamed Al-Mady, Mutlaq Al-Morished, executive vice president, corporate finance, said at the Seventh Annual Global Competitiveness Forum in Riyadh on Jan. 20 that Saudi Arabia could certainly be a prime investment destination by capitalizing on its competitive advantages and investment opportunities.
The three-day forum began on Jan. 18 under the theme "Building Competitive Partnerships" with the panel discussion focusing on ‘Developing the home advantage — Building a new era of Made in Saudi.
Citing the success of the Jubail Industrial City, Al-Morished said that for Saudi downstream industries to flourish, “empowered executors” would need to collaborate in driving the effort, particularly in establishing the planned industrial parks in Saudi Arabia.
These industrial parks, eight in all, are expected to develop 130 specialized factories that will bring the know-how and the technologies that Saudi Arabia need to step in a new industrial era.
SABIC products will support the industrial parks strategy by offering competitively-priced raw material supplies that enable key industries such as automobile. SABIC’s elastomer project, which is scheduled for a 2015 startup, will produce about 400,000 tons per year of synthetic rubber products, which are mainly used for automotive applications, such as tires, gaskets, hoses and weather seals.
Al-Morished pointed out that Saudi Arabia imports about 18 million tires every year without counting the locally remanufactured heavy vehicle tires. The majority of the raw material used in the tire industry will be locally supplied by 2015, mainly through SABIC projects, he said.
The Saudi construction sector, Al-Morished said, is also set to become the fastest-growing segment in Saudi Arabia, with a projected growth rate of 35 percent over the next three years. This construction boom needs a lot of downstream industries to support in terms of construction materials, insulation, paints, etc.
The same holds good for the coating market which is expected to grow at a compounded annual rate of about six percent over the next five years. “The Saudi Arabian market remains the biggest and brightest jewel in the region, with paint demand approaching 900,000 tons,” Al-Morished said. In this regard, SABIC’s manufacturing affiliate, Saudi Kayan, has formed a joint venture to build the world’s largest butanol plant in Jubail to power Saudi Arabia’s paints and coatings industry.