DAMMAM, 7 June — The newly-formed National Petrochemical Industrialization Company (NPIC) said yesterday it was planning to build in joint venture a SR2 billion ($533 million) plant to produce polypropylene.
A company official said NPIC would sign a deal with its partner, Basell Holdings Middle East, to set up an SR600-million joint company to run the plant which will be built at the industrial city of Jubail.
The proposed plant will produce 450,000 tons annually of polypropylene, a plastic mainly used in packaging, carpets, bags and fine textiles.
NPIC will hold a 75 percent stake in the new firm, Saudi Polyolefins Company (SPC), while Basell would own the remaining 25 percent. “NPIC will provide SR450 million and Basell SR150 million,” Reuters news agency quoted the official as saying.
The official said the Saudi Industrial Development Fund had agreed to extend a SR400 million loan for the new project. “Yes, we have received the approval from the fund,” he said. He said the new company would seek commercial loans of around SR1 billion from banks to cover the remaining cost but would not give further details.
An NPIC statement said it had earlier finalized an agreement with the state-owned Saudi Aramco oil company to supply propane gas as feedstock for the plant. Construction work will start in the second half of the year and is expected to come on stream in late 2003, it said. “It is estimated that the project will create more than 250 jobs,” the statement said.
Investment in NPIC was brokered through private placements, managed by AlBank AlSaudi AlFransi and carefully marketed to a selected group of investors. The new company will concentrate its business on the construction, management, operation and ownership of petrochemical projects and the marketing of their products. NPIC’s founding shareholders include leading Saudi and Gulf institutions and businessmen.
