JEDDAH, 21 January 2006 — A group of three Saudi companies announced last week that they are in the final process of forming a joint-stock petrochemical company with a Chinese partner.
The three Saudi companies are MIDROC, Sara Development Co. and House of Invention (HOI) Co. The Saudi group announced that part of the SR6.6 billion ($1.76 billion) company’s capital will be offered in an initial public offering (IPO) and the rest will be distributed among the three companies and their Chinese partner.
The new company is set to establish an SR22 billion ($6 billion) petrochemical complex in the Jubail Industrial City, located in Eastern Province, and is expected to create 2,500 new jobs for Saudi nationals.
The production capacity of the new complex is expected to be two million tons of basic and secondary petrochemical products annually.
HOI Company CEO Abdullah Ahmed Bugshan announced that the new complex’s initial phase of production would start in 2007 and the production of basic petrochemicals will commence no later than 2010.
He added that the group is currently negotiating with Saudi Aramco and Saudi Basic Industries Corporation (SABIC) to supply the complex’s medium and small size production lines with primary materials.
MIDROC-Saudi Arabia is owned by the Saudi-Ethiopian business tycoon, Mohammed Hussein Al-Amoudi.
Amoudi, the largest investor in Ethiopia, is a major partner in the Swedish consortium MIDROC especially in its ABV Rock Group. Through MIDROC-Ethiopia he was able to invest more than $1 billion in the country, and to employ more than 15,000 workers, which turned it into the largest employer in Ethiopia.
Sheikh Abdullah Ahmed Bugshan, a senior partner in Abdullah Said Bugshan & Bros., a family partnership created in 1923, established HOI Company in 1997 to address the fast-growing communications and information technology sectors in Saudi Arabia. HOI Company provides high quality solutions and services in the areas of civil works, IT and communications systems, as well as a wide variety of supply and maintenance contracts.
Kamal A.S. Bahamdan is the CEO of Sara Development, the third Saudi partner in the group. Sara Development is a major shareholder in the Saudi International Petrochemical Company (Sipchem), a large conglomerate headed by Saudi, Kuwaiti and Emirati businessmen. Sara Development operates under the umbrella of Sara Holding, the local partner of Cellucom Company, a large global supplier of mobile phones, mobile accessories and other digital media. The Forum of Young Global Leaders, an affiliate of the World Economic Forum, has recently selected Bahamdan as a global business young leader.
