JEDDAH, 30 June 2006 — Polysius, a company of ThyssenKrupp Technologies of Germany, has signed a contract with Al-Safwa Cement Company, a project of El-Khayyat family of Jeddah to supply equipment for their new Greenfield cement project.
The agreement was signed by El-Khayyat Chairman Ahmed Taha Khayyat and Polysius Chairman Jurgen Bauer at El-Khayyat headquarters here yesterday to supply equipment for Al-Safwa Cement Company project worth SR937.5 million ($250 million).
The new cement project will be based on the latest technology and is scheduled to come on stream in late 2008 at Jabal Farasan, about 100 km north of Jeddah, near the SR100 billion King Abdullah Economic City (KAEC).
The Al-Safwa cement project will have an annual capacity of 1.4 million tons. “Within 10 to 20 months we’ll start supplying equipment to this major cement project and its construction will start immediately. We’ve long tradition with the Saudi market and involved in various projects,” Bauer said, adding that the company is not only involved in projects across the Kingdom but also has its presence in other GCC countries and Egypt.
Earlier, Riyad Bank was appointed as the financial adviser to structure project financing for the cement project. The Law Firm of Salah Al-Hejailan and Freshfields Bruckhaus Deringer were also appointed as legal counsels to financing parties of the project.
“Al-Safwa is in negotiations with potential foreign joint venture partners to join the project in the next few months. These are large international companies that will come in as equity partners,” Mazen Ahmed Khayyat, general manager of Al-Safwa Cement Company, told Arab News.
Mazen added that demand for cement is highly dependent upon the level of construction activity and was largely influenced by government spending. Private sector is playing a larger role in the Kingdom as well as in the GCC region, making the private sector’s non-residential construction activity the swing factor for cement demand.”
Internationally renowned consulting firm, PEG, S.A. of Switzerland, has been retained as consultant and project manager. Erik Sylvander, technical director of PEG, said the company is working on three packages for the projects - equipment supply, civil works and erection of the equipment, and power plant for supplying power to the plant.
“Riyad Bank is a financial adviser and working with the project sponsor El-Khayyat family for the last few months in structuring the project finance transaction,” Ghazali Inam, vice president and senior corporate finance officer of Riyad Bank, said.
