Turnkey contracts to build the plants in Jubail Industrial City had been announced earlier.
The two Sipchem plants will be the first of their kind in the region, according to officials.
The first plant produces ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) and the second facility will make ethyl acetate and butyl acetate.
The production capacity of the vinyl acetate plant will be 200,000 tons per annum.
It will be operated by the International Polymers Company Limited, an affiliate of Sipchem, founded in 2009.
Sipchem and Hanwha Chemical of South Korea have 75 percent and 25 percent stakes in the venture respectively. The total cost of the project is estimated at around SR3 billion.
The project’s main contractor, Korean company GS Engineering & Construction Co., started construction work at the site last month.
The plant is scheduled to start operations during the second quarter of 2013.
Sipchem announced a technology license agreement with ExxonMobil in May 2009 for this plant.
Both Sipchem and Hanwha will be in charge of global marketing operations for these products.
EVA is used as a feedstock in the production of heat soluble adhesives, resin products and high-quality sports bandages.
LDPE is used as a feedstock in the production of various types of containers, bottles and medical detergents. The ethyl acetate and butyl acetate plant will have a production capacity of 100,000 tons per annum.
The main Korean contractor, E Tech Engineering and Construction Co., has already started construction work at the site.
This plant is expected to start production in the first quarter of 2013.
The total cost of the project is estimated at around SR350 million.
The ethyl acetate plant will cater to domestic and global markets. Its products will be used as a solvent in the manufacture of inks and industrial fluids and granules. The project will be wholly owned by Sipchem.
Abdulrahman Al-Saif, president, projects and services, pointed out that these plants are being built within the framework of Sipchem's strategic expansion plan.
He said the company had obtained the best technical and financial proposals for the implementation of these projects. He said such products will open up many investment opportunities for Sipchem in advanced industries.
He said the company is in the final stages of securing the necessary funding for these projects.
