May 1 2006
Mohamed Al-Mady, Vice Chairman and CEO of Saudi Basic Industries Corporation (SABIC), announced today that SABIC is a strategic partner in the formation of the Saudi Kayan Petrochemical Company. This follows the signing of partnership agreements with Kayan for the establishment of the public stock company. The new company’s capital amounts to 12 billion Saudi Riyals.
The new company will be located in Al-Jubail Industrial City with an annual production capacity exceeding 4 million metric tons of petrochemical and chemical products. 45 percent of the capital will be offered for public subscription at a nominal value of 10 Saudi Riyals per share. SABIC will hold a further 35 percent of the company’s capital and Kayan will hold the remaining 20 percent.
Mr. Al-Mady expects the new company will go live in 2009 and it will add some specialized chemicals to the Saudi marketplace that will produced in Saudi Arabia for the first time. These products include aminoethanols, aminomethyls, dimethylformamide, choline chloride, dimethylethanol, dimethylethanolamine, ethoxylates, phenol, cumene and polycarbonate. This is in addition to ethylene, propylene, polypropylene, ethylene glycol, butene-1 and other products which will provide wide opportunities for downstream industries.
Mr. Al-Mady added that the new company will apply the latest state of the art world-class technologies that will enhance its competitive capabilities.
The new company plans to establish an applications center which will focus on development of industrial products and applications, especially polycarbonate research and other new added value downstream industries in Saudi Arabia.
It is worth mentioning that in January 2006, SABIC and Kayan signed an initial memorandum of understanding (MoU) for SABIC to enter as a partner in the new company. The MoU provided for the review, all work studies and agreements and to update feasibility studies within a two-month period, prior to the signing of a final agreement.