Published: Jun 26, 2014
Source: Tadawul

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Addendum announcement from Saudi Basic Industries Corp related to entering into a strategic partnership with Mitsubishi Rayon Co., Ltd

This has reference to the SABICs announcement published on Tadawul on 31/5/2011 regarding entering into a strategic partnership with Mitsubishi Rayon Co., Ltd. for the construction and operation of two new manufacturing plants in Jubail Industrial City, one for the production of Methyl Methacrylate Monomer (MMA) with 250,000-metric-ton annual capacity, and the other for Poly Methyl Methacrylate (PMMA) with an annual capacity of 40,000 metric tons, both adopting state-of-the-art world technologies. SABIC announces the completion of all requirements relevant to the establishment of a 50-50 joint-venture with Mitsubishi Rayon Ltd., with a capital of SR 1.35 billion.

After a techno-commercial review, the EPC contract has been awarded to CTCI Corporation (Taiwan) on 25/06/2014. The estimated total cost of the establishment the joint venture and the construction of the project amounts to SR 4.5 billion. The engineering works are scheduled to begin on 25/06/2014, and completed in the first quarter of 2017. The project will be financed by partners and banks. The commissioning of the joint venture is expected to be in the second quarter of 2017 for about six months, after which the commercial operations will begin. Impact on financial results is expected after the announcement of the commercial operations. The relevant progress details will be announced in due course.

The process of preparing the fundamental engineering designs and concluding the procurement agreements took longer than scheduled. The aim was to complete the feasibility studies and conclude some relevant agreements. During this period, there was no significant financial impact. Through this partnership, SABIC aims to achieve its strategic goals and enhance its leading position. The joint venture will introduce new high value products, which will diversify material used in industrial clusters, thus allowing expansion and further diversification in Saudi Arabias industrial sector, creating new opportunities in the downstream industries such as construction, automotive, electronics, medical technologies, paint and coating.

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