Doing Business in Saudi Arabia - International Franchise Association

Chemical Production Machinery – CHM
Overview Return to top
A news report in August 2009 noted that Saudi Arabia will invest more than $46 billion to build
three world class petrochemical plants. These giant projects include a petrochemical complex
at the Ras Tanura Oil Refinery to produce 11 million tons per year of various petrochemical
materials, $9 billion to build a huge petrochemical facility in Jubail with a production capacity of
6 million tons per year, and expansion of the Petro-Rabigh operation.
Saudi Basic Industries Corp. (SABIC) is a global company (www.sabic.com). It is a fast growing
petrochemical and steel producer. SABIC is hopes to become the preferred world leader in
chemicals, creating a corporate environment which inspires innovation and talent. Adopting a
new business model, and continued investment commitment in plant and equipment will ensure
that SABIC achieves its long term goals.
Total production in 2008 by SABIC’s business units is as follows:
Material
Metric Tons
(Thousands)
Fertilizers 7,050
Innovative Plastics 1,330
Basic Chemicals 23,691
Polymers 7,905
Intermediaries 11,756
Receptivity to US products and services is very high and the current favorable exchange rate
between the US Dollar and Saudi Riyal strengthens the competitiveness of US exports of goods
and services. Nevertheless, major competitor engineering companies from Europe, Japan,
South Korea, China and Australia appear determined to participate in this lucrative market.
SABIC has started looking downstream for the next wave of expansion projects. SABIC’s chief
executive officer stated that the company is conducting a study to build new complexes to
increase petrochemical production to 130 million metric tons by the year 2020 from a total of 56
million tons in 2008.
Best Products/Services Return to top
There is a huge demand for the products and services of American manufacturers/suppliers of
industrial equipment used in the petrochemical industry. U.S. companies are expected to avail
themselves of excellent opportunities evolving from new projects undertaken by the joint stock
company SABIC and private sector petrochemical companies.
Furthermore, American design and engineering companies/licensors have good opportunities to
license their processes or provide technical know-how through licensing agreements and
through active participation in international tenders to manage, design, procure and build
petrochemical complexes.