Saudi International Petrochemical Company (Sipchem) and Hanwha Chemical Corporation of South Korea announced signing a Joint Venture Agreement to establish a new petrochemical company in Al-Jubail Industrial City, Saudi Arabia. The new petrochem company will be owned 75% by Sipchem and 25% by Hanwha Chemical. The new polymers venture comprises of a 200,000 mtpa ethylene vinyl acetate (EVA) and a 125,000 mtpa of polyvinyl products. The plants will be built on Sipchem site in Al-Jubail with an estimated cost of SR 4 bln (US$1.1 bln) and are expected to start by the end of 2013.
The new products are main ingredients for hot melt adhesives, hot glue sticks, shock absorbers in sports shoes, adhesives for porous materials, particularly for wood, paper, and cloth. The feedstock for the projects will be sourced from Saudi Aramco, Sabic and from other Sipchem affiliates. Sipchem has announced earlier the signing of a technology licensing agreement with ExxonMobil Chemical Technology Licensing LLC, USA for the EVA project.
Sipchem currently has two affiliates producing Methanol and Butanediol and three affiliates that would start production of Carbon Monoxide, Acetic Acid and Vinyl Acetate Monomer in the next 2 months. By the end of 2013, Sipchem's total investment will reach approx. 13 bln Saudi Riyals and total production will reach 2.5 mln metric tons of various products, many of which are produced for the first time in the Middle East. Hanwha Chemical, an affiliate of the Hanwha Group, is the 10th largest commercial and petrochemical conglomerate in Korea, has been actively expanding its presence in the global market.