The development of the polymer industry in Saudi Arabia moved to advanced materials as shown in the diagram below.
This broad portfolio of polymers and elastomers is creating significant opportunities for downstream plastics and rubber processing such as:
Rubber Cluster (Yanbu)
About 50 kTA of industrial rubber goods (excluding tires) are imported into KSA. Localising 20% would create demand for 10 kTA for local rubber producers. The most promising applications have been studied and discussed with MEIM and IC. In all cases the objective is to establish a sustainable business. The companies being targeted for attraction to KSA are leading players in their fields and KSA needs world class facilities for this relatively new industry. The rubber projects constitute a tight geographical cluster (the projects need to be co-located), and need to be attracted together at the same time due to a strong inter-dependence between them and due to the reactive nature of the rubber compound (i.e. the rubber compound once produced in its cured state will need to be consumed within few hours). The inter-dependence means that a rubber compounder will not be attracted unless there are one or more projects with sufficient volumes to support its operation; likewise, a rubber belt producer (as an example) will not be attracted unless there is a rubber compounder nearby to provide the compounds for its operation. Targeted projects are:
Silicones complex (Jazan)
There is an opportunity in Saudi Arabia for a Specialty Chemical Company to take advantages available in the kingdom in order to become the lowest cost producer and add value to the Kingdom’s resources (quartz, metallurgical silicon and methanol) using keenly priced energy by producing high valued silicone products. This is not a commodity business with a forecast growth rate of 4 % and controlled by 5 companies with over 90% market share and sales of around $13 billion in 2010.
Silicones are versatile products used in thousands of consumer products, construction, and industrial applications. Metallurgical silicon, produced from silica quartz is a primary raw material for the silicones, semiconductors and solar power industries. Metallurgical silicon is produced through a capital and energy intensive smelting operation and further converted to silicones in a capital intensive chemical process that is dependent on the cost of methanol and metallurgical silicon. The pricing of metallurgical silicon and methanol accounts for over 60% of the cost of silicones production and power cost account for 36% of the cost of silicon metal production.
Saudi Arabia has discovered sizable silica quartz deposits at two sites in Asir province and the Ministry of Energy, Industry and Mineral Resources (MEIM) had an extensive exploration program, being conducted by Saudi Geological Survey, to discover and test additional resources by end of 2013.
The MEIM objective is to maximize value addition from national resources by leveraging the quartz resources, energy competitiveness, and methanol competitiveness to position domestic silicones producer(s) in the lowest cash cost quartile. Furthermore, since silicones have thousands of applications, developing this industry could potentially create a significant number of quality jobs for citizens in the tens of small and medium size enterprises in formulation and finished silicones businesses. In addition, silicones products are value add exportable products of high complexity which supports the Government economic diversification efforts.
Industrial Clusters is working with MEIM and Saudi Aramco on establishing an integrated Polyester project at Jazan Economic City by utilizing Paraxylene feedstock from Jazan Refinery. The project, which will cost several billion Saudi Riyals, will mainly produce Purified Terephthalic Acid (PTA), Bottle Grade Polyethylene Terephthalate (PET) and Polyester Fibers. It will employ thousands of Saudi citizens and will generate many downstream investment opportunities mainly in food packaging, textiles and carpet manufacture.