The CEO of Sahara Petrochemicals says the start-up of its exciting new projects will open lucrative new end-product markets
Sahara Petrochemicals Company is of one of the leaders in the private petrochemical sector in the Kingdom of Saudi Arabia, located in Jubail Industrial City on the Eastern Province. The company is involved in various downstream projects with major local and international partners.
Al-Waha Petrochemicals Company; one of Sahara’s affiliates, has recently started the commercial production of polypropylene using LyondellBasell’s proprietary Spherizone technology.
“We are the first company in Middle East to use this technology and have a production capacity of 450 000 tonnes of polypropylene per year,” says Esam Himdy, managing director and CEO of Sahara Petrochemicals Company. “Some grades produced by this unique technology are not produced by other polypropylene technologies.”
“Our vision is to be amongst the world’s leaders in promoting petrochemical and chemical business, utilising state of the art technologies and building effective strategic alliances and synergies,” he adds.
Sahara is also involved in various joint ventures including Sahara /Ma`aden Petrochemicals (SAMAPCO), which will produce 300 000 tonnes per year of Ethylene dichloride EDC and 250 000 tonnes per year of caustic soda. “This is a 50/50 joint venture project with Saudi Arabian Mining Company (Ma’aden), which will use part of the product at its aluminum refinery,” says Himdy.
The EPC contractor for SAMAPCO project is Daelim which was awarded the project using UDHE technology. “We expect the commercial start-up between end 2012 and early 2013, as the project is progressing as scheduled,” Himdy notes.
While Al-Waha Petrochemical project and SAMAPCO plants are located in Sahara PCC complex in Jubail Industrial City, the company has other joint ventures located on the National Industrialization Company (Tasnee) site in Jubail. “We are also involved in various joint ventures with Tasnee through our joint venture company Tasnee Sahara Olefins Company (TSOC),” he adds.
Through its TSOC affiliate, Sahara is involved in Saudi Ethylene and Polyethylene Company (SEPC), which is a joint venture between TSOC (75%) and LyondellBasell (25%), which produces 1 million metric tonnes of ethylene per annum and 285 000 metric tonnes of propylene per annum using flex cracker. “It also produces 40 000 metric tonnes per annum of Low Density Polyethylene (LDPE) and 40 000 metric tonnes per annum of High Density Polyethylene (HDPE) using Basell technology,” he says.
TSOC also formed a new Saudi company called Saudi Acrylic Acid Company (SAAC). “SACC formed three joint venture companies including Saudi Acrylic Monomers Company (SAMCO), Saudi Acrylic Polymers Company (SAPCO) and the butanol project,” he says.
SAMCO is a joint venture between SAAC (75%) and DOW Chemicals (25%) to produce Acrylic Acid. SAPCO produces Super Absorbent Polymers (SAP) in partnership with Evonik.
“Butanol project is joint venture project (company under formation) between SAAC (33.3%), SADARA (33.3%) and Saudi Kayan (33.3%),” he notes.
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All the above three projects are anticipated to be completed during 2013 and 2014. The Acrylic Acid product is the main feedstock to produce the super absorbent polymers.
“This product is the raw material to produce diapers. All local diapers manufacturers will be using our product as a feedstock instead of importing from abroad,” he says.
“The acrylic acid and super absorbent polymers will be produced for the first time in the Middle East,” Himdy notes.
It is worth mentioning that Sahara Petrochemicals Company was formed in June 2004, and during the last seven years, it has been very active.
“We managed to develop and participate in the above mentioned chemicals and petrochemicals projects, directly or indirectly, which is considered to be a major achievement for a new company to be involved in such variety of chemicals and Petrochemicals projects,” Himdy notes.
Commenting on the expected increase of the cost of feedstock to produce the acrylic acid, Himdy wishes the new price keeps the competitiveness of their products. “Of course, any price hike of feedstock would have an impact of the cost of production,” he says.
As it is the case with any petrochemical start-up company, Sahara and its affiliate companies faced several challenges. “We are doing our best to overcome those challenges,” Himdy says.
The managing director of Sahara is ardent about diversification. “There are plenty of mega petrochemical projects in Saudi Arabia that produce olefins and polyolefins, it is now the time to move across the downstream chain,” he explains. “This will allow the diversification of the Kingdom’s economy and attracts foreign investments,” Himdy explains.
Himdy is also keen to boost cooperation between companies across the GCC region. “Partnership projects between GCC companies are very important, and I am sure that local governments will support such opportunities,” says Himdy. “I think that the Gulf Petrochemicals and Chemicals Association (GPCA) could play an important role in activating such decisions.”
Commenting on the global petrochemical market, Himdy is satisfied with the performance of petrochemical products and he is also optimistic about the future of the industry. “I am happy with the current price levels,” says Himdy. “Though the prices of petrochemical products are cyclical,” he says.
With his optimistic point of view of the chemicals and petrochemical industry in Saudi Arabia, Himdy believes that it would not have been accomplished without the continuous support of the Saudi government and all other concerned authorities.
He also believes that Saudi Arabia with the continuous expansion of the chemicals and petrochemical industry will be the world leader in this field.
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Sahara Petrochemicals Petro Portfolio:
Saudi Acrylic Acid Company (SAAC):
Sahara owns 22% of SAAC, TSOC owns 65% and Tasnee owns the remaining 13% of the share capital. The company operates an Integrated Acrylates Complex project, expected to start up in 2013.
Saudi Acrylic Monomer Company:
A joint ventures between SAAC and Rohm & Haas (Dow) with a 75% and 25% shareholding, respectively. the company manages and operates the acrylic acid and esters plant in Jubail. Expected start up second quarter 2013.
Saudi Acrylic Polymer Company:
The project is set to produce super absorbent polymers. A joint venture between SAAC and Evonik, with expected start up during the first quarter 2014.
Butanol Project:
The Butanol JV is expected to be owned by SAAC, SABIC and SADARA each with a 33.3% shareholding. Commercial operations are expected to commence in the second quarter of 2014.
Sahara Petrochemicals Company affiliates and subsidiaries:
Al Waha Petrochemicals Company:
in Joint venture with LyondellBasell, Sahara controls 75% of the company that produces polypropylene.
Sahara & Ma’aden Petrochemicals Company: Sahara controls 50% of the joint venture which is set to produce caustic soda and Ethylene dichloride. Expected start up 2013.
Tasnee & Sahara Olefins Company (TSOC):
Sahara owns 32.55%, which was established as a holding company for investments in certain other joint venture projects including 75% equity stake in SEPC and a 65% equity stake in SAAC.
