Dow is spreading its wings in the Middle East

Over the years, the American company has built its assets for polyethylene, ethylene oxide, ethylene glycol and hydrocarbons in Kuwait, coatings and reverse osmosis manufacturing in Saudi Arabia and emulsion systems facilities in Dubai.

Each of these business groups have incremental capacity and upgrade projects each year. But today the company is spreading its wings ambitiously with the mammoth Sadara project, and the numbers involved can’t fail to impress.

It is the largest American investment in Saudi Arabia. It is the largest investment any country or company has actually made in the Kingdom. Total investment for the project, including third party investments, will be approximately $20 billion.

When complete, the JV complex will be one of the world’s largest integrated chemical facilities and the largest ever built in a single phase.

Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation, while contributing significantly to Saudi Arabia’s industrial diversification.

Refining and Petrochemicals Middle East caught up with Carol Williams, executive vice president, manufacturing and engineering of Dow Chemical Company, to find out more about Dow’s involvement in the Sadara Project, as well as long term plans for the company in the Middle East and rest of the world.

Dow’s presence in the region is one that is characterised by landmark joint venture partnerships and a commitment to positively impact the local economic landscape, says Williams.

“Petrochemical projects in the Middle East are unique in their advantages and their challenges. The region is naturally blessed with an abundance of resources that results in access to advantaged feedstock.”

While in the past, Middle East economies were capitalising on $150 oil, today we see a shift downstream driving profitable growth in innovation-driven businesses, she says.

Commenting on how the region is different from the rest of the world in its petrochemical production, Williams says the Middle East is ideally located to access high margin end-markets such as Asia Pacific and Eastern Europe.

“The Middle East has a unique demographic situation where majority of the workforce is not composed of nationals of the country; this creates a very diverse cultural mix to manage on large scale projects.”

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“While we need to keep these potential challenges in mind, we welcome the differing experiences, backgrounds and perspectives our employees bring, and rely on those differences to fuel innovation,” she adds.

The Sadara Project is one of the biggest JVs the company has ever undertaken. When completed, Sadara will comprise of 26 manufacturing units, several of which constitute ‘mega projects’ in themselves.

The manufacturing units will produce a wide range of performance products such as polyurethanes (isocyanates, polyether polyols), propylene Oxide, propylene glycol, elastomers, linear low density polyethylene, low density polyethylene, glycol ethers and amines.

Feedstock Advantage
Sadara will have access to both gas and liquid feedstocks. Gas-based feedstocks will be fed by numerous gas plants in Saudi Aramco’s Master Gas System, including the nearby Ju’aymah, Berri, Khursaniyah, and Wasit gas plants.

Liquid feedstocks will be available from refined products at Aramco’s two adjacent joint venture refineries in Jubail, Sasref and Satorp, and from the flagship Ras Tanura refinery nearby.

Last month, Dow also announced the company will market and sell the majority of products produced by Sadara.

Sadara’s first production units will come on-line in 2015, and all units are expected to be up and running in 2016.

“Sadara is an initiative not for the light hearted, and it is a project that is both complex and ambitious in its scope and its implementation,” says Williams.

Fortunately both Saudi Aramco and Dow are very experienced and equipped to deal with the engineering challenges that come with a project of this scale, and are well prepared to face them, Williams explains.

Right from the beginning, she says, the JV partners had an emergency plan incorporated into the planning phase to ensure that they have clearly mapped out the project stress points and critical pathways each step of the way. The highlight of the project, apart from the cheap feedstock, will obviously be the technology Dow brings to the table.

So, what will be that distinguishing factor be in this project?

“In the Sadara project, we have several units that will have improved engineering designs that either improve energy efficiency, reduce waste, or improve yields. For example, we are incorporating our award winning HPPO technology which has the advantage of using about a quarter of the water of traditional processes and less energy,” Williams says.

“In addition, we are incorporating a new chlorine technology for the first time on a major scale that allows us to recycle chlorine, again saving resources. This same technology emphasis also drives our smaller capital projects throughout our installed asset base,” she adds.

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As the executive vice president of engineering and manufacturing, Williams says she is excited to be part of this ‘game-changing’ enterprise, a company that will redefine not only the petrochemical industry in Saudi Arabia, but globally.

“Granted, the project is one of the most ambitious petrochemical projects to be undertaken and a project of this magnitude always comes with many challenges, which include engineering the integration between all the different units and sequencing the start up of the many plants correctly to ensuring we have the right workforce in place.

“Training the workforce on the new technology well before start up occurs and construction management are also areas for focus,” notes Williams.

Talent Management is another key issue to focus on for such a landmark project.
Williams says the region has some remarkable talent. However, the challenge, according to her is that thousands of the best high school graduates attend universities around the world outside of the Middle East. That means the need to recruit differently.

As a solution, she says, Dow and Aramco participate in the Saudi new graduate career fairs and establish relationships with strategic universities to build early relationships with Saudi students.

At King Abdullah University of Science and Technology in Saudi Arabia, Dow has invested in a Middle East and Africa R&D Centre that will drive research for solutions – in the areas such as water and oil and gas – that are in demand locally.

Global Footprint
When asked if only Middle East and Asia were areas of focus for Dow going forward, Williams says the company’s plans are not solely focused on the Middle East and Asia.

“The changing feedstock situation in North America has once again opened up options for economically viable projects. Dow has announced plans in this region also to meet our customers’ needs,” adds Williams.

To maintain a healthy balance sheet, Dow will also focus heavily on technology improvements to deliver competitive advantage with the low cost edge.

When asked if the global downturn will mean less manufacturing opportunities for the company in the future, Williams seemed to suggest that manufacturing was part of the solution and not the problem.

“If you take a close look at any of the world’s great challenges you will find that manufacturing is central to the solution. The world needs semiconductors and microprocessors.”

She says manufacturers make these things, and these things, in turn, will remake our future. “For the industry to remain competitive, we must invest in manufacturing in particular,” notes Williams.

Quoting Dow CEO and Chairman Andrew Liveris, she says, manufacturing matters.

It matters in terms of the jobs it creates and the challenges it can solve. With projected investments in capital projects expected to reach into trillions of dollars across the Middle East over the next decade, there is a clearly a concerted push towards investment of resources with an eye on the big picture.

Unsurprisingly, much of the focus in the region falls into four broad categories: transportation and infrastructure, energy, consumer goods and health and nutrition. It is also no coincidence that these categories correspond with the social and economic ‘global mega trends’ that Dow consciously aligns its innovation efforts and business investments with.

Williams says the West has a lot to learn from countries like the UAE and Saudi Arabia, which have facilitated the growth of manufacturing through legislation and a policy of incentivising growth.

While the company continues to push development in other parts of the world, the Middle East will continue to have a major Dow footprint for years to come.