Sadara, SNAM sign pact on PlasChem Park clusterby Martin Menachery on Feb 15, 2017
Sadara Chemical Company and Saudi National Automobiles Manufacturing Company (SNAM) recently announced that they have signed a cooperation agreement for SNAM's planned automobile manufacturing cluster in PlasChem Park.
Under the agreement, Sadara will work with SNAM’s auto cluster tenants who will include automobile parts manufacturing companies – primarily original equipment manufacturers (OEMs) and automotive Tier1 and Tier2 manufacturers – and identify potential third-party investors who are able to utilise Sadara’s slate of specialist chemicals and plastic products to manufacture automotive parts locally.
Spread over an area of one million square metres, the auto cluster is expected to be the largest manufacturing cluster to be located in PlasChem Park, an industrial zone located adjacent to the Sadara site in Jubail Industrial City II. The park is being developed in collaboration with the Royal Commission for Jubail and Yanbu and will consist of downstream chemical and conversion industries supplied with products from Sadara and others in Jubail.
Commenting on the agreement, Ziad Al-Labban, CEO of Sadara, said: “This is an exciting partnership for us as it will help drive development of an emerging sector within Saudi Arabia’s downstream manufacturing industry. Our specialty chemical products can be utilised by third-party investors to make components used in automobile manufacturing. With SNAM on board, we have a catalyst for manufacturers to come in and quickly begin to realise value on their investments.”
Speaking on behalf of SNAM, Dr Fahd S Al-Dohish, president and CEO, commented: “The project will include basic facilities such as a press shop, welding (body) shop, paint shop, and general assembly shop, in addition to support facilities such as a logistics warehouse, test track and admin building. Furthermore, another one million square metres next to SNAM’s factory has been allocated for automotive Tier1 suppliers.”
Dr Al-Dohish added: “In order to create a sustainable automotive industry ecosystem, SNAM researched local companies with operations related to automotive industry in order to activate Tier2 and Tier3 suppliers who can do business with international Tier1 suppliers. Another important aspect of SNAM’s plan is to utilise the local resources in manufacturing the automotive parts as much as possible.”
PlasChem Park is a 12-square kilometre industrial park in Jubail Industrial City II dedicated to downstream chemical and conversion industries. PlasChem Park is a key element differentiating Sadara from other petrochemical, chemical and plastic manufacturing projects in Saudi Arabia.
The park is uniquely positioned to enable and support downstream opportunities in many market segments, including the hydrocarbon resin cluster, ethylene oxide/propylene oxide cluster, polyurethane cluster and a plastics cluster. Collectively, these clusters are expected to attract diversified investments into PlasChem Park in an array of downstream applications such as the production of oil and gas chemicals, construction materials, auto components, animal feed, paints and coatings, as well as home and personal care products.