By Simon Robinson, Singapore
Singapore – Three systems houses are negotiating with Sadara to build facilities on the Al Jubail Conversion Park, Peter Harrison, manager of conversion parks projects told delegates at the ICIS Polyurethane Chain conference in Singapore.
The systems houses will have access to polyols and isocyanates produced over the fence in the Plaschem part of the Sadara joint venture between Dow Chemical and Saudi Aramco, he told delegates.
“We are looking to build a polyurethane cluster in the park. Polyurethane has a number of supply chain models, but the predominant one is the systems house model, which formulates systems to support small fabricators. At the same time we’re trying to attract large converters also to the park.”
The product slate at Sadara includes MDI, TDI and polyether polyols. “We believe that offers a great platform for conversion industries, SMEs, to come to Saudi Arabia and convert products in Saudi Arabia, rather than exporting all these products overseas and to their respective markets,” added Harrison.
“We are looking to attract companies that can convert these into the conversion park part of the area. They’ll be making foams, adhesives and sealants, and potentially making formulations for other applications such as shoe soles. These [Sadara] products open up new markets which have been underdeveloped in the past in Saudi Arabia and the GCC generally,” he said.
About 12km2 has been set aside for the construction of downstream industries, he said.
“A lot of the products made at the conversion park are not going to be for export. Saudi Arabia has a population of 27m and the country’s economy is growing at 4% year-on-year and the population is also growing. The other GCC States take the population up to 42m consumers. Throwing the nest wider to include Iran, Iraq and Egypt the number of consumers rises to around 300m, all of these are geographically close to Saudi Arabia.
Harrison said he is working with a number of key industries, including construction."There are $1.7tn projects in the region, of that $800bn is in Saudi Arabia,” he said. “There’s a lot of investment in cities, health universities, residential housing. The population is growing rapidly in the region and that's fuelling demand for construction.”
“Saudi Arabia is now beginning to take energy efficiency seriously,” he told delegates. “It’s better to sell the product [energy] overseas than to subsidise their own internal energy needs. This is leading to better insulation in buildings in Saudi Arabia and across the GCC. Spray foam is also seeing growth," said Harrison.
There are also opportunities for flexible foam in bedding and comfort foams will have a big potential opportunity in the region, according to Harrison. “There are foam producers in the region, but they have a relatively low level of sophistication and we believe that there’s opportunities for the large slabstock makers to come in and revolutionise the industry,” he said.