Saudi Arabian Basic Industries, the world’s largest chemical company by revenues, is to build a $3.4bn rubber production plant in the kingdom in a joint venture with ExxonMobil.
The joint venture has awarded construction contracts to South Korea’s Daelim Industries, France’s Technip and Spain’s Tecnicas Reunidas, Sabic said in a statement on Monday. The specialty elastomers facility in Al-Jubail, which will produce 400,000 tonnes of rubber a year, will be completed by 2015.
The new plant fits into a wider push by the Saudi government to diversify the economy away from oil and create jobs. It also plays into the development of other industries in the kingdom such as car manufacturing.
The funding for the project will come from shareholders and/or third party debt, according to Sabic.
The facility comes under the umbrella of the Al-Jubail Petrochemical Company, known as KEMYA, which is an equal joint venture between Sabic and Exxon Chemical Arabia, a unit of ExxonMobil Chemical Company.
“The expansion will employ the latest proprietary processes and product technologies to meet the growing global demand for specialty elastomers,” said Neil Chapman, senior vice president, polymers, for ExxonMobil Chemical Company.
As part of the project, the companies plan to launch several educational and vocational training facilities to help prepare Saudi nationals to work in the area of chemical production.
Sabic often works alongside global companies. Earlier this year it announced a joint venture with China Petroleum & Chemical Corporation, known as Sinopec.
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