mikeruge logo small whitemikeruge logo small whitemikeruge logo small whitemikeruge logo small white
  • Home
  • Michael Ruge
  • Recommendations
  • Blog
Show all
0

Saudi petchems agency units up $1.8bn joint venture with South Korean accomplice

Published by Michael Ruge at March 29, 2020
Categories
  • Joint Venture
Tags
  • Joint Venture
  • Joint Venture Account
  • Michael E Ruge
  • Michael Ruge
  • Sharing Profit

Saudi Arabia’s Advanced Petrochemical Company signed a deal with South Korea’s SK Gas to set up two petrochemicals units in the kingdom with a combined value of $1.8 billion (Dh6.61bn).

Advanced Global Investment (AGIC), a subsidiary of Riyadh-listed Advanced and SK Gas Petrochemical (SKGP), a unit of South Korea’s SK Engineering & Construction, have established a JV firm known as Advanced Polyolefins that will construct and operate the plants, parent firm Advanced Petrochemical said in a statement to the Tadawul stock exchange on Sunday.

The plants – a propane dehydrogenation and a polypropylene unit – will be based in the kingdom’s Jubail Industrial City, according to the bourse filing. They will have the capacity to manufacture 843,000 tons of propylene and 800,000 tons polypropylene per annum, respectively.

The founding shareholders will finance 25 per cent of the costs through equity, while the remaining 75 per cent will be funded through bank borrowings, which will be arranged by Advanced Polyolefins.

AGIC will own an 85 per cent equity stake in the JV company, while the remaining 15 per cent will be controlled by SKGP.

The JV partners expect construction to begin in 2021. The plants will be supplied with propane – their main feedstock – by state-controlled Saudi Aramco on a long-term basis.

The financial impact of the investment is “expected after the commencement of commercial operations of the project by [the] second half of 2024”, Advanced said.

Saudi Arabia’s Advanced also signed an agreement to set up a $420 million polypropylene plant in the city of Ulsan in South Korea with local firm PolyMirae in 2018. That is a joint venture in which it owns 30 per cent through its investment company, along with SK Gas and Kuwait’s Petrochemical Industries Company, the company said at the time.

AGIC has already signed a “conditional land allocation” agreement for the project in phase two of Jubail Industrial City. It has also signed licence agreements with US and Italian firms to supply the technology that will run the plants.

Saudi Arabia is expanding its industrial base across sectors to diversify its economy and boost employment for Saudi nationals. The Arab world’s largest economy is encouraging public and private sector firms to form partnerships with foreign investors to increase foreign direct investment in the kingdom, a key pillar of its Vision 2030 economic reform agenda.

Saudi Arabia sealed more than $2bn in investment deals with top global companies and local entities to boost investment in the petrochemicals sector, the Saudi Arabian General Investment Authority (Sagia) said in November last year.

Germany’s BASF, France’s SNF, Japan’s Mitsui, Shell and AMG (Advanced Metallurgical Group) are among the companies planning to invest in Saudi Arabia, Sagia said at the time.

According to the Invest Saudi Fall 2019 report, more than 250 overseas businesses were granted investor licenses in the third quarter of 2019, marking a 30 per cent increase compared to the same period in 2018.

Updated: March 29, 2020 05:41 PM

Michael Ruge
Michael Ruge

Related posts

January 2, 2021

Wizz Air joint venture begins flights to Larnaca from Abu Dhabi


Read more
December 30, 2020

Joint Enterprise Takes on San Diego I-5 Undertaking : CEG


Read more
December 27, 2020

Reliance to purchase out IMG Worldwide from sports activities administration joint venture


Read more

Comments are closed.

Tags

All Ways Solutions AllWaysSolutions.com Bank Account Branding Business Business Marketing Consignment Consultant Consultanting Corporate Record Center Corporate Records Center CRC Deal Making Entrepreneur File Storage Joint Venture Joint Venture Account Make a Deal Marketing Market Research Michael E Ruge Michael Ruge Negotiation Negotiations Record Management Records-Management Records-Management Solutions Record Storage Self Storage Sharing Profit Storage Storage File Experts StorageFileExperts.com Target Markets

Michael Ruge Duncan BC

© 2023 Michael Ruge. All Rights Reserved
Web Development by JustLuvIt
Michael E Ruge | Michael Ernst Ruge | All Ways Solutions | Ruge Charities