National Petrochemical Industrial (NATPET) has signed a contract with the US company Schulman to build a polypropylene (PP) compounding plant near NatPet’s PP manufacturing complex at Yanbu with a capacity for 100,000 mt./year of compounds in two phases.
The first phase will require an investment of US$70.9 million and will be funded 40% through equity and the remainder through debt from sources including the Saudi Industrial Development Fund as well as other local banks.
The new plant, to be located near NATPET facilities in Yanbu industrial city, will produce 100,000 tonnes of PP products per year, which is to be split into two phases, according to the SPA.
Saudi Industrial Development Fund (SIDF) and other local banks will finance next phase.
The joint venture will allow them to service a wide range of customers globally and take advantage of growing demand on such products used in the manufacture of household appliances, auto and furniture industry to the Middle Eastern, African and Indian subcontinent markets, the agency said quoting a press release.
In addition to the joint venture, NatPet also entered into a distribution agreement under which A. Schulman will, effective immediately, distribute resins for NatPet in Europe to specified customer segments. NatPet’s manufacturing complex is designed to produce 400,000 mt./year of PP.