Sadara Chemical Company and Saudi National Automobiles Manufacturing Company (SNAM) have signed an agreement for an automobile manufacturing cluster in PlasChem Park in Jubail.
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.
Under the agreement, Sadara will work with SNAM’s auto cluster tenants who will include automobile parts manufacturing companies – primarily Original Equipment Manufacturers (OEM) and automotive Tier 1 and Tier 2 manufacturers.
Sadara will also identify potential third-party investors who are able to utilise its specialist chemicals and plastics products to manufacture automotive parts locally, a statement said.
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.”
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Fahd S Al-Dohish, president and CEO of SNAM confirmed that the project will include basic facilities such as a press shop, welding (body) shop, paint shop, and general assembly shop, along with support facilities such as a logistics warehouse, test track, and admin building.
Another one million square metres next to SNAM’s factory has also been allocated for automotive Tier 1 suppliers, he said.
“In order to create a sustainable automotive industry ecosystem, SNAM researched local companies with operations related to automotive industry in order to activate Tier 2 and Tier 3 suppliers who can do business with international Tier 1 suppliers,” he said.
“Another important aspect of SNAM’s plan is to utilise the local resources in manufacturing the automotive parts as much as possible.”
Spread across 12-square kilometres, PlasChem 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.
It can support downstream opportunities in many market segments, including the hydrocarbon resin cluster, ethylene oxide/propylene oxide (EO/PO) cluster, polyurethane cluster and a plastics cluster.
The clusters are expected to attract investments into PlasChem Park across applications such as the production of oil and gas chemicals, construction materials, auto components, animal feed, paints and coatings, and home and personal care products.