When SABIC bought GE Plastics for $11.6 billion in 2007, it wasn’t clear what the Kingdom’s aspirations in plastics were. It’s becoming clearer that Innovative Plastics fits into a plan to make Saudi Arabia a Tier One producer of engineering plastic compounds that will feed automotive and other suppliers also based in the Kingdom.
In the most recent manifestation, SABIC awarded the KraussMaffei Group an order is to equip a new Plastics Applications Development Center (SPADC) in Riyadh, Saudi Arabia. The order includes injection molding machines from the C3 and EX series as well as extrusion lines for PVC tube, profile and sheet extrusion and twin-screw extruders from KraussMaffei Berstorff. There will be 150 researchers housed in the SPADC as part of a goal to boost the role of Saudi universities.
The focal point for applications development at GE Plastics had been in Pittsfield, MA and Bergen op Zoom, the Netherlands. There are also company-owned research sites in Bangalore in India, Shanghai in China, Seoul in Korea and Moka in Japan. Now add Riyadh to that list. The center is expected to be up and running later this year.
The SABIC Polymer Processing Development Center in Pittsfield is cavernous, but it will be dwarfed in size by the Riyadh facility, which will have about 463,000 square feet in building space. Compare that to about 96,000 in the Pittsfield facility.
Another major recent manifestation of the Kingdom’s plans was a joint venture with A. Schulman to produce and sell around the world highly engineered polypropylene compounds. SABIC also signed a technology agreement with Montefibre to independently make and sell carbon fiber. SABIC makes its plan clear in its Annual Report: “We are looking to achieve rapid market entry with product from a world-class plant in the Kingdom of Saudi Arabia.”
Of course, SABIC is also growing in Asia, as evidenced by its agreement last year with the China Petroleum and Chemical Corp. Sinopec to collaborate on polycarbonate production.
But it seems that development of sophisticated manufacturing technology, particularly, auto focused, is a Saudi Arabian goal.
One clue is SABIC’s equity investment in INPRO, a joint venture for collaborative innovation in automotive production that includes Daimler, Siemens, ThyssenKrupp, and Volkswagen. The focus is on lightweight manufacturing and zero-defect production, with R&D directed toward new production technologies for the electric and hybrid vehicles of the future.
It’s interesting and impressive how much the Saudi plans have developed since I visited the country’s embryonic plastics industry in 1988, which was then based on production of commodity plastics from natural gas feedstocks that had previously been flared.