MOSCOW (MRC) -- The Dow Chemical Co. and Saudi Aramco has announced a non-binding Memorandum of Understanding (MoU) that sets forth a process for Dow to acquire an additional 15% ownership interest from Saudi Aramco in Sadara Chemical Company (Sadara), as per Hydrocarbonprocessing.
"Sadara is the result of a game-changing partnership between Saudi Aramco and Dow by delivering market-driven solutions that support the diversification of the country’s economy," said Andrew Liveris, Dow’s chairman and CEO. "Increasing our equity stake in this iconic joint venture is a powerful example of our strategic partnership with Saudi Aramco and is yet another accelerator in Dow’s long-term growth strategy designed to capture growing consumer-led demand in our key end-markets of transportation, infrastructure, packaging, and consumer products in developing regions."
Saudi Aramco President and CEO Amin H. Nasser said, "We are proud of our partnership with Dow given its preeminent stature among the world’s leading chemical companies. Dow’s larger stake in Sadara is an endorsement of the Kingdom’s vibrant ecosystem, and signals Dow’s confidence in our partnership as a model of mutually beneficial foreign direct investment. The time is right to fully leverage Dow’s global leadership to further contribute to the Kingdom’s economic transformation in line with Vision 2030."
The potential equity equalization would occur following the later of two events (i) the intended separation of the Materials Science Company, within 18 months after the close of the merger of equals between Dow and DuPont on August 31 and (ii) Sadara’s completion of the Creditors’ Reliability Test, which is part of the limited-recourse financing used to fund the Sadara project development. The anticipated financial impact of the potential transaction is not being disclosed. The Sadara financial structure and governance remain unchanged.
The Sadara chemical complex, the largest of its kind ever built in a single phase, is currently operating all of its 26 world-scale units that manufacture a portfolio of valued-added performance plastics and specialty chemicals. The more than three million metric tons of performance-focused products serving the Packaging, Transportation, Infrastructure and Consumer markets will add new value chains to Saudi Arabia’s vast hydrocarbon reserves, resulting in the diversification of the economy and region.
As MRC informed before, Sadara has recently built a world-scale, fully integrated chemicals complex in Jubail Industrial City 2, Kingdom of Saudi Arabia. The complex is comprised of 26 manufacturing units, possess flexible cracking capabilities and is expected to produce more than 3 million metric tons of high-value performance plastics and specialty chemical products. The first production units came on-line in the second half of 2015, with full production starting in mid-2016. The last unit out of 26 began production in the first half of August 2017.
Sadara Chemical is a USD20 billion petrochemical joint venture between national oil giant Saudi Aramco and Dow Chemical.
The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber. The company"s more than 5,000 products are manufactured at 188 sites in 36 countries across the globe.
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