The NICDP has identified ‘Chemicals’ as one of five high-growth-potential, export-oriented industries to be part of its Industrial Clusters programme, intended to drive initiatives such as Saudi Vision 2030’s goal of diversifying the economy and increasing the manufacturing share of GDP. The inclusion of chemicals is not surprising, as the Kingdom’s chemical and plastic exports have reached USD $30 billion and comprise 60% of all non-oil exports. In 2016, the Kingdom accounted for 3.6% of worldwide exports of chemicals, excluding pharmaceuticals.
Given the Kingdom’s oil production facilities, petrochemicals are a key part of Saudi Arabia’s chemicals industry. Saudi Aramco, for example, has been a major player since entering the chemicals market in 1998. Additionally, Sadara Chemical Company, a joint venture with Dow Chemicals, has established the Sadara chemical complex, the largest complex of its kind ever built in a single phase, which manufactures a portfolio of value-added performance plastics and specialty chemicals. In 2019, Saudi Aramco acquired the Public Investment Fund’s 70% stake in SABIC, the diversified Saudi manufacturing company whose businesses include petrochemicals, chemicals, and industrial polymers. This acquisition followed the 2018 announcement that Saudi Aramco and SABIC had selected Yanbu on the Kingdom’s west coast as the site for the development of an integrated industrial complex to convert crude oil to chemicals, with the complex expected to start operations in 2025 and to directly and indirectly create an estimated 30,000 jobs.
The Z&Co. team has worked with Linklaters on a number of relevant transactions in the chemicals sector, including: