(tradearabia) -- Jeddah-based National Petrochemical Industrial Company (Natpet), a subsidiary of Alujain Corporation, has entered into a joint venture agreement with A Schulman of the US to produce polypropylene compounds.
The 50-50 joint venture, expected to be named Natpet-Schulman Engineering Plastic Compounds, is planning to build a polypropylene compounding plant in Yanbu, where it expects to begin production by the end of calendar-year 2014.
A Schulman's initial equity investment in the relationship is approximately EUR11 million, or approximately $14 million.
Initial project costs, including construction of the facility, infrastructure needs as well as working capital requirements are approximately EUR55 million, or approximately $70 million based on current exchange rates.
Beyond the initial equity investment by the partners, the joint venture intends to take advantage of various low-interest loan options provided by the Saudi Industrial Development Fund and other lending institutions.
The joint venture will manufacture a line of customer-preferred engineered plastic compounds based on A. Schulman's highly regarded technology. Natpet, a well-established petrochemical producer in the region, will provide the joint venture with its regional infrastructure as well as its high-quality polypropylene resin.
MRC