(MENAFN - Arab News) The Saudi Basic Industries Corporation (SABIC) and the China Petroleum and Chemical Corporation (Sinopec) have signed a protocol of cooperation in Riyadh to explore new business opportunities.
It also confirms their commitment to the principles reached in earlier agreements, including the deal on polycarbonate collaboration, according to a SABIC statement received here.
Prince Saud bin Abdullah bin Thenayan Al-Saud, chairman of SABIC and the Royal Commission for Jubail and Yanbu, and Fu Chengyu, chairman of the Sinopec Group and the Sinopec Corporation, signed the deal.
China Prime Minister Wen Jiabao and SABIC Vice Chairman and CEO Mohamed Al-Mady were also present at the signing ceremony.
The protocol sets the foundation for a joint investment from both SABIC and Sinopec to build the new polycarbonate production complex with an annual capacity of 260 kilo metric tons.
The new facility will be located at the Sinopec SABIC Tianjin Petrochemical Company (SSTPC) in Tianjin, China.
Polycarbonate is an essential material used for producing components for a vast array of consumer, industrial and commercial products ranging from automotive parts, household wares to medical supplies.
The new polycarbonate production will help meet the projected growth in demand for North East Asia, which includes China. Satisfying this demand is essential for producing petrochemical materials from China's vast manufacturing industries.
Speaking after the signing ceremony, Prince Saud said: "I appreciate the respectful relationship and mutual cooperation between the Kingdom of Saudi Arabia and People's Republic of China as well as the efforts of these two countries' leaders to widen this relationship at all levels, particularly within economic and industrial affairs."
He assured the importance of integration between Saudi Arabia and China, especially in the areas of petrochemicals, engineering and construction, especially as these sectors are seeking investment opportunities in both countries.
He added: "SABIC and Sinopec's aspirations are now focused on establishing long-term strategic cooperation that contributes toward enriching Saudi Arabia's and China's economies in the areas of scientific research, technology and innovation, engineering and product marketing."
Prince Saud emphasized that SABIC is keen to continue its investments in China's marketplace generally and one significant aspect of the new project is that it will use SABIC-owned polycarbonate production technology.
The technology mitigates the environmental footprint in the polycarbonate production process.
When the plant is fully operational in 2015, SABIC will become one of the world's largest producers of polycarbonate, significantly boosting SABIC's market share.
The protocol of cooperation, which covers marketing, allows SABIC to supply polycarbonate as feedstock to the company's other plants in China and the Pacific region.
Prince Saud said SABIC is a keen observer of the high growth rates achieved by China.
"We are really impressed by the significant milestones reached by China. We are proud to have entered the Chinese market in the 1980s, supplying the market with our quality products ranging from fertilizers and raw plastic materials to specialty plastic products to meet common human needs, as well as many requirements of the downstream industries."
Prince Saud said the new project, along with the first joint venture with Sinopec, with an annual production capacity of three million tons, will strengthen SABIC's competitiveness.
It could even lay the groundwork for further joint ventures between the two companies, offering more opportunities for two-way exchange of technologies and sharing of markets.
Long-term strategic partnerships will boost the economies of the two countries in the areas of scientific research, technological innovation, engineering, project implementation, product marketing and procurement, he said.
SABIC Vice Chairman and CEO Mohamed Al-Mady said: "China today represents the fastest growing market for SABIC globally. A key success factor in our rapid growth in China is the partnership with Sinopec, and the Protocol of Cooperation represents our commitment to creating sustainable long term success with our partners. We look forward to powering our ambitions in delivering materials that will form the building blocks for China's industries to innovate globally."
Al-Mady said the protocol will strategically strengthen both SABIC and Sinopec as two pioneering companies in polycarbonate production and applications in China.
SABIC brings to China its global expertise and experience in petrochemical research and production.
The partnership complements SABIC's already strong engineered plastics manufacturing presence in compounded resin blends.