TIDMDOW
The Dow Chemical Company (NYSE: DOW) and the Saudi Arabian Oil
Company (Saudi Aramco) today announced that the Boards of Directors
of both companies have approved the formation of a joint venture
(JV) to build and operate a world-scale, fully integrated chemicals
complex in Jubail Industrial City, Kingdom of Saudi Arabia.
The authorization for the new joint venture, named "Sadara
Chemical Company", comes after an extensive project feasibility
study and front-end engineering and design effort which began in
2007.
Comprised of 26 manufacturing units building on Saudi Aramco's
project management and execution expertise, and utilizing many of
Dow's industry leading technologies, the complex will be one of the
world's largest integrated chemical facilities, and the largest
ever built in one single phase. The complex will possess flexible
cracking capabilities and will produce over 3 million metric tons
of high value-added chemical products and performance plastics,
capitalizing on rapidly growing markets in energy, transportation,
infrastructure and consumer products.
Construction will begin immediately and the first production
units will come on line in the second half of 2015, with all units
expected to be up and running in 2016. Once operational, Sadara is
expected to deliver annual revenues of approximately $10 billion
within a few years of operation and generate thousands of direct
and indirect employment opportunities through the complex and
related investments in downstream value parks.
"Today's announcement is outstanding proof of Dow's ongoing
commitment to our growth strategy," said Andrew N. Liveris, Dow's
chairman and chief executive officer. "This premier partnership is
the right economic ownership model with the right partner. It is
designed to capture growth in the rapidly growing sectors of
energy, transportation and infrastructure, and consumer products by
creating a manufacturing hub that will provide a differentiated
product slate and an advantaged cost position."
Liveris added, "We are bringing the best of Dow's
technology-differentiated and globally leading products to Sadara.
Customers in emerging geographies such as China, the Middle East,
Eastern Europe and Africa will benefit from a strong supplier with
feedstock integration, in-market commercial and supply
capabilities, advanced technologies and resources to grow with
their demand. Taken together, Sadara will deliver significant new
equity earnings to Dow."
Total investment for the project, including third party
investments, will be approximately $20 billion. Sadara will become
an equal joint venture between Saudi Aramco and Dow after an
initial public offering. In addition to equity from the partners,
Export Credit Agencies and financial institutions will provide
project financing to Sadara.
Khalid Al-Falih, president and CEO of Saudi Aramco, said, "This
project represents a key milestone in Saudi Aramco's ambitious
downstream growth strategy. We are pleased to have Dow as our
partner, as they bring a fantastic record of success in the
chemicals business and a top tier brand to the project. Dow also
brings a superior mix of downstream product technologies, and
world-class operational and marketing capabilities to the Sadara
joint venture. These will complement the strengths of Saudi Aramco
as the world's largest integrated and most reliable supplier of
energy and petroleum-based derivative products."
Al-Falih explained, "Many of Sadara's products will be produced
for the very first time in Saudi Arabia. This enterprise will play
a key role in the Kingdom's industrial and economic diversification
while contributing to the creation of thousands of high quality
jobs. It will enable significant development in the country's
conversion industry, thereby supporting Saudi Arabia's ambition to
be a magnet for downstream manufacturing investments that add
significant value to the Kingdom's hydrocarbon resources."
The complex will include a world scale cracker that will be able
to crack a wide range of feedstocks and be supplied by Saudi
Aramco's extensive integrated hydrocarbon infrastructure. Utilizing
Dow's state of the art product technologies and Saudi Aramco's
project management and execution capabilities, the manufacturing
units will produce a wide range of performance products such as
Polyurethanes (isocyanates, polyether polyols), Propylene Oxide,
Propylene Glycol, Elastomers, Linear Low Density Polyethylene, Low
Density Polyethylene, Glycol Ethers and Amines.
Sadara will have responsibility for product marketing within a
local zone of eight countries. Dow will market and sell on behalf
of Sadara to all countries outside of the Middle East zone.
Jubail Industrial City is the largest industrial complex of its
kind in the world. It is located in the Eastern Province of the
Kingdom of Saudi Arabia, approximately 100 kilometers northwest of
Dammam.
Investor and Analyst Presentation & Webcast
Dow will host a meeting with the investment community today,
Monday, July 25, at 10:00am ET to discuss the joint venture and
other matters. The meeting will also be available via webcast and
teleconference. To access the live webcast, visit Dow's website at
www.dow.com and click on the webcast icon, registering at least 15
minutes before the event is scheduled to begin. If you would prefer
to participate via phone, please dial +1 719-457-2604 (conference
title: Dow Chemical 7/25 Conference Call). The accompanying slide
presentation will be available for download on www.dow.com just
prior to the start of the meeting.
About Dow
Dow combines the power of science and technology with the "Human
Element" to passionately innovate what is essential to human
progress. The Company connects chemistry and innovation with the
principles of sustainability to help address many of the world's
most challenging problems such as the need for clean water,
renewable energy generation and conservation, and increasing
agricultural productivity. Dow's diversified industry-leading
portfolio of specialty chemical, advanced materials, agrosciences
and plastics businesses delivers a broad range of technology-based
products and solutions to customers in approximately 160 countries
and in high growth sectors such as electronics, water, energy,
coatings and agriculture. In 2010, Dow had annual sales of $53.7
billion and employed approximately 50,000 people worldwide. The
Company's more than 5,000 products are manufactured at 188 sites in
35 countries across the globe. References to "Dow" or the "Company"
mean The Dow Chemical Company and its consolidated subsidiaries
unless otherwise expressly noted. More information about Dow can be
found at www.dow.com.
About Saudi Aramco
Owned by the Saudi Arabian Government, Saudi Aramco is a
fully-integrated, global petroleum enterprise, and a world leader
in exploration and producing, refining, distribution, shipping and
marketing. The company manages proven reserves of 260.1 billion
barrels of oil and manages the fourth-largest gas reserves in the
world, 279 trillion cubic feet. In addition to its headquarters in
Dhahran, Saudi Arabia, Saudi Aramco has affiliates, joint ventures
and subsidiary offices in China, India, Japan, the Netherlands, the
Republic of Korea, Singapore, the United Arab Emirates, the United
Kingdom and the United States. For more information, go to
www.saudiaramco.com
Note: The forward-looking statements contained in this document
involve risks and uncertainties that may affect the Company's
operations, markets, products, services, prices and other factors
as discussed in filings with the Securities and Exchange
Commission. These risks and uncertainties include, but are not
limited to, economic, competitive, legal, governmental and
technological factors. Accordingly, there is no assurance that the
Company's expectations will be realized. The Company assumes no
obligation to provide revisions to any forward-looking statements
should circumstances change, except as otherwise required by
securities and other applicable laws.
For editorial information:The Dow Chemical CompanyRebecca
Bentley, +1-989-638-8568rmbentley@dow.comorThe Dow Chemical
CompanyGreg Baldwin, +1-989-638-0745gbaldwin@dow.com
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