Key developments in the Saudi cities of Jubail and Yanbu solidify their role as a premier channel of the kingdom’s economic and industrial development

The Royal Commission for Jubail and Yanbu (RCJY) is set to announce 70 investment opportunities for institutions and private companies in the upcoming manufacturing industries conference, says Abdullah Al Eid, director of industrial cluster department at RCJY.

The total investments in Jubail Industrial City has reached $150 billion, including infrastructure, housing and commercial projects, he says.

RCJY has added several activities in the industrial city and allocated some sites for global companies, Al Eid says.

Prince Saud bin Abdullah bin Thunayan, chairman of the Royal Commission for Jubail and Yanbu (RCJY), has approved eight contracts worth SR246.80 million for investment projects in Jubail and Ras Al-Khair industrial cities.

The deals were signed by Abdulaziz Attragi GM strategic planning of the Royal Commission for Jubail (RCJ).

The first deal signed with Showrann Trading Co includes allocating a 20,000 sq m land for establishing a technical factory for plastic pallets and containers through using recycled raw materials. The SR87 million project is expected to provide about 150 direct jobs.

The second contract was signed with Al-Rafid Group to establish a pipeline project in Jubail 2 for the production of multilayer polyethylene pipes with a SR53 million total investment.

The third deal aims to establish and operate a factory in Jubail 2 for bending and shaping metals and manufacturing tanks vessels minerals and metal products.

It was signed with Ankan Engineering Contracting Company with investments worth SR25 million.

The fourth contract includes the allocation of a 8,600 sq m area to Petrochem Middle East Company for the establishment of an industrial project for mixing and filling of chemicals and providing logistics and distribution services with an estimated investment of more than SR20 million.

The fifth deal is related to the establishment of an industrial facility for industrial services and construction in Jubail 2 with SR20 million investments.

The sixth contract aims to establish an industrial facility in Jubail 1 for the maintenance of industrial equipment.

The seventh contract was signed for the production of equipment spare parts and metal shaping in Ras Al-Khair industrial city with an estimated investment of SR20.5 million while the last deal is related to the demolition reconstruction and operation of a gas station for Khonaini Petroleum Services (KPS).

Thus recent significant developments in the Saudi cities of Jubail and Yanbu, operated under a Royal Commission charter, solidify their role as a premier channel of the kingdom’s economic and industrial development. Projects of the Sadara petrochemical complex in Jubail, a $20 billion joint initiative between Saudi Aramco and The Dow Chemical Company, are nearly complete and will begin supplying to global markets including China where there is a particular appetite for plastic products which Sadara will help satisfy.

Official estimates put the investment into Jubail at SR560 billion ($149.2 billion), including SR501 billion ($133.6 billion) from the private sector, according to Attragi.

The RCJ currently manages a total of 91 construction contracts worth SR19 billion ($5 billion) in more than 200 sites, Ahmed Al Balawi, general manager of technical affairs in the RCJ, was quoted as saying in a report.

He points out that future projects in Jubail and Ras Al Khair Industrial City are estimated at SR23 billion ($6.12 billion) over the next five years.

Among the numerous industrial ventures taking shape in Jubail are a reinforcement steel bar facility by Sahm Steel Company at an estimated capital of SR1.1 billion ($293.3 million); a multilayer polyethylene pipe production facility by Al Rafid Group; a fabrication plant for tanks, vessels, minerals, and metal products by Ankan Engineering Contracting Company; a pipe manufacturing and maintenance services facility by K-KEM Engineering Service Company; a pipe coating factory by Asia Steel Factory Company; and a thermal insulation panels factory by Gulf Excellent Group for Contracting and Trading (GCE Group).

Jubail ... model for development

Other industrial projects coming up in Jubail include an industrial machine maintenance facility by Abdullah Ahmad Al Dossary Holding Company; a project by Kanoo Terminal Services for transferring, storing, testing and cleaning of containers; a facility by Basem International Shipping and Logistics Company for transferring, storing and cleaning of ISO tanks; a plant for transferring, heat controlled storage and packaging by Almajdouie Group for Petrochemical Products; and a factory for plastic pallets and containers by Showrann Trading Company.

Apart from industrial developments, these cities are witnessing investments in the gamut of amenities and services required to sustain and support them including housing developments, roads, hotels and even entire model cities.

The city centre of Jubail, for instance, will see the construction of administrative buildings, commercial areas, exhibitions and conference centres, hotels and residential apartments, service facilities, in addition to light rail, said Al Balawi.

Among the landmark projects mooted for the Eastern Province is a new model city comprising residential, economic and tourism complexes, which is being reviewed by the Eastern Province municipality in Saudi Arabia.

The new city, which will be located in Half Moon Bay in Al Aziziyah district, will feature a marina for 650 boats, a conference and exhibition centre and a maritime museum, besides 88,000 housing units, commercial areas, offices, a techno-park and various kinds of public transport.

Scheduled to be completed over a span of 30 years, the new project will be implemented in six stages and will include a technology valley, and a family ‘oasis’.

Last year, the RCJ&Y launched its housing ownership programme 2015 for the staff of Jubail Industrial City.

Aimed at solving the housing shortage in Jubail, the project is expected to be among the largest housing projects undertaken by the authority.

In the healthcare sector, Sulaiman Al Habib Medical Services Group Holding Company will invest SR1.3 billion ($346.7 million) in setting one of the largest and most modern private health projects in Jubail Industrial City and the Eastern Province.

The hospital will include 300 beds and 280 specialised clinics, as well as housing for workers and all the supportive services. Among the projects in the education sector, several contracts were awarded for establishing the Jubail University College (JUC), which is expected to be completed in the first quarter of 2020.

The RCJ has started construction work of the new headquarters of the Jubail University College at Al Mutrafiah district in Jubail Industrial City on a two-million-sq-m area, the first phase of which is expected to be completed by the end of 2019.

The college will accommodate up to 18,000 students and have health and recreational facilities, as well as housing for students and staff.

Comprising almost 50 key Saudi businessmen, the Saudi Venture Capital Group (SVCG) is in a 50-50 JV with ChevronPhillips Co (CPC) which has a world-scale aromatics complex in Jubail.

It is the first big private Saudi JV in aromatics.

Completed in April 1999 and inaugurated in February 2000, it can turn over 500,000 tpy of benzene partly used to produce 220,000 tpy of cyclohexane, a feedstock to make plastics, and 80,000 tpy of gasoline. The complex uses Chevron’s Aromax technology to produce benzene.

The cyclohexane is based on a process provided by Institut Francais du Petrole (IFP). Currently called Saudi ChevronPhillips Petrochemical Co (SCPC), this was Chevron’s first FDI in Saudi Arabia since the kingdom’s oil sector was nationalised in 1980.

Saudi Industrial Investment Group (SIIG), an affiliate of SVCG, is a 50-50 JV with CPC called National ChevronPhillips Co (NCP). NCP has a $4 billion olefins complex at Jubail consisting of a 1.3 mtpy ethane cracker and a number of downstream units.

Several vital projects have also been completed in Yanbu making it a premier refining hub.

Yanbu ... a slew of projects under way

The cities’ combined output of petrochemical and refining products, among other items, feed the needs of local industries, leaving large volumes for export.

They are responsible for more than 71 per cent of total Saudi exports, while the non-oil exports of the commission cities amount to 85 per cent of all kingdom exports in that category.

It is estimated that the Royal Commission accounts for 65 per cent of industrial investment in the entire Gulf region and has a 20.2 per cent average annual growth rate in terms of foreign direct investment (FDI), The two cities are also home to some 630 manufacturing enterprises and the kingdom has benefited from the transfer of technology.

The commission also contributes around 12 per cent to the kingdom’s GDP and to 65 per cent of the domestic industrial output.

In the run up to the completion of the Sadara complex, Sadara signed agreements with E A Juffali & Brothers this year to supply butyl tri-glycol ether (BTG) and methylene diphenyl diisocyanate (MDI).

The chemicals will be required for units in the Juffali chemicals production complex in PlasChem Park in Jubail Industrial City II.

The new Juffali complex will consist of several manufacturing plants designed to produce highly differentiated chemicals and products slated for use in Saudi Arabia’s various industries.

The PlasChem Park is adjacent to the Sadara Chemical Complex and covers a 12 sq km area.

It is a unique industrial platform and a collaborative effort between the Royal Commission and Sadara and is positioned for the development of new value-added downstream manufacturing and business opportunities.

The Juffali BTG project will encompass several speciality chemical products and includes production of about 5,000 tonnes per year of different grades of premium brake fluids, making it the first brake fluid production unit in the Mena region.

Sadara has announced it will sell some tank storage facilities to Jubail Chemical and Storage Services Co (JCSSC) at a cost of around SR1.76 billion ($470 million).

JCSSC, owned by Sabic and Vopak, will provide bulk storage and product handling services to Sadara for 20 years at the King Fahd Industrial Port in Jubail where it has a storage and shipping terminal.

A ramping up of projects in Jubail Industrial City has led to investments there reaching SR560 billion, according to Abdulaziz Attragi, general manager of strategic planning for the Royal Commission for Jubail.

He made the remark during the Royal Commission’s participation in a Saudi-Japanese forum.

Japan was said to account for SR34 billion of investments in Jubail’s petrochemical industry.

Yanbu Industrial City has big plans after achieving investments of some $40 billion in petrochemicals, refining and desalination, says Alaa Nassif, chief executive of the Royal Commission of Yanbu.