The local content development initiative is helping create investment opportunities and facilitate their actualisation through active engagement with potential investors, key market players, and relevant government authorities
Saudi Basic Industries Corporation (SABIC), one of the world’s largest petrochemicals manufacturers, has been leveraging its global networks, industry-leading performance, innovation, and collaboration to support the Made in Saudi programme through its Nusaned™ localisation engine.
The programme launched in 2021 under the patronage of His Royal Highness Crown Prince Mohammed bin Salman bin Abdulaziz is aimed at promoting Saudi-made products and services locally and globally.
It is the main driver to fulfill the Kingdom’s Vision 2030 goals related to economic diversification, and aims at:
• Attracting and enabling foreign Investment in KSA.
• Encouraging local consumers to buy more locally made products.
• Driving businesses to increase their exports to priority markets.
SABIC, 70 per cent owned by Aramco, is a partner of the Made in Saudi programme and a key enabler of Vision 2030.
Although the company has a global network of manufacturing and compounding sites across different regions, the bulk of its production takes place at its plants in Jubail and Yanbu.
From these plants, the company delivers distinctly different kinds of products: chemicals, commodity and high-performance plastics, agri-nutrients, and metals – making it a strong contributor to the Made in Saudi programme.
One of the objectives of the Made in Saudi programme is to enhance the attractiveness of the Saudi industrial sector to domestic and foreign investors.
And SABIC’s Nusaned local content development initiative is enabling this objective by creating investment opportunities and facilitating their actualisation through active engagement with potential investors, key market players, and relevant government authorities.
Launched in 2018, Nusaned provides opportunities for investors, companies, and entrepreneurs, who wish to develop their businesses in innovative and leading industrial sectors. It further aims at raising the level of localisation of industrial technologies, creating new jobs and increasing the volume of Saudi exports.
The initiative is built on four main pillars. Each of the four pillars represents a stage in building a potential opportunity or idea:
• Entema: An opportunity gate to originate, receive and analyse investor opportunities, evaluating them and determining their feasibility.
• Daem, which reflects the real support packages that SABIC offers to enable investment opportunities.
A SABIC packaging unit in Jubail
• Access to finance, where feasible opportunities and financing solutions are identified for commercially feasible projects through Nusaned Investment company and other government and non-government funding entities
• Muahal, where SABIC develops workforce capabilities to support investors (or enable investments).
Meanwhile, SABIC’s investment arm, Nusaned Investment Company, extends financial support to small and medium enterprises to accelerate progress toward the Kingdom’s local content targets.
It invests equity alongside local and international investors to localise mature technologies and pioneer emerging technologies in the Kingdom.
Nusaned Investment’s offerings include direct equity investment in SME’s; and provision of support through strategic, governance, and operational advisory as well as leveraging SABIC’s localisation initiative.
In realising one of the goals of the Saudi Made programme, which is to attract and enable foreign investment in KSA, in 2021 SABIC’s Nusaned initiative successfully localised the production of medical masks when a national company applied SABIC’s polymer solutions to produce N95 masks in Saudi Arabia for the first time.
The SABIC Plastic Applications Development Center (SPADC) in Riyadh
A Chinese company started the first of the fives phases of the largest Nusaned project in Jubail, using 43,000 metric tons of SABIC materials to manufacture electrical and electronics parts for power-saving LED lighting, smart electronics, houseware, and automotive.
On completion of all the phases, the project is expected to contribute $110 million to the GDP, create 233 jobs, and export 70 per cent of the overall production.
SABIC’s investment in R&D has also been very beneficial for localisation in Saudi Arabia. The company’s 19 technology and application centers spread across the world allow it to draw upon the skills of talented research professionals in Saudi Arabia and other global locations.
All these centres, which are managed centrally under the SABIC Technology and Innovation function, have the common goal of developing innovative technologies and technical practices, and supporting SABIC’s business units to develop new, specialised products to enhance growth.
SABIC has been the mainstay in converting gas associated with oil production to valuable marketable products, which have enabled the development of a wide range of local downstream industries.
These industries have contributed to increasing employment in Saudi Arabia and have steadily boosted the Kingdom’s economy.
An example of SABIC’s encouragement and enablement of local industries is the polymer and plastics conversion industry in Saudi Arabia.
SABIC chemicals are also used directly for the production of plastics, for example PET, which is converted to beverage and water bottles in Saudi Arabia.
SABIC’s chemical operations have led to the production of important ingredients for use in downstream applications, for example, automotive fuel components, adhesives, coatings, pharmaceuticals, insecticides and cosmetics.
Its synthetic rubber project is helping in the development of a rubber industry in Saudi Arabia and is providing new opportunities and markets in the automotive and construction sectors.
INNOVATION & SUStAINABILITY
SABIC is committed to innovation and sustainability as key pillars for its growth. Bearing testimony to this was the conversion of oil from plastic waste to certified circular polymers in the country, making SABIC the first company in Mena to commit to it.
Declaring this, Eng Abdulrahman Al-Fageeh, SABIC CEO and Executive Member of the Board, said at the announcement of the company’s Q2 results: "In addition, we successfully completed the first certified commercial shipments of low-carbon ammonia to India and Taiwan, reflecting our determination to deliver meaningful solutions for our customers and to advance markets for important net-zero solutions like low-carbon ammonia."
In Q2, SABIC’s revenue reached SAR37.17 billion ($9.91 billion), while net income totaled SAR1.18 billion, an increase of 79 per cent versus Q1.
The company maintained its sales volume in Q2 despite challenging economics environment with increased supply in its main products.
Building on momentum from Q1 2023, SABIC announced several important strategic developments in Q2, continuing the company’s progression towards carbon neutrality and being the preferred world leader in chemicals.
In Q2, SABIC joined forces with numerous global organisations and partners to address global challenges with innovative, sustainable and circular solutions.
First, SABIC, along with BASF, Covestro, Dow, and others signed a sustainability agreement with renowned Dutch innovation organisation TNO, which will host an R&D Hub to make significant progress toward sustainable plastic waste processing and help advance mechanical and chemical recycling routes.
Also of note from Q2, SABIC was awarded a 2023 Sustainability Leadership Award for Exemplary Achievements in Circularity by the American Chemistry Council (ACC), recognising the company’s pioneering efforts to integrate ocean bound plastic (OBP) into the circular economy.
SABIC also released in Q2 its 2022 Sustainability Report, which highlighted SABIC’s progress on key sustainability commitments, including advancing the circular economy, ensuring responsible chemicals management and increasing Environmental, Social and Governance (ESG) disclosures. These commitments are significant strides towards SABIC’s carbon neutrality goals.
By Abdulaziz Khattak