Dow Wins Saudi Trading License
Dow Chemical has become the first foreign company to receive a trading license from the government of Saudi Arabia. The status allows the US group to hold a 100% stake in the country’s trading sector and gives it the chance to add wholly owned companies to its growing string of local partnerships.
The awarding of licenses is seen as a step in the Saudi government’s strategy to diversify its economy and cope with the challenges of declining oil revenues. Dow stressed that the trading license is expected to create additional employment opportunities for the highly educated Saudi workforce, with a particular focus on improving women’s participation.
With more than 500 employees in Saudi Arabia, Dow is the kingdom’s largest foreign investor. It has a long history of joint projects with Saudi companies, including the mammoth complex operated by Sadara, a jv with Saudi Aramco, which is gradually bringing plants on stream at Jubail.
When complete, Sadara will operate a 1.5m t/y multi-feed cracker – the first of its kind in the Middle East, capable of cracking both naphtha and heavy oil – along with downstream polyethylene lines with total capacity for 1.1m t/y, in addition to plants for polyurethane feedstocks. The site is planned to reach full run in 2017.
“Dow has been a strategic partner in Saudi Arabia for nearly 40 years and we look forward to playing a key role in helping advance the Saudi’s Vision 2030 plan designed to create a vibrant society and a thriving diversified economy,” said CEO Andrew Liveris.
Along with the honors in Saudi Arabia, Dow may have another reason to look at the Middle East with some degree of business satisfaction. News emerged this week that Kuwait’s attorney general will open an investigation into potential irregularities related to state-owned Petrochemical Industries Company’s eleventh-hour cancellation of the planned joint venture with the US group, K-Dow, at the beginning of 2009.
The government said it plans to take action against the “perpetrators” who obliged the Kuwaiti state to pay a cancellation fee of nearly $2.2 billion to Dow and see the group sever ties with other local companies.
The scrapped joint venture was to build plants for polyethylene, ethyleneamines, ethanolamines, polypropylene and polycarbonate, along with related licensing and catalyst technologies. Dow is in the process of severing all ties with the country.