Saudi Arabia’s SABIC to build thermoplastic compounding plant in China

Saudi Basic Industries Corp. has signed a potential investment agreement with the Fujian government in China to develop an engineering thermoplastic compounding plant in the Asian nation.

In a press statement, SABIC said the deal underscores the company’s efforts to meet the requirements of its local customers in China and strengthens the firm’s presence in the country.

SABIC considers China a crucial market for its growth, representing more than 40 percent of global chemical sales.

In addition to the planned engineering thermoplastics compounding plant in Fujian province, the Saudi-listed firm operates the SABIC Technology Center in Shanghai, three compounding plants in Guangzhou, Shanghai and Chongqing, and operations in 17 cities across Greater China.

“This investment agreement marks another significant milestone for SABIC’s growth in China and reflects our continued confidence in investing in the country,” said Abdulrahman Al-Fageeh, CEO of SABIC.

According to the statement, the planned compounding plant will be located in the Gulei Port Economic Development Zone in Zhangzhou, Fujian.

Thermoplastic compounding is the process of combining a thermoplastic polymer with other materials, such as additives, fillers, and reinforcements to enhance its properties and create a customized material with specific characteristics.

The proposed plant will produce pelletized polycarbonate and CYCOLOY resin blends for use in advanced materials tailored to the needs of industries, including electrical and consumer electronics, automotive, and emerging sectors such as solar energy, electrification, and 5G.

Al-Fageeh added: “By creating synergy with upstream and downstream partners, the project aims to strengthen our supply capability in compounding products and serve this important strategic market with innovative and consistently high-quality material solutions.”

The new plant is also expected to create synergies with the Saudi-listed firm’s two existing joint ventures in China, which include SINOPEC SABIC Tianjin Petrochemical Co. Ltd. and SABIC FUJIAN Petrochemicals Co. Ltd. — in the delivery of differentiated solutions and products.

Al-Fageeh further noted that SABIC will continue collaborating with its global and local partners and customers to grow in China.

“The site will include compounding lines, color development capabilities, and advanced equipment that will enable SABIC to work with its customers and partners to create new innovative solutions for engineering plastics,” added SABIC in the statement.

Headquartered in Riyadh, SABIC operates globally, manufacturing a diverse range of products, including chemicals, commodity and high-performance plastics, agri-nutrients, and metals.

Earlier in August, the petrochemical giant said it witnessed an 84 percent year-on-year surge in net profit to SR2.18 billion ($564 million) in the second quarter of 2024.