Mr. Jamal Malaikah
President and CEO of NATPET
Not many people understand the meaning of the industrial revolution now taking place in Saudi Arabia. You probably use at least ten items on a daily basis that, if not actually produced in, are made using raw materials from Saudi Arabia. Those same ten items, from your children's toys to your car's dashboard, will increasingly be fully produced in Saudi Arabia in the coming 5 to 10 years.
Indeed, Saudi Arabia has understood its full industrial potential from the beginning. Some of the earliest – and most successful - forms of economic diversification in KSA consist of downstream petrochemical production facilities. The reason is obvious: the country's plentiful supplies of oil and gas make for a guaranteed stream of relatively low-cost feedstock. Add to this the country's plentiful financial resources, its strategic location and generous incentives to investors and you have come up with the magic formula.
One of the industries taking advantage this formula to set up shop here is National Petrochemical Industrial Company, known as NATPET. NATPET, which started operations at the end of 2008, chose Yanbu Industrial City, located on the west coast, to build a 400,000 MT/year propylene & polypropylene plant. With a paid-up capital of SAR 1,070 million, NATPET is owned by the Saudi-based Alujain Corporation which holds about 57% of shares; the General Organization for Social Security (GOSI) and other Saudi investors.
As the first to use the state of the art prestigious Lyondellbasell’s Spheripol® process, the company “competes in quality not price, while supplying customers in over fifty countries worldwide,” says COO and president Jamal Malaikah. “We came on-stream in December 2008, as the first producers in KSA to use the new production process. By now others have followed suit, but we still offer the highest quality and the best overall integrated services.”
Malaikah is very proud of his plant's early ISO 9001, Quality Management System, ISO 8001, Health and Safety Management, ISO 22001, Food Grade Safety and ISO 1400, Environment Management and REACH certifications, as well as the company being a winner in the King Khalid Saudi Responsible Competitiveness Award of 2010. “My personal dream is to become the company of choice for employees, society, suppliers and clients - for all stakeholders. I sincerely believe that at the end of the day this is the most profitable and sustainable way to do business. We have more than 400 people working here, more than actually needed. This is because we have heavily invested in training our staff and raising the present and future saudization rate. We don't just need technology transfers; we also need the know-how to use it.”
Himself a Mecca-born Saudi, Malaikah says he would like the world – and specifically foreign investors - to recognize that KSA, as the biggest economy of the region, is worth not only investing in, but “making a long-term commitment to, including the transfer of technology and the creation of training facilities, especially in the petrochemical field. We as NATPET plan to expand both horizontally and vertically. The next step is to move further downstream and set up a converting industry. Instead of exporting the raw materials to convertors abroad and then re-import it, we are looking into converting part of the production locally,” he outlines.
KSA's non-oil exports are still relatively low at $30 billion per annum but Malaikah points out that “we should be able to double that number in less than 10 years.” Like most entrepreneurs – foreign or Saudi - who know the country well; Malaikah is optimistic about the future of KSA: “So much is changing and at such a rapid pace, it is fascinating to watch it all happen. Even just the huge government-led undertaking of infrastructural and economic development includes reforms in many areas that are strictly speaking not economic, such as the judicial and legal systems, education and health care.”
On the social level, Malaikah sees two issues moving: the status of women is improving and there is a general opening up and rejuvenation. “Of course, there are still many challenges, the major one being that we have a deep-rooted culture – we are a society that is very hard to change. It will take time, but it is happening already. Ever more people are becoming aware, for example, that forbidding women to drive is not a matter of Islamic law and does not just affect women: it carries a heavy social, economic and financial price which all of society pays.”
To understand the giant opportunities and the resulting frantic activity currently agitating the petrochemical sector, it is instructive to list the activities of just one of NATPET's competitors. Managing director and CEO Esam Himdy of Sahara Petrochemicals, part of the Saudi Zamil Business Empire, counts off the company's plants: “Al Waha Petrochemical Company, a joint venture with Lyondellbasell, which holds 25% of the shares. Their Jubail plant uses a Lyondellbasell process – Spherizon® - to produce polypropylene products. In its guise of TSOC or Tasnih Sahara Orifin Company, Sahara has another joint venture with Lyondellbasell called the Saudi Ethylene Polyethylene Company (SEPC) which operates one cracker – with a capacity of 1 million ton per year – and two high-density polyethylene plants, also in Jubail.” TSOC moreover runs a joint venture with Dow Chemicals called the Saudi Acrylic Acid Company (SAAC), and will soon produce Sober Absorbant Polymer (SAP) - the main material in baby diapers – in the first plant to use evonic technology in the Middle East. Together with Sabiq, Tasnih and Aramco, Sahara is additionally building a buthanol plant which will distribute its product among the four partners – in Sahara and Tasnih's case to produce acrylates. Finally, continues Himdy, “We also plan to build a caustic soda plant and an EDC plant in a 50/50 joint venture with Maadin in Ras al Zur between 2013 and 2015.”