Initiatives like the in-Kingdom Total Value Added Program (IKTVA), which is on track to ensure that 70% of all spending and procurement in Saudi Arabia is local by this year—2021, as well as Nusaned (an NGO and localization engine developed in Lebanon by the Saudi Basic Industries Corporation or SABIC), and the Kingdom of Saudi Arabia’s National Industrial Development and Logistics Program, mean that companies with local operations will have a significant business advantage over those that simply serve the region with imports.
“The new operation in Dammam [Saudi Arabia] will take advantage of local sourcing throughout the value chain and position Colonial Chemical, M.E. Arabia as a preferential source of product and services for customers in that region,” explains David Anderson, President of Colonial Chemical, Inc., in today’s press release announcing the start of construction on the new manufacturing facility.
“Along with shorter lead times,” says Anderson, “Colonial Chemical M.E. Arabia will also offer the benefit of toll blending and manufacturing which is a highly desirable function in this market.” (Toll blending is essentially contract manufacturing of specialty chemicals.)
“We have built mutually beneficial relationships in the past few years with our local investors in this new operation and are all excited to see our plans move forward,” he says.
Colonial Chemical to begin manufacturing specialty surfactants in Saudi Arabia later this year
According to the company press release, the new Dammam facility will begin manufacturing in Q4 of 2021.
The company plans to source raw materials locally for the production of amine oxides, quaternary ammonium compounds, hydroxypropyl sultaines, betaines, propionates, ether carboxylates, imidazolines, phosphate esters, EPI-sulfonates, and phosphates.
The new chemical plant will cover some 9 acres of land and include office space for professionals in supply chain and customer service, labs for R&D and formulations teams, warehousing, a tank farm, pilot scale equipment, toll blending and mixing vessels, reaction vessels, and distillation columns, according to the press release.
In Saudi Arabia, Colonial Chemicals will serve a spectrum of industries, including the oilfield industry, lubricants, water treatment, paint, coatings, household, and personal care, among others.
The Colonial Chemical M.E. Arabia facility is a collaboration among Colonial Chemical Sadeem Investments and Earth’s Reservoir for Oil and Gas (EROG).
“Colonial Chemical, Inc. is providing the technology and operations knowledge for the plant while Sadeem Investments and EROG are responsible for local operational oversight and construction support,” states this week’s press release. “The Board of Directors overseeing the joint venture is headed by David Anderson, Colonial Chemical, Inc. President, as the Chairman. Mohammed Abduldaim, EROG President, is the Vice-Chairman, and other members include Dr. Peter Chetcuti, David Anderson Jr and Douglas Wynn.”