SAUDI ARABIAN – DOWNSTREAM

COLLABORATION OPPORTUNITIES FOR

JAPANESE COMPANIES

Takeshi Maruyama

SABIC Japan

2ND FEBRUARY 2012

No. 1

CONTENTS

1 – SABIC TODAY 2 – DOWNSTREAM COLLABORATION: Opportunities for Japanese Companies in Saudi Arabia

No. 2

1 – SABIC TODAY

No. 3

HIGHLIGHTS

•Established in 1976, SABIC is one of the top

petrochemical companies in the world

•Total assets over $84.5 billion and annual

revenue exceeding $40.5 billion

•33,000 employees and operations in more

than 40 countries

•More than 60 world-class manufacturing and

compounding plants in locations across the

Middle East, Asia, Europe and the Americas

•Vast array of products including chemicals,

polymers, specialty plastics and chemicals,

fertilizers and metals

No. 4

GLOBAL RANKINGS

Mono-ethylene glycol

MTBE

Granular urea

Polycarbonate

Polyphenylene

Polyether imide

Methanol

Polyethylene

Polypropylene

Polybutylene terephtalate

Engineering plastics and its

compounding

No1

No2

No3

No. 5

Production growth (million tons) SABIC Revenue Growth (billion US$)

613

22

28

47

5659

66

1985 1990 1995 2000 2005 2008 2009 2010

SABIC Growth & Results

Organic and M&A

Growth

SIP

Europe

UK

No. 6

GLOBAL REACH

SABIC operating region

SABIC Global Headquarters (1)

Application centers (2)

Distribution, storage facilities and logistic hubs (46)

International subsidiaries and Sales offices (87)

Manufacturing and compounding companies (60)

Research and innovation centers (SABIC CRI) (1)

Technology centers (15) 60 Manufacturing & Compounding Sites Cos

87 International Subsidiaries & Sales offices

18 dedicated Technology & Innovation Centers

No. 7

SABIC Japan Overview

Osaka Sales Office

Nagoya Sales Office

Tokyo Headquarters

Moka Plant

& Tech

Center

2 Sales Office 1 Manufacturing Site 1 Technology Center

• 40+ year operation in Japan

• Long standing relationship with customers and partners

• 3 office locations: Headquarters in Tokyo, sales offices in Osaka and Nagoya

• Technology Center and Plant in Moka (Tochigi Prefecture)

• 300 employees

No. 8

OUR GOAL

Our goal is clear…

… to be the preferred world leader in

chemicals

No. 9

2 – DOWNSTREAM COLLABORATION: Opportunities for Japanese Companies in Saudi Arabia

No. 10

SAUDI NATIONAL INDUSTRY STRATEGY AN OPPORTUNITY FOR COLLECTIVE COOPERATION

• The national strategy goal of increasing the contribution of industrial

sector to GDP to 20% by 2020 from the current 11% serves SABIC 2020

strategy growth ambition & leadership

• A KSA strategic opportunity for SABIC to play an active role in the

implementation of the national strategy & to deliver on SABIC 2020

strategy ambitions

• The Saudi government is promoting and motivating international

interest to participate in the implementation of KSA downstream

industry strategy leveraging KSA’s market and competitive advantages

No. 11

PRIMARY CHEMICALS GROWTH

Saudi production capacity addition in the past has focused

strongly on primary chemicals

No. 12

THE NEW RANGE OF PRODUCTS

Current and future projects will add a range of performance chemicals and materials

suitable for conversion or processing to components in the downstream value chains.

• Products currently under construction or in planning in KSA

- Cumene, Phenol, Bisphenol A

- Polycarbonate

- Ethoxylates & Ethanolamines

- Saudi Elastomer Project – synthetic rubber, thermoplastic polymers and carbon black

- ACN, NaCN, MMA, PMMA, POM

- Carbon Fiber

- N-Butanol

-Natural Detergent Alcohols

• Product Pipeline

- Polyurethanes

- Acrylic Acid

- Oxo Alcohols

- Acrylates

• These products are targeted at a number of key sectors including hygiene, surfactants,

construction, paints and coatings and the energy sector

• They offer investment opportunities in Saudi Arabia for Japanese chemicals and

materials companies to process these products further into materials, ingredients and

components for a variety of end-use applications

No. 13

KSA CHEMICAL INDUSTRY EXPANSION – POISED FOR DOWNSTREAM GROWTH

Jubail

Rabigh

Riyadh

Sadara

Performance

Products

Amines

Glycol Ethers

Propylene Glycols

Polyether Polyols

Isocyanates

Performance

Plastics

Solution PE

LDPE

Elastomers

Value Park

Water treatment and other

downstream chemicals and

materials

Petro

Rabigh

Polymers

LLDPE

HDPE

PP Homopolymer

PP Copolymer

Monomers Mono ethylene glycol

Propylene Oxide

Sipchem $2.6bn investment

Maleic Anhydride

Butanediol

Vinyl Acetate Monomer

Ethylene Vinyl Acetate

Yanbu

Tasnee $1.5bn investment

Acrylic Acid

Titanium Dioxide

Chlorine

No. 14

PRIORITY DOWNSTREAM CLUSTERS ARE STRONGLY LINKED TO KSA’s CHEMICAL EXPANSION

Automotive

Metals

Processing

Plastic

Packaging

Construction

Consumer

Appliances

Cluster Conversion Process Chemicals and Materials

pipe extrusion, roto moulding, film extrusion, re-

moulding, re-grinding, braiding, transfer moulding,

spiral winding, flexible and rigid foaming

roto moulding, film extrusion, non-woven, blow moulding,

injection moulding compounding, calendering,

component assemble, re-moulding, re-grinding, braiding,

flexible and rigid foaming, systems house

Casting, rolling, milling, turning, extruding,

machining, assembly

film extrusion, co-extrusion, re-moulding, non

woven, transfer moulding, cast and blown film,

injection moulding,

roto moulding, film extrusion, non-woven, blow moulding,

injection moulding compounding, calendering,

component assemble, re-moulding, re-grinding, braiding,

flexible and rigid foaming,

HDPE, LDPE, LLDPE, PVC, PP, PC, EPDM, PU

HDPE, LDPE, LLDPE, PVC, PP, PC, PS, EPDM,

POM, PMMA, ABS, SBR, SSBR, PBR, Halobutyl

rubber, carbon black, carbon fibre, PU

Steel, aluminium

HDPE, LDPE, LLDPE, PVC, PP, PC, EPDM, PS,

PET, ABS, EPDM, PU

HDPE, LDPE, LLDPE, PVC, PP, PC, PS, EPDM,

POM, PMMA, ABS, SBR, SSBR, PBR, Halobutyl

rubber, carbon black, PU

No. 15

GENERIC DEVELOPMENT OF THE DOWNSTREAM VALUE CHAIN

SAUDI ARABIA’s chemicals and materials sectors are ready to supply

the automotive value chain. Many of the plastics processors and

converters already exist in the country.

Raw

Materials

Inter-

mediates

Perform-

ance

products

Converters

Molders

Extruders

Semi-

finished

components

Modules/

sub-

assemblies OEMs

KSA Chemicals Target Anchors

Attracting the anchor investors will facilitate downstream

development in conversion, semi-finished components and

modules/sub-assemblies

No. 16

Japanese COMPANIES COULD INVEST IN THE AUTOMOTIVE VALUE CHAIN AT TIER 1 OR OEM LEVEL

Locally

produced

components

Raw Material

Suppliers

Resin

Manufacturer

Compounder/

Coloring

Converters

Molders

Extruders

Raw Material

Suppliers

Rubber/

Elastomer

Manufacturer

Compounder/

Coloring

Tire , foam,

moldings

Manufacturers

Mines Metal

Manufacturer

Milling,

forming,

casting,

forging

Part/

component /

body panel

Manufacturers

Fully imported

components and

assemblies

Imported

components

Sub Assembly –

differentials,

gearboxes,

engines,

electrical motors

Raw Material

Suppliers

Resin

Manufacturer

Compounding,

blending,

formulating

Coloring

Coatings,

Adhesives,

Sealants,

Elastomer

components

Combined

with Imported

components

Batteries,

wiring loops,

axles,

suspensions

systems

2nd – Tier

Suppliers 1st – Tier

Suppliers

ETPs

Elastomers

Metals

Chemicals

Target Anchors

OEM assembly

line:

e.g. GM, Ford,

US Truck

companies -

Oshkosh, Mack,

Kenworth etc.

Target sectors:

•Private

passenger cars

•Taxis

•Commercial

vehicles

•Ambulances

•Military vehicles

•Fleet owners

KSA Chemicals

Through attracting the anchor

investors, downstream

development will be stimulated

No. 17

TOGETHER, JAPAN AND SAUDI COMPANIES CAN WIN IN DOWNSTREAM

What Saudi Arabia Brings

• Financial resources

• Political stability

• Enabling policies

• Selected competitive advantages

• Highly educated workforce

• Proven track record in economic

development

• Range of competitive materials and

polymers

• Leading oil and chemical industry

cluster

• Knowledge of how to build clusters

from the ground up

• Valuable local project development

experience

What Japanese companies bring

• Technology in the key value chains of

interest to Saudi Arabia

• Established OEMs with global reach

• Supply chain management

• Management skills and capacity

• Supply of services and equipments

• Sophisticated product know-how

• Industrialization knowledge

• Captive markets

THANK YOU