INDUSTRIAL INNOVATION
Developing the best financial mechanisms for growth is just as important to building out the country’s biggest industrial players as adopting the latest technological innovations.
We shifted our ownership of Cristal to Tronox and now own 25.4% of the combined entity. Our future return from this will be better than what we got from Cristal for a simple reason, which is money is always made upstream. Tronox is big in the mining of ilmenite, rutile, and zircon. By merging we achieved synergy with the full downstream and upstream, a merger that works financially in our favor, as the price is decided by the market. We move into the upstream through cash and shares. Tronox also benefited because they have a feedstock surplus and a product shortage. We were the opposite. By combining the two, we are both now balanced. Another benefit for both companies is that we use some of the best chloride-based technology in the world. Normally, combining technologies of two large companies can be complicated; however, as we are both chloride-based, we have a great synergy. Our international presences
MUTLAQ H. AL-MORISHED
Local sourcing is done only in the petrochemical sector. Typically, the petrochemical industry does not mix with petroleum companies, with the recent takeover of SABIC by Saudi Aramco the notable exception. The global oil companies are diversifying their chemical assets. Some try to return with shale gas, but that is opportunistic and not necessarily strategic. Chevron, Texaco, BP, and other big players were into chemical products 15 to 20 years ago, but today they have left behind a lot of their chemical operations. In refineries, they have selectively maintained chemicals at a minimum level, and only for specific purposes. Our push for Tasnee is not to diversify or maximize, but rather to increase shareholder value by either growing the company to reflect a higher share price or by giving more dividends. Being the biggest is not what is important; being the most profitable is the name of the game. If you look at the creative structure of Tronox, it is one of the first from this part of the world. We merged part of a Saudi company with a New York-based company for equity and cash, all of which took great financial engineering ingenuity.
MHAM
We recently signed a partnership with Ma’aden for fertilizer production technology at a new plant. As part of this, Ma’aden will use the dual-pressure ammonia process developed by thyssenkrupp Industrial Solutions in a new ammonia plant at its existing fertilizer complex. The process is already being used with great success in the first two ammonia plants, which are highly reliable and eco-friendly. This dual-pressure ammonia process reduces energy consumption by up to 4%. Since 1994 alone, thyssenkrupp Industrial Solutions has developed and built new ammonia plants with a total production capacity of more than 14 million tons. This new plant in Saudi Arabia will have a capacity of 3,300 tons of ammonia per day and is scheduled to be completed in early 2022. We also have strong relationships with other partners in the fertilizer sector, such as SABIC. Our technology was able to increase the capacity of their plant from 3,300 to 3,600 tons, making it one of the largest operating plants in the world. ✖
VH
Abdullah Al-Zahrani
MANAGING DIRECTOR & CEO, SAUDI MECHANICAL INDUSTRIES (SMI)
advanced and new manufacturing, robotics, AI, and more.
Modern Mining Holding Company formed a joint venture with Trafigura to develop an integrated multi-metal smelter project that will primarily recover copper, zinc, lead, and other precious/minor metals. The complex will be established at Ras Al-Khair Mineral City. Trafigura already maintains strategic relationships with all of the leading global miners and smelters as an off-taker/supplier of metal concentrates and marketer of refined end products. Furthermore, Trafigura owns significant interests in copper, zinc, and lead smelters, including a controlling stake in Nyrstar, the largest zinc smelter in the world. This multi-billion-dollar complex will create significant value-added products and is aligned with the Kingdom’s industrialization drive under Vision 2030. Saudi is already a major user of copper, zinc, and lead, and the project’s output will mainly satisfy local and regional demand. There is also considerable emphasis upon unlocking the Kingdom’s mining resources, which has huge potential. The mining sector currently contributes about USD17 billion to national GDP. Under Vision 2030, the mining sector is
ABDULAZIZ BARAKAT AL HAMWAH