A SAUDI International Petrochemical Company (Sipchem) subsidiary, International Polymers Company (IPC), has signed a financing agreement of SR704 million ($188 million) with Saudi Arabia’s Public Investment Fund (PIF) to support financing of a  greenfield ethylene vinyl acetate (EVA) and low density polyethylene (LDPE) plant. 

Annual production capacity will be 200,000 tonnes at its industrial complex in Jubail Industrial City. Plant start-up is scheduled in Q3 2013.

The agreement was signed by Abdulrahman M Al Mufedhi, director general of the Public Investment Fund, and Abdullah S Al Saadoon, Sipchem president for operations. EVA is used as a feedstock for make heat soluble adhesives, resin products and high-quality sports bandages while LDPE is used as a feedstock in the production of various types of containers, bottles and medical detergents. IPC is jointly owned by Sipchem (75 per cent) and Hanwha Chemical Corporation (25 per cent).

The loan is repayable over 14 years in 26 semi-annual and equal installments commencing December 2014.

IPC signed last year a SR600 million loan agreement with Saudi Industrial Development Fund and a SR1.4 billion loan with four major Saudi banks.

Sipchem manufactures and markets methanol, butanediol, tetrahydrofuran, acetic acid, acetic anhydride, vinyl acetate monomer and carbon monoxide through its various affiliates. It has been listed on Saudi Stock Market since 2006.

The company has launched several down-stream projects to manufacture ethylene vinyl acetate, low density polyethylene, ethyl acetate, butyl acetate, cross linkable polyethylene and semi conductive compounds that are scheduled to start in 2013.

Meanwhile, Sipchem and Sahara Petrochemical Company have announced they have begun studies for a possible merger.