February 2012Factory Producing Steal Castings for Petrochemical Plants Completed in Saudi Arabia A Talk with Members of the Materials Research and Development Department of Kubota's Materials Division and the JBIC Office in West Japan
On November 16, 2011, a ceremony was held to mark the completion of a manufacturing plant for Kubota Saudi Arabia Company, LLC (KSC), a joint venture firm of a Japanese company and a local company, in Dammam, Eastern Province, Saudi Arabia. This plant, which was built using a loan co-financed by JBIC and a private financial institution, manufactures the heat-resistant alloy tubes that are essential for petrochemical plants. The plant began operations in February 2011 before the completion ceremony, and is expected to serve as a center for the supply of products for other Middle Eastern countries, North Africa and Europe, as well as Saudi Arabia.
Saudi Arabia Has High Expectations for Plant
KSC is a joint venture firm established by Kubota Corporation and Saudi Arabian investment firm Tharawat Development Company in Dammam, Eastern Province, Saudi Arabia, in December 2009. Since then, work has been underway to build a plant to manufacture cracking tubes of heat-resistant alloy for petrochemical plants. Manufacturing began in February 2011 and operations have proceeded smoothly.
Mr. Masayuki Tomita, Group Manager of the Engineering Group, Materials Research and Development Department of Kubota's Materials Division, explained the process". Petrochemical plants make ethylene, propylene, and other chemical products by thermally cracking down the raw materials naphtha and ethane in heat-resistant tubes that have been heated up to about 1,000°C. This means that cracking tubes are essential to petrochemical plants."
Kubota boasts the highest share of the global market for cracking tubes. Up until this point, the company has expanded its manufacturing bases in Japan (Hirakata City in Osaka, Toba City in Mie Prefecture), Canada and China. KSC was established with the aim of selling these cracking tubes in the North African and European markets, as well as the Middle East market, by setting up a manufacturing base in Saudi Arabia, where the petrochemical industry is experiencing dramatic growth on the back of the region's rich crude oil and gas reserves.
At the same time, the abundant production of raw materials is leading to the rapid reinforcement of the petrochemical industry in Saudi Arabia. For Saudi Arabia, which is promoting petrochemicalrelated industries and focusing on the development of high value-added products and job creation, this project is expected to lead to long-term job promotion, as well as providing an opportunity to learn about Japan's advanced technology.
The completion ceremony was held locally on November 16, 2011, attended by representatives from Japan and the partner company, as well as many people from the local provincial government and business partners. JBIC Deputy Division Chief Kuniyasu Kanamori reflected that he really felt the enormity of the expectations that Saudi Arabia had placed in Japan's manufacturing sector.
Manufacturing Base for European and North African Markets
The plant, built in Dammam 2nd Industrial City, is equipped with a high-frequency furnace to dissolve the raw materials, centrifugal casting equipment that makes the tubes by running the molten metal through revolving cylindrical molds, and equipment for internal processing, fabrication and welding. This enables the plant to handle every step of the manufacturing process for cracking tubes for petrochemical plants.
According to Kanamori", Saudi Arabia is Japan's biggest supplier of oil, and an important partner providing us with about 30% of imported crude oil. Going forward, JBIC hopes to provide further support for businesses that will sustain and enhance the international competitiveness of Japan's industry in a way that deepens and develops the economic relationship between Japan and Saudi Arabia."