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Sat 2 Jun 2012 11:25 AM

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Sipchem unit gets $373m loan for plant project

Saudi company inks financing deal with four banks; eyes plant start-up in H2 2013

Sipchem unit gets $373m loan for plant project
(Photo for illustrative purposes only)

Saudi International Petrochemical Company said on Saturday that its affiliate, International Polymers Company (IPC), has signed a Shariah compliant SR1.4bn ($373m) loan deal.

The company, also known as Sipchem, said the financing facilities had been signed with Saudi banks, Riyad Bank, National Commercial Bank, Saudi Hollandi Bank, and The Saudi British Bank.

In a statement to the Saudi bourse, it said the loan was repayable over 2.5 years in semi-annual installments.

The funds will support the project financing of a production plant currently being built in Jubail Industrial City, the statement added.

The plant, which is being built by GS Engineering & Construction Corporation of Korea, will produce ethylene vinyl acetate (EVA) and low density poly ethylene (LDPE) with an annual production capacity of 200,000 metric tons.

Plant start-up is scheduled in the second half of 2013, the company said.

EVA is used as a feedstock in the production of 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.

Sipchem actively develops and invests in petrochemical and chemical industries, both basic and intermediate to produce chemicals used to manufacture a multitude of products.

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