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Saudi Arabia looks to recruit global plastics processors



Guangzhou, China -- Saudi Arabia made a push at the recent Chinaplas fair to recruit plastics processing companies to the kingdom, as it tries to diversify its economy and build on its large resin manufacturing sector.

A delegation of economic development officials came to the massive industrial fair in Guangzhou to hold public and private meetings aimed at convincing companies in China's huge plastics industry to look at Saudi Arabia.

The kingdom, for example, is investing in ready-made industrial facilities to lure those firms and was touting government-funded training programs in plastics and rubber processing, along with financial incentives, said Abdulrahman Shamashir, director of the industrial cluster department for the Royal Commission for Jubail and Yanbu.

The country is trying to build industrial clusters in the port cities of Jubail and Yanbu and piggyback on its large resin industry to create jobs in downstream industries like plastics, he said. The need for jobs is high: About 50 percent of the population is under 25 and many people are well educated, he said.

"We cannot continue selling our feedstocks to other countries and they make products, and then they go and sell it back to the kingdom," Shamashir said. "We have to bring the know-how, train, increase the employment and gain the extra margin these will bring."

The trip is part of a multiyear effort to recruit from various industries worldwide and is not limited to China or plastics. The commission typically does recruiting trips with large trade shows and has visited fairs in London, Los Angeles, Düsseldorf and Seoul, among others, Shamashir said.

"We look at Europe, the USA and as well at China, Korea and Japan," he said. "We want to bring the countries that have the know-how and technology."

Royal Commission staff at the briefing estimated that Saudi Arabia imports 80 to 90 percent of the plastic and rubber products it uses.

There are other efforts ongoing to boost Saudi Arabia's plastics processing base.

In February, for example, Sadara Chemical Co. -- a joint venture of Dow Chemical and state-owned Saudi Aramco -- and Saudi National Automobiles Manufacturing Co. announced an agreement to try to bring plastics and specialty chemicals companies to a planned industrial park in Jubail for automotive parts.

Materials suppliers Clariant and A. Schulman have also in the last two years announced investments in masterbatch and compounding facilities in Yanbu, in joint ventures with Saudi companies.

Shamashir said the kingdom has a goal of boosting the private sector to 50 percent of GDP by 2030, up from 23 percent now.

"Currently the kingdom is heavily dependent on oil, and it's the time to go and improve the localization of the industry and the contribution of the private sector," he said.

Saudi Arabia, which has 30 million people, in 2015 had 931 plastics and rubber processing factories employing 91,000 people, according to the Saudi Industrial Development Authority.

Shamashir said the kingdom is the largest economy in the Gulf Cooperation Council and is centrally located between Europe, Asia and Africa.

He said a lack of information about Saudi Arabian economic conditions is a "major challenge" commission recruiters face.

"Always when we meet with our investors we face the reality that the majority of the international business groups, they lack the information about what Saudi Arabia offers and what is the working environment and what is the market," he said.

Judging by turnout at the public forum at Chinaplas, it has work to do.

Only three people, including a journalist, showed up for the event in a large hotel ballroom next to the Chinaplas fairgrounds during the second day of the fair. The fair reported 155,000 attendees over its four days.

"We know we have low participation today, but it's not the end of it," Shamashir said. "Tomorrow we are at the conference, the exhibition and visiting some industries. We already had talks with some big manufacturers in the country.

"Always business development is very hard," he said.

Saudi Arabia, which has 30 million people, in 2015 had 931 plastics and rubber processing factories employing 91,000 people, according to the Saudi Industrial Development Authority.

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