TOYO ENGINEERING LANDS SAUDI PETROCHEMICAL CONTRACT

There is another indication that Japan-Saudi relations may be strengthening. The Nihon Keizai Shinbun has reported that Japan’s Toyo Engineering Corp. has just landed a contract worth about US$ 402 million to build an ethylene glycol plant for the Saudi Basic Industries Corp. (SABIC). SABIC is 70% owned by the government of Saudi Arabia.

The plant will be located on the west coast of Saudi Arabia at the Yanbu Industrial City. When it is completed in 2008, it will be the largest such facility in the world and will allow SABIC to surpass Dow Chemical as the world’s largest supplier of ethylene glycol.

Toyo Engineering has already had experience building ethylene glycol plants in Saudi Arabia, and the current project is in fact their fourth. News of the new contract caused the value of the Toyo Engineering stock to soar over 7% higher in value.

Ethylene glycol is used to produce polyester fiber which eventually becomes clothing and plastic bottles. SABIC believes that in the future most of its production will be exported to the Chinese market.