Downstream Petrochemicals

The growth of Saudi Arabia’s downstream/petrochemicals capacity resulted from the growth of its oil & gas industry and has played a key role in building Saudi Arabia’s industrial and manufacturing base. Saudi Basic Industries Corporation (SABIC), majority owned by Saudi Aramco, is today the largest chemical company in the country and operates some of the largest petrochemical and plastics production facilities in the world. The U.S.-Saudi Business Council has worked closely in this sector since its formation and continues to partner with SABIC and other major players in the industry.

“The USSBC is strengthening trade relations between the U.S. and Saudi Arabia by promoting business opportunities on both sides. By continuously facilitating business meetings, the USSBC is also engaged in enhancing normal relations between people and exchanging their cultural heritage. Obviously, we support this initiative which benefits all parties.”

I would like to thank the U.S.-Saudi Business Council and its professional staff for doing a great job, supporting the business community with timely and valuable business information, arranging effective trade missions, and releasing sector reports. The USSBC is one of our dependable partners.

“The U.S.-Saudi Business Council has and continues to provide important services to Saudi Aramco by providing many opportunities to expand the capabilities of local service providers through introducing new partnership opportunities between U.S. manufacturers and service providers and their Saudi counterparts.”

“Our business experience with the USSBC is that it plays a vital role in bringing together business leaders and key decision makers. The dynamic management of the USSBC performs their jobs with a vision and objective to serve all parties involved and in all respects equally and professionally.”

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Overview

Saudi Arabia is among the world’s leading producers of petrochemicals and home to one of the most advanced chemicals industries, including specialty chemicals, conversion, engineering plastics, and rubber production. Under Vision 2030, the Kingdom has ambitious plans to grow the sector even further and double its size by 2030, unlocking new opportunities for investors who may also enjoy a cost-competitive environment and a strong ecosystem that includes world-class universities, R&D centers, suppliers, infrastructure, and logistics.

SABIC, majority owned by Saudi Aramco, is the largest chemical company in Saudi Arabia and a global leader in the production of petrochemicals and plastics. Enabled by low feedstock costs and large-scale capacity expansion in recent decades, the petrochemical sector is a vital pillar of the Saudi economy. Chemical exports, of which petrochemicals command the largest share, represent 35 percent of non-oil exports. Potential for further growth remains significant as a large share of Saudi domestic production consists of basic chemicals while more advanced specialty products are produced in other markets. Government investments in technology, production capacity, and gas exploration in line with Vision 2030 have supported broad growth in both feedstocks and downstream production.

Petrochemicals are used in numerous manufacturing industries such as plastics, pharmaceuticals, automotive parts, agrinutrients, and textiles. Major international firms remain integral to further developing advanced and specialty petrochemical products through joint ventures, which enable knowledge and technology transfer. Sadara Chemical Company, a U.S.-Saudi joint venture between Dow Chemical and Saudi Aramco valued at $20 billion, represented the largest investment in the Saudi petrochemicals industry. Petrochemical projects remain well-financed in Saudi Arabia, representing the largest share of lending from the Saudi Industrial Development Fund (SIDF). The petrochemical sector benefits from favorable incentives and lower taxation compared to regional competitors. Business opportunities for industry leaders include research, technology, and JVs across the sector’s value chain.