InoChem Signs a SAR 900 Million Loan Agreement with Saudi Industrial Development Fund (SIDF)

Khair Inorganic Chemical Industries Company (“InoChem”) has signed a SAR 900 million loan agreement with the Saudi Industrial Development Fund (SIDF) to establish an industrial complex in Ras Al Khair Industrial City in the Eastern region to produce the inorganic products soda ash and calcium chloride. The agreement with SIDF was signed by Mr. Saeed Ahmad Basamh, InoChem chairman of the board.

InoChem will build, own, and operate an industrial complex to produce soda ash in two grades (light and dense) and calcium chloride in two grades (77% and 94%). The total production capacity in its first phase, which is expected to startup sometime in 2020, is expected to be 600 thousand tons per annum, making it the first of its kind in the GCC and the largest in the Middle East and North Africa.

Commenting, the CEO of InoChem, Abdulaziz Yahya Al Muaiyyad, said: “This strategic project is perfectly in line with the goals and priorities of the Kingdom’s Vision 2030. It attracts an advanced global technology, and will produce 2 products currently fully imported to the Kingdom using raw materials 100% locally soured from the kingdom’s mineral reserves. Moreover, the project will supply the 2 products to vital industries and operations in the Kingdom, such as oil and gas operations, glass manufacturing and synthetic detergents manufacturing”. Mr. Al-Muaiyyad added “The project will create more than 1,500 jobs, 75% of which will target Saudi talent who will go through a training and qualification plan in accordance with the global standards followed in such industrial projects,” he said.

Al Muaiyyad continued, “What strengthens the project’s strategic position and direction is the cooperation between the private and public sectors through their partnership in its ownership. Sanibel Direct Investments (which is fully owned by the Public Investment Fund) owns a 30% stake in the company, while the remaining 70% stake is owned by a number of reputable Saudi private sector investors.

Wassim Al Khatib, Head of Investment Banking at NCB Capital, said: “NCB Capital is keen on effectively contributing to mega projects that create a quantum leap in the Saudi industrial sector, which will positively affect the Kingdom’s social and economic growth. We are very proud that NCB Capital contributed to the success of InoChem through our financial advisory services since the inception of the Company and successfully arranging the SIDF loan”

Wassim also noted that this is an indication that the Kingdom’s leadership is moving forward in supporting the private sector, especially since the industrial complex will contribute to diversifying the economy by adding new non-oil activities. In addition to creating jobs for Saudis, which is in line with the Kingdom’s priorities to prepare national talent and find appropriate and rewarding job opportunities.

Al Khatib concluded by thanking the management and team of the SIDF for all their support in granting this loan to InoChem. He also praised the efforts of the team at Tarkiz Management & Financial Consulting for their contribution to the success of this financing.

The Royal Commission for Jubail and Yanbu has already allocated an area of 800,000 square meters in Ras Al Khair Industrial City to establish the industrial complex. The area meets all the current and future requirements of the project. InoChem will work effortlessly to meet the growing demand on soda ash and calcium chloride not only in the Saudi market, but also on a regional level.

InoChem was established in March 2016 as a closed joint stock company with a paid up capital of SAR 800 million which was raised through a private placement managed by NCB Capital, the company’s financial advisor.