RIYADH — Khair Inorganic Chemical Industries Company (InoChem) has signed a SR1.7 billion Wakala and Forward Ijarah Facility loan agreement with Alinma Bank and Albilad Bank with a tenure of 13 years. The facility’s main purpose is to fund the setting up of an industrial complex in Ras Al Khair Industrial City in the Eastern Province to produce soda ash and calcium chloride, which will be the first soda ash plant in the GCC and largest calcium chloride plant in the MENA Region. InoChem has also secured a SAR 900 million loan agreement with the Saudi Industrial Development Fund (SIDF) at an earlier date.

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 (startup expected during the first half of 2022) is expected to be 600 thousand tons per annum, making it the first of its kind in the GCC.

While commenting on this major milestone, InoChem’s management 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 being imported to the Kingdom using raw materials that are 100% locally sourced 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”. The management also added, “The project will help create more than 1,500 jobs, direct and indirect, targeting Saudi talent who will go through a training and qualification plan in accordance with the global standards followed in similar industrial projects. InoChem plans to reach 75% Saudization levels by the fifth year of operation”.

InoChem’s management further said: “What strengthens the project’s strategic position and direction further is the entrance of Sahara Petrochemicals Company (Sahara) through their equity ownership of 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, the financial advisor and debt arranger to InoChem, said: “NCB Capital has always sought to actively participate in the Kingdom’s endeavor to become an industrial powerhouse and we are very proud to have contributed to the success of InoChem in the field of inorganic chemicals. We are also thankful to SIDF, Alinma Bank and Albilad Bank for endorsing this unique project and supporting InoChem in the financing.” Al Khatib also added “The financing is another example of how the Kingdom’s ecosystem is evolving to support the private sector, in sync with the Kingdom’s objective to diversify the economy towards new non-oil activities”.

The Royal Commission for Jubail and Yanbu has 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 that was raised through a private placement arranged by NCB Capital, InoChem’s financial advisor. — SG