sadara spotlight: site and enterprise readiness · uhde china . 11 sadara’s ... polyurethane...
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Dow.com
The Dow Chemical Company Sadara Spotlight: Site and Enterprise Readiness
Hosted by The Dow Chemical Company and Sadara Chemical Company
March 20, 2014
Agenda
2
Building the Enterprise
Building the Site
Marketing and Selling Sadara’s Products
Highly Competitive and Profitable Investment
2
3
Birth of Sadara
DOW
Technology
Marketing & Ops Expertise
SAUDI ARAMCO
Feedstocks
Mega-Project Expertise
4
Sadara – Key Project Milestones
2011
Q3 Q4
Board
Authorization
JV Formation
Construction
Begins
2012
Q3 Q4
100% of EPC
Contracts
Awarded
Marketing &
Sales
Agreement
2013
Q2
Financial
Close
2014 2015
First Plant RTO
First Product
2016
Full
Production
COMPLETED
5
Sadara’s Priorities
Financing
Staffing
Building
Preparing to operate
6
Sponsors Facilitated Sadara’s Funding
Diversified Funding
Saudi Funding Sources $4.4B ECAs
$7B
International Banks
$1.1B 65% Debt ~$12.5B
35% Equity ~$6.8B
Sadara’s Debt / Equity
-
5
10
15
20
$B
35% Equity ~$6.8B
65% Debt ~$12.5B
7
Sadara’s Priorities
Financing
Staffing
Building
Preparing to operate
8
Sadara – Staffing Levels
356
2018
3869 3862
3444
0
1000
2000
3000
4000
2012 2013 2014 2015 2016
Number of Sadara Employees:
9
In Kingdom On the Job Training
Riyadh Refinery
SAMREF
Yanbu Refinery
Jeddah Refinery
Shedgum
Juaymah NGL Ras Tanura
Berri
Abqaiq
SASREF
Haradh
Khursaniyah
Hawiyah
Uthmaniyah Yanbu NGL
Over 900 Trainees in various Saudi Aramco Facilities
10
Out of Kingdom On the Job Training
Over 800 Trainees in various Dow and Dow JV Facilities
Fort Saskatchewan
Midland
Seadrift
Freeport St. Charles
Plaquemine
Estarejja
Terneuzen Stade DCG
Kuwait
Map Ta Phut
UHDE China
11
Sadara’s Priorities
Financing
Staffing
Building
Preparing to operate
12
Building
Sadara Enterprise
Sadara Complex
PlasChem Park
On Schedule. On Budget. Very Safely.
13
Sadara – A Game Changer
Specialty Films
Household Products
PU Systems
Adhesives/Sealants
Paints & Coatings
Laminates
Oil & Gas Chemicals
Detergents
Water Treatment
Cables
Construction Material
Misc Compounding
Furniture/Insulation
Automotive Fluids
Auto Components
Co
nve
rsio
n P
ark
Products
Ch
em
ica
l P
ark
Intermediates Raff-1
Pygas
Pyoil
Ethane
Naphtha
Polyols
PE/Elastomers
Isocyanates
Propylene Glycol Amines Glycol Ethers
EO/PO
Market Segments
Sa
da
ra PlasChem Park
14
PlasChem Site & Layout
Sadara
Park
Chemical Park
Conversion Park
N Chemical
Park
Reactive Chemical Industries
PlasChem
Downstream Industries • Formulators • Plastic
Converters
15
Sadara’s Priorities
Financing
Staffing
Building
Preparing to Operate
16
Sequencing of Site Start-Up
Phased Start-up Sequence Lowers Risk and Increases Operational Success
Ethylene and Polyethylene
EO / PO Envelope
Polyols, Isocyanates, etc.
2015
17
Preparing to Operate
Transitioning from program to enterprise
Ensuring supply chain readiness
Implementing marketing & sales strategy
Commissioning utilities and third party facilities
18
Collaborating at Unprecedented Levels
Sadara
JCP (Solids Ports) N
Note: Map is illustrative and not to scale
SAAC
KFIP (Liquids Ports)
SASREF
SATORP
Saudi Kayan
SChem
NIGC (Gas) Ar Razi
19
Collaborating at Unprecedented Levels
SEC Electrical Power
Marafiq Industrial Water
Waste Water
Saudi Aramco/Affiliate Benzene &
Toluene
NIGC (GAS) Oxygen,
HP N2 & LP N2
Linde Hydrogen,
CO & Ammonia
JV with Tasnee & Saudi Kayan
Butanol
Ar Razi Methanol
SASREF Naphtha
JV with Solvay Hydrogen Peroxide
Enhanced Jubail Pipeline Networks
20
Enterprise Summary
Leveraging on unparalleled strengths of sponsors
Implementing aggressive human capital development program
Securing captive off-takers in PlasChem Park
Creating value and strengthening reliability through collaboration
and partnerships
Progressing on schedule, on budget and very safely
Agenda
21
Building the Enterprise
Building the Site
Marketing and Selling Sadara’s Products
Highly Competitive and Profitable Investment
21
Project Scope for Sadara
22
The largest chemical complex ever built at one time
Build 26 process plants plus third parties
Produce 3 million tons of products per year
Introduce specialty chemical products for the first time in
the Kingdom
Generate $6 - $8B revenue annually
Support PlasChem customers
22
Jubail’s World Class Infrastructure
23 23
Solids PortSolids Port
Liquids PortLiquids Port
Residential CommunityResidential Community
Potential Site LocationPotential Site Location
Some of the names already in Jubail
Some of the names already in Jubail
Some of the names behind the names
Some of the names behind the names
Many companies have already invested in Jubail; however, the IK based company names may not be readily recognizable.Many companies have already invested in Jubail; however, the IK based company names may not be readily recognizable.
NorthNorth
SASREFSASREF
SATORPSATORP
Saudi Saudi KayanKayan
SipchemSipchem
SATORPSATORP
SASREFSASREF
SabicSabic
PetrokemyaPetrokemya
PetrokemyaPetrokemya
Solids Port
Liquids Port
Residential Community
Sadara Site
Location
Jubail Industrial
City II Jubail
Industrial City
Enough to build 1.5 Golden Gate bridges
Sadara Quantified
24
Enough to build two causeways to Bahrain
Sadara Quantified
25
Enough to build two lines from Jubail to Jeddah
Sadara Quantified
26
Enough to link Jubail with London
Sadara Quantified
27
Mixed Feed
Cracker
Plastics
PO & Derivatives (Propylene Oxide)
EO & Derivatives (Ethylene Oxide)
Isocyanates
C5+Naphtha
Ethane
Benzene
Toluene
Ethylene
Propylene
Benzene
Toluene TDI
PMDI
Butyl Glycol Ethers (BGE)
Amines (EOA and EAE)
C4s
Pygas
Solution PE Train 1
Solution PE Train 2
HP-LDPE Train 3
Elastomers Train 4
C8+
Polyols
Propylene Glycol (PG) C5s
Cust
om
ers
& P
lasC
hem
Park
Configuration
Aromatics Hydrogenation & Extraction
28
29
Construction: On Track and On Budget
30
Construction: On Track and On Budget
Utilities
68% Construction
31
Construction: On Track and On Budget
Cracker
68% Construction
32
Construction: On Track and On Budget
Polyethylene
68% Construction
33
Construction: On Track and On Budget
Isocyanates
48% Construction
34
Construction: On Track and On Budget
Import / Export
Facilities
40% Construction
In Kingdom Content
35
Awarded $5.3 billion in In Kingdom contracts
Awarded $700 million to local manufacturers
Established first time manufacturing
− Emerson – Control Valves
− Rosemount – Transmitters
− Kubota Radiant Coils
Expanded manufacturing for:
− Cable Tray (Enduro and Al-Abdulkarim Holdings)
− Fiberglass (Future Pipe)
− Electric Motors (TECO Westinghouse)
− Cooling Tower Assem. and Finishing (SPIG SpA)
35
Execution Excellence
36
Results
• Maintain schedule
• Optimal cost
• Quality execution
• Long-term operational efficiency
• Long-term profitability
Detailed front end engineering & design
Innovative contracting and procurement strategy
Overarching program governance
Strategic project staffing
Market knowledge
• Strategic partnership
• Execution expertise
• Marketing & Sales
Best in Class Safety Performance
37 37
Reco
rda
ble
Cases
0.00
0.05
0.10
0.15
0.20
0.25
0.30 Ja
n-1
3
Feb
-13
Mar
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
No
v-1
3
De
c-1
3
Tota
l Re
cord
able
Inci
de
nt
Rat
e
Threshold 0.20
Meets Target 0.16
Far Exceeds 0.12
2013 Aramco Goal 0.28
Overall Program Progress
38 38
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Actual Construction % Actual Enggineering Actual Engineering
46%
98%
Summary of Program Update
39
Safety initiatives are delivering best in class results
Closely monitoring quality and achieving targets
Construction mobilization continues: 48,000+
Program is on schedule
Delivering within the budget
39
Agenda
40
Building the Enterprise
Building the Site
Marketing and Selling Sadara’s Products
Highly Competitive and Profitable Investment
40
Enabling Sadara Success through Dow’s Expertise
Marketing & Sales
Dow’s Expected
Regional Volume Split
Asia Pacific: ~60%
Middle East & Africa: ~15%
Europe: ~15%
Other: ~10%
• Flexible, robust marketing plan
• Generating customer excitement
o 70% of plastics capacity o Pre-marketing activity
• Organization design underway
o Commercial structures o Leveraged and dedicated
resources
• Supply chain infrastructure
o Global design complete
41
Sponsor Strengths >> Design & Construction >> Go To Market
INFUSING VALUE ACROSS ALL FRONTS
Asia Pacific Prepares for Sadara Volume
Topsafe terminal in Dongguan
Sinotrans warehouse in Shanghai
Westports terminal in Malaysia
Superior logistics arrangement and consistent supply enable Dow to be a better solution and product provider
42
Strong Geographic Growth
43
Performance Plastics Franchise Targets Growth Opportunities in Low Share Regions
2018 2012
13% 13%
Share of Demand
Western Europe
2018 2012
4% 2%
Share of Demand
China
2018 2012
5% 2%
Share of Demand
2018 2012
5% 3%
Share of Demand
Rest of Asia
Eastern Europe
2018 2012
5%
Share of Demand
MEAF
2018 2012
2% <1%
Share of Demand
Antwerp
Warsaw Moscow
Gebze Sadara
Dubai
Durban
Nhava Sheva
Singapore
Shanghai
Tianjin
India
Dow Sadara
6%
44
Performance Materials Growth Opportunities
Amines, Butyl Glycol Ethers
• Address growing demands of the Consumer, Industrial, Construction, Agriculture, Electronics and Coatings markets
• Balanced and flexible product mix to meet customer needs
• Delivers innovation by utilizing next generation reductive amination technology for amines products
Polyurethanes: MDI, TDI, Polyols
• Expands Dow’s service offering and the diverse set of polyurethane applications across Furniture and Bedding, Automotive, Transportation and Construction market segments
• Delivers differentiation and innovation
• Supports Dow’s Formulated Systems growth and customer base
Targeted growth in strategic market segments across Asia Pacific, Eastern and Central Europe, Africa, India
45
MDI: Dow’s Share of Demand Pre- and Post- Sadara
2018 2012
16% 15%
Share of Demand
Western Europe
Sadara
Eastern Europe
2018 2012
27%
Share of Demand
30%
2018 2012
6% 4%
Share of Demand
North Asia
Dow EMEA & APAC share of demand to increase from 10% in 2012 to 12% in 2018
Dow Post-Sadara
Middle East & Africa
2018 2012
15% 12%
Share of Demand
2018 2012
12% 11%
Share of Demand
Southeast Asia
46
Planning for Marketing & Sales Success
Integrated teams fully engaged for optimal collaboration
and success
Fully prepared to successfully market and sell Sadara
products upon start-up
Pre-marketing activity for all products progressing on
schedule
47
Agenda
Building the Enterprise
Building the Site
Marketing and Selling Sadara’s Products
Sadara: Enabling Dow’s Growth in Emerging Regions
48
Strong economics and financing model
Premier partnership focused on long-term growth
World-scale operations supported by strong back-integration to extensive integrated hydrocarbon infrastructure
Tailored product mix designed to target high-growth, high-margin end-markets
Uniquely located in the middle of the fastest growing regions
Sadara: Enabling Dow’s Growth in Emerging Regions Commencing a New Era of Growth
49