Strategic Joint Ventures for Clients

Sadara Chemical
[ joint venture of Saudi Aramco ( 65% ), a US $320 Bil multinational, and The Dow Chemical Co. ( 35% ), a US$57 Bil multinational ]
This substantial undertaking started as a US$20 Billion spend by Saudi Aramco upon its public announcement in 2011. It focuses upon performance, value-added chemical and plastics products. Sadara will produce polyeurethanes, propylene oxide, propylene glycol, elastomers, linear low-density polyethylene, low density polyethylene, glycol ethers and amines. Principal Asset Base shall be 26 production plants at the Jubail Industrial City II in the Eastern Province of Saudi Arabia. Actual production will initially commence by 2015 and all plants were projected to be online by 2018.

Saudi Arabia is plowing billions of dollars into developing its petrochemical industry in a bid to add value to its vast hydrocarbon resources - - to create jobs for its young and growing population.

Technical range includes Amines, Glycol Ethers, Isocyanates, Polyether Polyols Polyethylene, Polyolefin Elastomers, and, Propylene Glycol. Product-Market Applications span Transportation (Automotive parts, maintenance fluids) ; Construction (Pipes, Adhesives & Sealants) ; Packaging and Containers (Food & non-Food) ; Consumer Goods (Foam for Furniture + Bedding / Rigid for Appliances) ; Adhesives & Sealants ; Coatings (wide range of coatings for industrial, maintenance and marine applications) ; Oil & Gas (Pipeline Coatings, Sour Gas Treatment) ; and, Electrical & Electronics (Wire & Cable, Insulation).

Target Revenue by geographic regions include Asia-Pacific (60%), Middle East & Africa (15%), Europe (15%), and the remaining 10% would be distributed for sale to the Americas.

The joint venture as planned will yield an estimated EBITDA margins of 35-40 % and “Average ROE” for Dow of approximately US$500 Million annually during the first 10 years following start-up. Positive cash flow shall emerge to Dow within 5 years of launch. By far the largest operating partnership we ever were asked to support, but undeniably staffed by dozens of experts globally spanning corporate finance, partnership structuring & valuation, cash flow modeling, leadership composition development, organization structuring + phased staffing, phased revenue generation & development of distribution models in relation to manufacturing assets, plus, assessment of risks & testing of economic outcomes. Undeniably a very complex case for which to design an overlay, plan & forecast.