Chemanol expansion in final stage.

With five new plants expected to be completed soon as part of its most ambitious expansion, Methanol Chemicals Company (Chemanol) is accomplishing backward integration and the capability to ship substantially more volumes to overseas markets. Instead of buying methanol, which goes into the manufacturing of its downstream products, the company will produce it at a lower cost, enabling it to become more competitive in international markets The company, formerly Saudi Formaldehyde Chemical Company, will produce from its latest expansion the following products: methanol, carbon monoxide, acetaldehyde, methylamines (MA), dimethyl formamide (DMF), pentaerythritol and formaldehyde. The SR2 billion ($533 million) expansion programme doubles total capacity to nearly 1 million tonnes of formaldehyde, derivatives and other downstream methanol-based products. The methanol capacity of 231,000 tonnes per year will be entirely consumed internally to produe downstream products. With the expansion, Chemanol will become one of the world's most integrated formaldehyde and derivatives producers with the largest capacity in the Middle East and Africa.

Technologies Chemanol obtained proprietary-licensed technology for its new pentaerythritol facility from Swedish firm Perstrop AB, a world leader in the manufacturing of polyhydric alcohols and other specialty chemicals. Methanol and formaldehyde technologies came from Haldar Topsoe. Acetaldehyde technology was obtained from Libra Techcon of India. Technology for the MA/DMF facilities was provided by Davy Process Technology, UK, while Larsen & Toubro, the Indian engineering company, was responsible for engineering, supplies and construction management of the MA/DMF plant. Chemanol, standing for Chemicals from Methanol, was established in 1989 under its old name and enjoyed revenues of approximately $125 million annually. Revenues will be boosted substantially once normal commercial operations from the latest expansion begin.

Meeting Saudi and GCC objectives "Chemanol is a true manifestation of the objectives of the Saudi Ministry of Industry & Electricity and the GCC, which jointly encourage industrial cooperation between its citizens," a company spokesman said. "Its business model is based on utilisation of the kingdom's natural hydrocarbon resources to achieve substitution of imports by establishing petrochemical units to manufacture downstream products and the implementation of export-oriented projects using the vast industrial infrastructure made available by the government of the Kingdom of Saudi Arabia." Chemanol was founded in 1989 by Mazen Khalifah Allahiq Alnaimi. Other founding shareholders include Al Zamil Holding Co and Y B A Kanoo of Saudi Arabia, Fahd Al Nafisi of Kuwait, Al-Mazrui Holding Co of the UAE, Mohammed Jalal & Sons Co of Bahrain and Mohammed Al Mana of Qatar. "The company's vision is to create value from natural gas, not just burn it or sell it as methanol," Alnaimi says. Commenting on the new name Chemanol, Alnaimi said it strongly underlined the vision of the company of leveraging natural gas resources by using methanol for downstream products that add value to the industry, the country and its customers." The company, which exports to more than 50 countries, recently transformed itself into a closed Saudi joint-stock company.

World-class manufacturer "Since its inception, Chemanol has earned the reputation of being a world-class, dependable and quality-conscious manufacturer possessing a very sophisticated marketing and logistical support system to which many GCC and overseas customers can testify," the spokesman commented. "The company is committed to advancing its leading position in specialty chemicals by way of investment and by undertaking primary research and development work to produce tailor-made product formulations that meet specified customer requirements, particularly in the field of amino resins. In-house research has facilitated development of several special product grades which reside in the domain of guarded technology," he added. Chemanol utilises technologies from reputed companies. The formaldehyde units are based on the modern Excess Air (iron oxide) process of Haider Topsoe of Denmark whereas the Continuous Liquid Phase Process of Libra APL has been used in the HMT plant. The Thin Film Evaporation/Vacuum Drying Process of Libra APL has been employed for making paraformaldehydes. The Spray Drying Technology of APV Nordic Anhydro (Denmark) has been used in the urea/melamine resins unit. "Chemanol plants are specifically designed for steady, sustained operations and are equipped with distributed digital control-based electronic instrumentation which greatly enhances the speed and precision of operational control," the spokesman said. "The utility, urea handling and product dispatch units are also controlled automatically by PLC-based instrumentation. The entire manufacturing facility is fully automated to ensure environmentally clean, safe and efficient round-the-clock operations." The plants meet the environmental regulations of the Royal Commission for Jubail and Yanbu and the safety standards set by the High Commission for Industrial Security. The company's quality system conforms to ISO 9001-2000. Chemanol's entire operations are consolidated through SAP-based ERP system.

Good progress The company has come a long way since work began on constructing a small plant in 1991 when the first Gulf war was raging and when there were no privately owned companies worth the name in Saudi Arabia. Between 1993 and 1995 Chemanol doubled its formaldehyde capacity and, as a way of diversifying its products, started to produce hexamine which is used in a range of industries including rubber, pharmaceuticals and mining. In 1998 it diversified into resins and super-plasticisers. In just 18 years it underwent 18 capacity expansions manufacturing methanol and premium-grade methanol derivatives that have diverse applications including agricultural fertilisers, pharmaceuticals, solvents, intermediates, laminates and the wood industry, plastics, paper and the production of various types of concrete admixtures.

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