Lotte Fine Chemical to Establish Production Base in Saudi Arabia

Promotion of European Supply of Goat and Cellulose-Based Products
Saudi Arabia Plans Large-Scale Incentives

[Asia Economy Reporter Oh Hyung-gil] Lotte Fine Chemical is set to establish a fine chemical production base in Saudi Arabia.

On the 17th, Lotte Fine Chemical signed a Memorandum of Understanding (MOU) for business cooperation with the Saudi Ministry of Investment at the Saudi Investment Forum held at the Korea Chamber of Commerce and Industry in Seoul. For the agreement, on the 10th, Vice Chairman Kim Gyo-hyun and CEO Kim Yong-seok of Lotte Fine Chemical held a preliminary meeting with Khalid Al-Falih, Minister of the Saudi Ministry of Investment.

Since 2016, Saudi Arabia has been striving to foster advanced manufacturing industries by establishing 'Vision 2030' and working towards transitioning its industrial structure away from oil dependency.

The Saudi Ministry of Investment plans to offer large-scale incentives to attract high value-added industries such as fine chemicals and electronic materials, in addition to existing oil, gas, and basic chemical businesses. Companies investing in Saudi Arabia will be competitively provided with factory sites, electricity, water, and raw materials.

Lotte Fine Chemical expects to secure market accessibility and cost competitiveness by establishing a production base in Saudi Arabia for its fine chemical and material businesses, including chlorine and cellulose-based products, to expand into Europe.

Lotte Fine Chemical is East Asia's leading ammonia distribution company and is currently Saudi Arabia's largest ammonia purchaser, importing 500,000 tons annually worth approximately 500 billion KRW of Saudi-produced ammonia.

In January, the company signed a business agreement with Aramco for blue hydrogen and ammonia projects, and in October, it proceeded with a contract to introduce the world's first blue ammonia produced by SABIC and Ma'aden into Korea.

CEO Kim stated, "We have built a strong trust relationship with Saudi Arabia through decades of ammonia business," adding, "Based on this, we have advanced cooperation in Aramco's blue hydrogen and ammonia projects and the world's first domestic introduction contract for blue ammonia. We will continue to work closely with Saudi Arabia to secure future growth engines such as high value-added fine chemical businesses."

This content was produced with the assistance of AI translation services.