DUBAI: Saudi Arabia's National Industrialization Co. (Tasnee) has begun talks with banks to secure financing for a $1.5 billion to $2 billion acrylic acid plant, according to a report. HSBC, Tasnee's financial advisor, is talking to local banks while discussions are also ongoing with export credit agencies in Korea and Germany, Middle East Economic Digest said on its website. The firm will seek financial commitments in the first half of 2011, the London-based magazine said. It is looking for a mix of US dollar and Saudi riyal loans. The acrylic acid plant is expected to cost SR4 billion ($1.1 billion) and start production of about 230,00 tons a year by the first quarter of 2013. In October, a consortium of South Korea's Samsung Engineering Co and Germany's Linde won an early construction deal for the plant. Saudi subsidiaries of Tasnee Sahara Olefins Co (TSOC) - a joint-venture of Tasnee and Sahara Petrochemicals Co - own 75 percent of the complex and 25 percent belongs to US-based Rohm and Haas, recently bought by Dow Chemical. Acrylic acid is used as a feedstock for its water-based acrylic products used to manufacture detergent additives, paints, coatings and adhesives among other products. Petrochemicals stocks account for about a third of the market capitalization of Saudi Arabia's bourse and are seen as a proxy for the kingdom's oil sector, which remains state-owned. “Oil prices are holding up well and that is reflected in petrochemical prices,” said Ankit Gupta, senior research analyst at Securities & Investment Co in Bahrain.
