The Future Impact of Saudi Arabia’s Vision 2030 on Adhesives, Sealants & the Transportation Sector

Posted on 12/6/2017 10:18:00 AM By Dan Murad
  

In May 2017, the United States and Saudi Arabia announced an initiative toward bilateral job growth, mutually beneficial trade agreements, and sustainable, scalable economic diversification beyond oil and gas production―through technological and business innovation.

The Kingdom of Saudi Arabia (KSA) has identified the following five industrial clusters (IC) on which to focus:

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Under Chemicals & Polymers, the Saudi Paint & Coatings Committee (SPCC) was launched during the Saudi-U.S. CEO Forum, which coincided with President Trump’s first visit to Saudi Arabia.

To date, SPCC has formed subcommittees whose members have already voted in their respective subcommittee chairs. I have been voted in as the chair of SPCC’s Technology Institute and Coatings Academy (Training & Education) subcommittee. The Academy charter is to advance paint and coatings’ know-how and to provide training and education at various levels of the value chain.Following the trajectory of ChemQuest’s Technology Institute, SPCC’s Technology Institute will begin as a Testing Lab, expand into a Certification Lab, and in the final stage will emerge with full capabilities as an Applications & Development Center―with the same robotics application equipment as the ChemQuest Technology Institute.

I am also the chair of the Saudi Paint & Coatings “Center of Excellence Cluster Plug & Play Services” subcommittee.

Among many other objectives, the Saudi Vision 2030 seeks a 70% increase in manufacturing capacity in the region by 2030. Adhesives and sealants’ stakeholders in the OEM transportation sector will benefit from these developments in several important ways:

  • SPCC’s charter will be an outstanding blue-print for establishing other downstream industries to include adhesives, sealants, inks, textiles, nonwovens, plastics, and personal-care and home-care products, which use similar value chains as the paint and coatings industry. Under my direction, SPCC’s Coatings Academy will offer training and certification of trades professionals, chemists, and other end users. ChemQuest will continue to offer a complementary track of Institute for Manufacturing Technology & Applied Material Research (IFAM) training courses for adhesive bonding in critical applications to ensure maximum reliability and a qualified workforce to meet the needs of a dynamic, global industry.

     

  • The Automotive Cluster is underway: four OEMs are expected to produce an estimated 39,000 heavy-duty commercial vehicles by 2022. At peak volume, one of the four (Isuzu Motors) plans to export 40% of its OEM fleet. Tier 2 and tier 3 automotive suppliers also have a presence in Saudi Arabia and will continue to grow and expand in areas such as plastic injection molding and windshield production. Automotive OEM parts and assemblies – as well as materials ranging from synthetic rubber (for tires), carbon fiber, Nylon 66, ABS, polyurethane, composites, and sheet metal – are in production. Downstream industries have begun producing oil filters, circuit boards, batteries, cabling, sensors, adhesives, paints, composite parts and assemblies, trims and seats. In addition, a new plant will be built for producing automotive powertrains and die cast structure components.

As cited in my previous blog post, these materials make up a significant portion of the chemistry content of light vehicles in North America.Saudi Arabia’s cars and trucks are all currently imported. In 2016, Saudi Arabia imported 800,000 units (light vehicles), with Toyota having around 34% of share followed by Hyundai-Kia, General Motors, and Nissan-Renault. Moreover, Saudi Arabia has the largest market for light vehicles in the Gulf Cooperation Council (GCC), which includes Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. The GCC has annual car sales of over 1.56 million, highlighting the potential of Saudi Arabia as being the regional hub of car production, especially if potential exports to the 400 million consumers in the Middle East – North Africa region are factored in.

The global transportation industry is central to a growing global economy in terms of market value, sustained employment and driving advances in materials and technology.  Albeit early in the process, the Automotive Cluster has a few successes. Plans for a light vehicle manufacturing plant are being evaluated by potential investors.

I strongly encourage the adhesives and sealants community in North America – especially end users – to contact me (or to leave a comment) to learn more about the Saudi Arabia Vision 2030 and its long-term implications on vehicle production, imports/exports, assembly processes, education, training and certification, industry standards and joining technologies.This is a rare opportunity to get ahead of the curve.

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Jim Swope of ChemQuest – pictured (3rd from left) – is among a select group of 23 top business leaders granted a license at the Saudi-U.S. CEO Forum in Riyadh on May 20, 2017.