Dow boosts innovation in Saudi Arabia

Dow Chemical has finalised its plans to invest in innovation in Saudi Arabia through support of the King Abdullah University of Science and Technology (KAUST). A comprehensive cooperation agreement signed this week establishes Dow's Middle East and Africa R&D Center on the university's campus at KAUST.

Markus Wildi heads up Dow Chemical

in the Middle East

Dow and KAUST will collaborate on a range of academic research programs tailored to KAUST's areas of excellence in research and education. In particular, Dow will conduct R&D in the KAUST Innovation Cluster facilities until a permanent Dow facility in the KAUST Research Park is completed. Research will initially focus on water, water treatment technologies and oil and gas, and later expanding to include fields of study pertaining to infrastructure.

Dow will provide opportunities and funding to educate and train citizens of Saudi Arabia. Dow has already offered academic development opportunities and extended permanent offers of employment to KAUST students and will continue to do so. Dow will also provide financial support for research challenge competitions. Firstly, in alignment with Dow's 2015 Sustainability Goals, KAUST will administer the Dow Sustainability Innovation Student Research Challenge Program, which recognizes and rewards students for their innovation and research of sustainable solutions to the world's most pressing social, economic and environmental problems.

Dow's Middle East president Markus Wildi, said, "the Dow R&D Center at KAUST is a reflection of our commitment to the intellectual and human potential of this distinguished institution. Our collaboration agreement lends strong support to the notion that Saudi Arabia will become an engine of innovation and a generator of solutions for modern developmental challenges like clean water supply and sustainable living."

SABIC boosts innovation spend

Saudi Arabia's petrochemicals and polymers giant SABIC is looking to move further into downstream products in the Kingdom as access to cheap ethane feedstock wanes. To support the drive, which includes it looking at investments in polyurethanes, polyamide and other new materials, it will be stepping up its spend on inhouse innovation.

al_Ubaid is driving innovation harder at SABIC

Over the next few years, spending on R&D will grow to more than 2% of sales from the 1% level currently budgeted, according to Abdulrahman al-Ubaid, executive vice president of technology and innovation, speaking to a Bloomberg reporter recently. The story notes that SABIC is building large R&D centres in India, China and Saudi Arabia.

SABIC reported sales of Riyal150bn ($40bn) last year, suggesting innovation spend will rise to over $800m shortly. In its latest report the company indicated it spent $140m on technology and innovation in 2009.

To put that spend into proportion, here are the 2009 R&D spend figures for the top chemical companies, as listed in ICIS's Top 100 companies:

Company            Spend, $m         As % of sales
BASF                  2,004                 2.76
Dow Chemical     1,492                  3.32
LyondellBasell        145                  0.47
SABIC                   140                  0.51
Mitsubishi Chem  1,477                  5.44
DuPont                1,378                  5.27
INEOS                    85                   0.34
Bayer                  1,289                  5.92

SABIC has indicated its plans to move downstream several times to me recently, first at the 2010 K plastics show in Dusseldorf, where I interviewed vice president and CEO Mohamed al-Mady, and again at the ICIS/Booz & Company petrochemicals roundtable in Frankfurt, in which SABIC's executive vice president for corporate strategy and planning, Abdulla Bazid took part.

In 2009, in recognition of innovation’s key role in driving rapid growth, boosting market share and enhancing corporate positioning, SABIC created its Technology and Innovation (T&I) unit as a single, unified global organization, fully aligned with its research and development plans. Technology departments were created within strategic business units and all SABIC technology centers were linked via a virtual network.