In its first plant venture outside of Tennessee, Colonial Chemical Inc. is partnering with a Middle East oil and investment firm to build a specialty chemicals manufacturing plant in Dammam, Saudi Arabia.
The new facility is designated as Colonial Chemical M.E. Arabia and is a joint venture with Sadeem Investments and Earth's Reservoir for Oil and Gas. The $10 million facility, which will be operated by Colonial Chemical, will provide a locally made source of specialty surfactants and other chemicals for oil drilling and industrial operations in Saudi Arabia.
"The new operation in Dammam will take advantage of local sourcing throughout the value chain and position Colonial Chemical M.E. Arabia as a preferential source of product and services for customers in that region," David Anderson, the founder and chairman of Colonial Chemical Inc., said in an announcement of the new Saudi Arabian plant. "Along with shorter lead times, Colonial Chemical M.E. Arabia will also offer the benefit of toll blending and manufacturing, which is a highly desirable function in this market. We have built mutually beneficial relationships in the past few years with our local investors in this new operation and are all excited to see our plans move forward."
The Saudi government has set a goal of getting at least 70% of its products from domestic production in Saudi Arabia by 2030. The new 9-acre plant will include reaction vessels, distillation columns, toll blending and mixing vessels, pilot scale equipment for development, warehousing and tank farms. The new plant will offer manufacturing technology capabilities for a variety of chemicals as well as toll blending capability for finished formulations and custom chemical manufacture.
Additionally, construction will include state-of-the-art laboratories for research and development and formulation development as well as administrative offices for supply chain and customer service personnel. The plant will also house packaging and labeling operations.
Manufacturing operations are expected to start by this fall, Anderson said. Raw materials will be sourced locally to produce amine oxides, quaternary ammonium compounds, hydroxypropyl sultaines, betaines, propionates, ether carboxylates, imidazolines, phosphate esters, EPI-sulfonates and phosphates.
"This is our first plant outside of the United States, but I would envision other plants in other countries," Anderson said in a telephone interview. "We're at a size now that we can do it, and we would look to do another plant, probably in Europe, at some point in the future."
Anderson started Colonial Chemical in Dalton in 1987 and then moved to Chattanooga as a buy and sell operation before relocating to New Hope in 1996. The operation has grown in Marion County from an initial six employees 25 years ago to 180 workers today.
The privately-held Colonial Chemical was recognized this year by Edge magazine as one of the Best Places to Work in the Chattanooga area.
The company supplies products to the personal care, household, oil & gas and industrial lubrication marketplace. Colonial Chemical serves North America and over 50 countries around the globe.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340 or on Twitter at @dflessner1