“Alujain has been a majority shareholder since the inception of NATPET, and the current board of directors decided to take direct supervision and management of its main operational facility in 2020.”
What major milestones have been achieved in the last few years?
Alujain has been a majority shareholder since the inception of NATPET, and the current board of directors decided to take direct supervision and management of its main operational facility in 2020. We were passive investors for a long time, and we knew NATPET had significant potential to be unlocked. We started by formulating a transformation program and a plan to achieve the highest level of safety and operational excellence and to look into future potential growth, sustainability, opportunities, and threats, including changes in our product’s supply-demand and operational technologies. We took a closer look at how to maximize shareholder value, starting by applying best asset management practices and tighter activities-based cost control, including the subsidiary companies that were facing many difficulties in staying profitable. Business objectives and strategies were also reviewed and challenged to maximize the gross and net profit margins of our key products and we optimized the production grades mix and changed our mode of management for selected high-end products, focusing on specialty products and re-defining our business model from manufacturing to more of a solutions provider company. On the human capital front, we streamlined operational business processes, improved the organization structure to increase efficiency, and, more importantly, invested time, resources, and cash into significant increases in staff competencies, employee satisfaction, and career planning. As for marketing, we started with more stringent and optimized product planning protocols, focusing on smaller numbers of profitable grades to achieve a longer and more stable production cycle and focused our marketing efforts on the most profitable markets. Given our relatively small plant size, we also focused our efforts on supplying high-end-type clients, capitalizing on our differentiated quality of certain grades. We have become among the most profitable propane dehydro-polypropylene plants in the world and are now moving toward phase two of unlocking our potential to maximize shareholder value, capitalizing on our accumulated operational know-how after operating for more than 12 years. We started developing our second bigger, better and similarly configurated plant with higher value-added on the downstream side. With the new integrated operation, we will have a much bigger size, better product mix, much more sustainable and reliable operations, and perfect economies of scale. For the downstream and specialty polypropylene products we will develop system and engineering solutions instead of selling commoditized geosynthetic or polypropylene compounding products. This will hopefully bring Alujain to another level of sophistication and market competitiveness.
Alujain has a propylene and polypropylene plant in Yanbu industrial city. What plans do you have to develop here?
We have the necessary approvals for the new project, and the project development phase is progressing well. We will produce an additional 600,00 tons of polypropylene, adding to our portfolio of high-end, special grades of polypropylene, our range of geosynthetic products, and special PP compounding products with full support from an international strategic partner. This will give us the right economies of scale and know-how and will also enable us to be the fourth-largest producer of PP in Saudi Arabia and come closer to being one of the top five global producers of geosynthetics and PP compounding, targeting high-end fiber, pharma/medical, construction and mining geosynthetics, specialty pipes and piping systems, and high-end car manufacturing industries.
Are there any aspects in which digitalization has changed and impacted Alujain’s operations?
The priority for us in this field is exploring digitalization to improve operational performance, optimization of plant processes, and reduction of human errors. The scope regarding marketing, marketability and all other logistics activities has yet to be defined because there are all kinds of third parties involved. For now, the application of digital AI and other digital twinning tools will have the largest impact on the business’s bottom line as they can minimize human error and reduce operational risk.