Industries Qatar revealed a plan to spend 11 billion Qatari riyals (QR) over 5 years (2023-2027) on its ongoing and other planned projects, noting that the company’s capital expenditure recorded a level of 1.13 billion riyals in 2022, as it was directed mainly to comprehensive maintenance projects and enhancing reliability and health. And safety and the environment, in addition to the initial expenditures on the establishment of the new line for the production of blue ammonia and the polyvinyl chloride project.
Industries Qatar allocated 4.4 billion Qatari riyals for the construction of the new blue ammonia production line, in addition to allocating 121 million riyals for capital spending on the new project for the production of polyvinyl chloride.
Industries Qatar plans to focus on its capital expenditure programs, which are of great importance in enhancing asset integrity, operational efficiency and reliability, rationalizing costs, removing production obstacles, and enhancing aspects related to health, safety, environment and regulatory compliance.
During 2022, Qatar Vinyl Company awarded an engineering, supply and construction contract for the establishment of a new factory for the production of polyvinyl chloride, with a total value of $239 million (about 870 million riyals), while the total cost of the project is $279 million. The new polyvinyl chloride plant – a plastic material – is expected to be completed by mid-2025, and its designed production capacity is targeted at 350,000 metric tons per annum of grade S-PVC.
The new plant is being built in Mesaieed Industrial City within QVC’s existing facilities. The new plant will significantly enhance the synergies of water and energy efficiency and existing capabilities at the supply chain level, while also ensuring the sustainability of operations.
As the first plant of its kind in the State of Qatar, the project aims for Qatar to become a new player in the region in the production of polyvinyl chloride, and at the same time it will enhance the downstream value chain.
The new factory aims to meet the growing demand from sectors consuming polyvinyl chloride, such as the construction sector. It is expected that the polyvinyl chloride that the new plant will produce will meet the demand in the local market and provide opportunities for export abroad.
Polyvinyl chloride as a product is characterized by the possibility of handling, storing and shipping safely and smoothly, and it can also be traded with other similar products produced in Qatar, which allows for the rationalization of cost structures.
His Excellency Engineer Saad bin Sherida Al-Kaabi, Minister of State for Energy Affairs, Chairman and Managing Director of Industries Qatar, said in the company’s annual report: In the context of strengthening our strategic initiatives, Industries Qatar has indirectly approved its joint venture, Qatar Vinyl Company, to establish a factory for the production of polyvinyl chloride, With a production capacity of 350 thousand metric tons of polyvinyl chloride. This project will add value to the group and the local industrial sector. Industries Qatar will finance the construction of the new plant and, at a later stage, will become a direct shareholder in Qatar Vinyl Company after the expiration of the current joint venture agreement. There is no doubt that the new ownership structure will enhance Industries Qatar’s control over its chlor-alkali products.
This project, which is the first of its kind in the country, aims to make Qatar a new player in the region in the production of polyvinyl chloride, and the project will also enhance the value chain of downstream industries. There is no doubt that the factory will not only support the industrial investments of the private sector, but will also provide a local source of polyvinyl chloride and expand the economic potential of local industries.
His Excellency added: 2022 is a landmark year, as Industries Qatar has taken a strategic decision to invest in the establishment of a new line to produce blue ammonia, which will be produced and sold in cooperation with Qatar Energy for Renewable Solutions. The design capacity of the new production line, whose value amounts to about $1.06 billion, is US Complete from own financial sources, up to 1.2 million tons annually of blue ammonia, making it the largest facility of its kind in the world.
Blue ammonia is produced when the carbon dioxide produced during conventional ammonia production is captured and stored. The blue ammonia, which can be transported using conventional ships, can then be used in power plants to produce low-carbon electricity.
The blue ammonia project, which will be built in Mesaieed Industrial City and managed by Qatar Chemical Fertilizers Company (Qafco), is scheduled to start operating by the first quarter of 2026. According to the terms of the agreements signed with it regarding the blue ammonia project, Qatar Energy for Renewable Solutions will work on: Establishment and management of facilities An integrated facility capable of capturing and storing 1.5 million tons of carbon dioxide annually. It is provided with more than 35 MEGOAAAAAAA of Electricity, which is used for the production line (Ammonia- 7) from its station for the solar Edem, which is currently being established in the industrial city of Mesaayed with a scientific and scientific resource and the correlation of the product that will be made, industry leaders and the relevant independent bodies.
Note that Qatar Energy Company for Renewable Solutions is a wholly owned company of Qatar Energy, which is mandated to invest in renewable energy and sustainability products and solutions and to market them within the State of Qatar and throughout the world. On the other hand, Qafco is considered the largest integrated producer of ammonia and urea from one site in the world, with a production capacity of about 4 million tons per year of ammonia and 6 million tons per year of urea.
The investment in blue ammonia and in expanded carbon dioxide capture and storage facilities is part of the steps Qatar Energy is taking to implement its sustainability strategy that reaffirms its commitment, as a major energy producer, to the responsible production of clean and affordable energy to facilitate the transition to low carbon energy. The strategy outlines multiple initiatives to reduce greenhouse gas emissions, including pilot projects to expand the use of carbon capture and storage technology to capture more than 11 million tons per year of carbon dioxide in Qatar by 2035.
The annual report of “Industries Qatar” indicates that in order to address the unstable conditions at the macroeconomic level that cannot be predicted, the entities affiliated with “Industries Qatar” continued to focus on their strategies regarding rationalizing costs and improving production levels while taking a package of measures to rationalize spending. capital, operational, and control of production capacity to increase the yield of raw materials and make the best use of resources. These measures have contributed to reducing variable and fixed operating cost structures, which has resulted in increased profit margins and significant cash flows.
During the year 2022, the revenues of Industries Qatar recorded a significant increase of 28%, to reach 25.8 billion Qatari riyals, compared to revenues of 20.2 billion Qatari riyals for the year 2021. The consolidated revenues of the Industries Qatar Group for the year 2022 are also the highest in its history since it was founded. The group maintained the strength of its financial position, as its registered cash and bank balances amounted to 19.2 billion Qatari riyals as of December 31, 2022, after the dividends for the fiscal year 2021 amounted to 6.05 billion Qatari riyals. Industries Qatar currently has no long-term debt.
The total assets of the group and total registered equity amounted to 45 billion Qatari riyals and 42 billion Qatari riyals, respectively, as of December 31, 2022. The group achieved positive cash flows from operations amounting to 9.9 billion Qatari riyals and free cash flows of 8.8 billion Qatari riyals during the year 2022.
Industries Qatar achieved an outstanding net profit of QR 8.8 billion for the fiscal year ending on December 31, 2022, an increase of 9% compared to 2021.
