Gulf Advanced Cable Insulation Company’s plant for the production of power cable insulation materials will begin production in the third quarter of 2013, a statement said.

The company is an affiliate of Saudi International Petrochemical Company (Sipchem) and Hanwha Chemical Corporation.

The engineering design, procurement and construction contract for the wire and cable polymers compounding plant has been awarded to Posco Engineering Co, South Korea.

The new plant will be located at Sipchem’s site in Jubail Industrial City and it comes as part of Sipchem’s third phase downstream expansion programme.

Gulf Advanced Cable Insulation Company will be owned equally by Sipchem and Hanwha Chemical of South Korea. The plant, whose cost is estimated at around SR230 million ($61.3 million), will source its major feedstock from International Polymers Company, one of Sipchem’s affiliates.

Abdulrahman A Al Saif, president for projects and services at Sipchem, said the contract award was a big step forward in Sipchem’s programme. He added that the new plant’s power cables insulation materials would have wide usage in the region.

Hanwha Chemical stated that the project would create great synergy with Hanwha’s existing wire and cable compounding business while also representing Hanwha’s strong commitment to the Middle East region as an essential part of its globalisation process.