SAUDI International Petrochemical Company (Sipchem) affiliate Sipchem Chemicals Company has signed a SR164.8 million ($43.9 million) loan facility agreement with Saudi Industrial Development Fund (SIDF) to support financing of the construction of an ethyl acetate and butyl acetate (EA/BA) plant.

The EA/BA plant, to be built in Jubail, Saudi Eastern Province, will have production capacity of 100,000 tonnes per year.

Signing the agreement were Ali A Al Ayed, director general of SIDF, and Abdullah S Al Saadoon, Sipchem president for operations. The project is considered to be the first of its kind in the region and is part of Sipchem’s phase III expansion programme. The total cost of the project is around SR350 million and construction work is expected to start during the second quarter of 2013.

The project is expected to supply local and international markets with ethyl acetate and butyl acetate used as a solvent in inks and industrial liquids. The company had announced earlier the signing of the technology agreement with Rhodia, France.

Feedstocks for the production of ethyl acetate are acetic acid, which will be obtained from International Acetyl Company (one of Sipchem’s affiliates) and ethanol, which will be imported from international markets at competitive prices.