Four Japanese firms led by trading house Mitsui & Company will set up a joint venture in Saudi Arabia to build a methanol plant with an annual capacity of one million tonnes, a Mitsui spokesman said. The joint venture, capitalised at $88 million, will invest about $350 million in the plant, which is scheduled to begin operating in the autumn of 2004 in Jubail Industrial City, he said. The venture aims to meet growing global demand for methanol, a basic material used to make synthetic resin and other chemical products.

The demand for global methanol amounted to about 30 million tonnes in 2001, and demand in Asia, the US and Europe is set to post annual growth of three to four percent. Saudi International Petrochemical firm will take a 65 percent stake in the venture, while Mitsui will take a 20 percent stake. Japanese trading house Mitsubishi Corp, chemical firm Daicel Chemical Industries Ltd and Iino Kaiun Kaisha Ltd will each hold a five percent stake. Mitsubishi Gas Chemical and other Japanese firms have had a joint venture with a local firm in Saudi Arabia since 1981 to undertake production of methanol there.