Saudi petrochemicals company Alujain Corporation has announced that it has signed a joint venture agreement with Belgium's Beaulieu Fibres International (BFI) to expand the production of polypropylene fibres and nonwoven products in the kingdom.

Under the agreement, BFI, a wholly owned unit of Beaulieu International Group, will invest SAR89 million ($23.7 million) in Alujain's wholly owned subsidiary Infrastructure Reinforcement Industrial Company (IRIC) in exchange for a 50% stake.

The partners also signed shareholder, subscription and marketing agreements, Alujain said in its filing to the Saudi bourse Tadawul.

As per the deal, IRIC plans to increase its production capacity for synthetic fibres and nonwoven products to 88,000 metric tonnes per annum from the present 26,000 tonnes capacity.

Alujain said the planned expansion, including production lines to be contributed by BFI, will require additional capital expenditure of about SAR330 million ($86.5 million), to be jointly funded by the partners, it stated.

The joint venture forms part of Alujain's broader petrochemicals expansion in Yanbu Industrial City, where the company is developing a propane dehydrogenation and polypropylene project following feedstock allocation approval from Saudi Arabia's Ministry of Energy.

The company said the financial impact of the transaction is expected to begin from the fourth quarter.-TradeArabia News Service