Alpha Group signs MOU with DevCorp International

Mr. James Greenberg, Chairman of DevCorp International, and Mr. Kamal Agarwal, Director of Alpha Group, signed a Memorandum of Understanding on September 19th at the Alpha plant in Daman, near Mumbai, India.

Mr. Agarwal, impressed by the overall investment climate in Saudi Arabia, especially the excellent infrastructure and the ease of shipping to the European and North American markets from Saudi Arabia, designated three potential projects to be established in Saudi Arabia in joint venture with DevCorp International.

Alpha Group has already established plants in India manufacturing these products and is currently signing several export agreements.

The first project, the manufacture of BOPP films which have wrapping and adhesive applications, would have an output of 36000 Metric Tons per manufacturing line and would source locally produced polypropylene.

BOPP films are noted for their transparency and thermal dimensional stability making them exceptional products for food wrapping and storage. The second project would manufacture small-sized PET bottles, specifically required by the pharmaceutical industry, for storage and delivery of prescription liquids while the third would produce POF shrink film and stretch film. Each manufacturing line of 4 to 5 meter wide product would produce 15000 Metric Tons per annum output and would source polyethylene locally.

The initial investment in these three projects would be in the range of $ 10 to $ 40 Mn, with provision for adding more lines as the market picks up.

Mr. Agarwal noted that Alpha Group, which has a substantial presence in all three products in the local Indian market, looks forward to the joint venture potential in Saudi Arabia as a means of opening up a much larger export market to the EU and North America by taking advantage of the superb infrastructure built in Saudi Arabia over the last 20 years and Saudi Arabia's key global location between Asia and Europe.

'I see huge potential for the products in the USA/Europe and in North Africa. By exploring the location of plants in Saudi Arabia, Alpha Group will meet its corporate goals to become an international supplier of plastic film, exporting to global markets.'

Mr. Agarwal was a member of a delegation of Plastics Manufacturers from the Organization of Plastics Processors of India that visited Saudi Arabia in early September as part of an initiative by DevCorp International to begin to build interest among world producers of plastics in setting up manufacturing facilities in Saudi Arabia.

Through his overview of the Saudi business environment and the planned and operating economic and industrial cities, Mr. Agarwal decided that both the Yanbu/Rabigh cities on the West coast as well as the industrial areas in the Eastern Province offered distinct advantages to his projects.

The three project proposals would be pursued as independent units with final location depending on overall attractiveness of particular industrial areas.

DevCorp will be fully involved with the development and implementation of the projects under the Saudi Economic Offset Program, subject to various approvals.

Under the MOU, Alpha Group and DevCorp will prepare a detailed Feasibility Study for each of the identified projects based on the expertise and inputs from both the parties. In particular, detailed analysis would be carried out to establish the parameters required to ensure the international cost competitiveness of the products made in Saudi Arabia and supplied to customers in the target market. It is targeted to complete the Feasibility Studies and firm up the investment decision within six months.

'This is the first fruit of a strategy we have been planning over the last two years,' noted Mr. Ibrahim Mishari, General Partner for Plastics, DevCorp International.

'We are deeply involved in the development of the downstream plastics industry to produce high-value-added plastics products in Saudi Arabia using local commodity polymers. These commodity polymers are currently exported without added value. We are delighted to be able to introduce the Alpha Group to Saudi Arabia and plan to establish similar projects with other noted plastics producers from Asia, Europe, and the Americas.'