Saudi-based Swicorp Joussour said its unit Eastern Industrial Company (EICO) has raised SR592 million ($158 million) to partially fund its corrosion resistant glass fiber production plant project in Jubail Industrial City.

EICO is 51 per cent owned by Joussour, a Saudi joint stock company being managed by Swicorp with a capital of SR2.67 billion ($712 million).

"The plant will be the largest-of-its-kind in the region and will have an annual production capacity of 60,000 tonnes with a plan to double output to 120,000 tons in near future," said Faysal Hamza, managing director at Swicorp Private Equity and EICO.

EICO, he said, had taken delivery of most of the plant’s equipment and machinery and has completed all civil works at the project’s site.

Hamza said Joussour had secured all permits and licences including an advantageous land location in the First Industrial Zone in Jubail, approval from the Saudi Electricity Company, natural gas allocation from Saudi Aramco, in addition to oxygen from Sabic's National Industrial Gases Company to enhance the capacity of its furnaces.

"The financing package comprises a SR200 million ($53 million) medium term facility from the Saudi Industrial Development Fund (SIDF), as well as SR242 million ($65 million) medium term Islamic financing facility and a SR150 million ($40 million) Islamic bridge facility from Bank Al Jazira to bridge the SIDF financing facility."

The financing structure provides EICO with a flexible and cost effective funding base" said Mohamed Wahby, director at Swicorp Private Equity and EICO board member.

"EICO aims to produce a range of corrosion resistant E-CR glass fiber for use in applications that span infrastructure, renewable energy, automotive, marine, aerospace, and recreational uses."

These include Direct Roving, Woven Roving, Chopped Strands and Chopped Strand Mat for the regional and international markets.

According to him, CR glass fiber has several differentiating advantages over conventional E-Glass in terms of corrosion resistance, mechanical properties, and environmental foot print.

Hamza said EICO had a very promising future in light of the infrastructure boom in the region, a matter which was identified by Joussour back in 2007.

"Joussour provides continuous support and strategic guidance to its portfolio companies to enable them to achieve their full potential," he added.

Swicorp Financial Advisory acted as the exclusive advisor to EICO in relation to the facilities provided by Bank Al Jazira.

Thamer Nassief, director at Swicorp Financial Advisory, said "the transaction is a perfect example of Swicorp leveraging its expertise across the various business lines, and demonstrates its capabilities to execute this transaction in challenging market conditions".

Swicorp is a leading corporate finance advisory, private equity and principal investment firm with a specific regional focus on the Mena region.-TradeArabia News Service