Taihan announced on September 8th that it signed a joint venture contract with SSEM(Saudi Services for Electro-Mechanic Works., Co., Ltd.) to establish a local corporation, STCC(Saudi Taihan Cable Company Ltd.) for wire and cable production in Saudi Arabia.
Taihan and its local partner will invest $4 million each as share capital for this corporation and acquire 50% stake of the corporation. SIDF (Saudi Industrial Development Fund) will also provide $14 million out of $28 million, the total amount of investment for this project.
STCC is expected to start its plant operation from the beginning of 2011 after finishing the construction work and installation of production facilities at a site located nearby Riyadh, the capital of Saudi Arabia. Henceforth, STCC plans to produce power cables and other industrial cables worth $100 million yearly and market them with an aggressive strategy to Saudi Arabia, the biggest cable market in the Middle East and its neighboring countries. Taihan has recorded $300 million sales annually in this area, especially including GCC (Gulf Cooperation Council).
Taihan has concluded this joint venture after market research and preliminary study and preparations for two years. Initially, in accordance to market demand in the Middle East, STCC will produce medium voltage cables including instrument and control cables. From 2012 onward, when the economy of Middle East is to be recovered from the current economic recession, STCC will expand its product line to the extra high voltage cables. Taihan believes STCC will become the biggest cable production base in Middle East in the future.
STCC will be assisted by the technology and management know-how of Taihan and the marketing cooperation with its local partner, SSEM, one of the most competitive engineering works companies in Saudi Arabia. SSEM ranks first in the field of power grid construction and it has cooperated with Taihan since early 1990’s for its expansion in the Middle East. Al Rashid Group owns 100% stake of SSEM as a holding company. The joint efforts of Taihan and SSEM will expand its sales area and increase sales volume of value added products like extra high voltage cables. |