Germany's Evonik eyes Saudi chemical investments

Evonik is considering investment in Saudi Arabia's chemical industry that, according to a financial adviser to an industrial group in Germany, could amount to as much as $ 1.5 billion by 2012. Evonik signed an agreement by appointing BMG Financial Group as lead arranger and financial adviser for the potential investment. An Evonik spokeswoman in Germany, said, "We are considering medium-term possibilities to become active in Saudi Arabia. Concrete preliminary decisions are not on the agenda right now. But by the time they commission their plants in 2011, things would become different by then. The cycle will also be different and the supply demand ratio will also change."

Global petrochemical demand has slumped due to the economic slowdown, forcing producers to slash output and lay off staff.

But Evonik wants access to cheap Saudi energy supplies as it prepares for future economic growth and resurgence in demand.

The company may launch up to three joint-ventures each worth between $ 400 million and $ 500 million over the next three years.