TALAL AL-SHAIR Chairman and CEO of Shairco and Cristal

PM Communications: You founded SHAIRCO in 1979 and CRISTAL in 1991, and now you own a giant diversified group, with activities ranging from manufacturing and trading to petrochemicals. As a visionary, what is your piece of advice for foreign investors coming to Saudi Arabia?

Dr. Al-Shair- Chairman and CEO of CRISTAL: The factors that determine success vary for each region, era, and sector. I divide my own experience into three different stages, spanning through more than two decades.

During the first decade, my goal was to establish small to medium sized industrial projects, such as fiberglass production. I focused on creating intensive, technology based projects and securing my position in the market.

Strategic positioning of technically demanding capital intensive projects were the most important factors during the second decade. The Red Sea has a vast economic potential. Today, logistics and shipping costs determine the viability of many projects. We anticipated this situation, thus we established CRISTAL in Yanbu, a TiO2 production facility importing mineral sand (Synthetic Rutile) from Australia and Canada and exporting its pigment to more than 70 countries worldwide. The white pigment is used in paints, plastics, textiles, paper, pharmaceuticals, food and many other applications. CRISTAL developed a business model that is being used as reference in a number of government agencies and commercial banks. CRISTAL invested in horizontal and backward integrations making it one of the lowest cost producers in the world.

Coming into the third decade, we know exactly where we stand and where we want to go. We created Nabaa three years ago, a Yanbu-based business development company, whose main role will be to promote and facilitate investment projects. It spreads along three square kilometers of the industrial site at Yanbu, developments of which is based on synergistic clusters of industries. The concept of industrial clustering is well spread around Europe, but is relatively new in the Middle East. Companies will benefit from sharing costs in energy, stock feeding, distribution and services on top of potential vertical and horizontal integrations. Investors will have a wide range of opportunities to choose from. They might choose to invest in one project or in a cluster of projects. And Nabaa will be there to offer already developed platforms of investments and eliminate possible obstacles. SABIC also is establishing a mega petrochemical complex in Yanbu based on similar concepts.

Indeed, this would not be possible without the hard and effective work from entities like The Royal Commission for Jubail and Yanbu or SAGIA. Custodian of the Two Holy Mosques, HRH King Abdullah is being extremely helpful himself, reforming the public sector.

Saudization is a very important challenge. If we want to succeed, we have to start from the very bottom, and this can only be accomplished through motivation and training. School dropout is a very serious problem in Saudi Arabia, and these people cannot be forced into small businesses. We have to encourage our young population through quality training programs, and that is exactly what we are doing.

As we speak, more than five hundred kids are being trained in Yanbu to become qualified professionals in fields such as industrial painting, welding, electric wiring, machining …etc. In less than a year they will be able to claim a monthly salary of four thousand Saudi Riyals, they can almost double that if they stay longer and learn more complicated professions, such as advanced welding. College graduates cannot claim that amount.

PM Communications: What is your vision on the benefits the WTO might bring to your line of businesses?

Dr. Al-Shair- Chairman and CEO of CRISTAL: We have been waiting this for a long time. It will upgrade Saudi products, systems, market approach and the overall quality of business. It will immediately open new markets for people in the export business but it will also open mid and long term opportunities for those who are not.

PM Communications: What new strategies will you implement in the next few years?

Dr. Al-Shair- Chairman and CEO of CRISTAL: We will continue to be export oriented, meeting demands especially in the Middle East and search for opportunities to invest in technological developments in and outside Saudi Arabia with potential mergers, acquisitions and/or joint ventures.

PM Communications: What would you like to see happen between the UK and the Kingdom of Saudi Arabia in terms of economic relation?

Dr. Al-Shair- Chairman and CEO of CRISTAL: There are many opportunities for British investors here. One of them is the development of vocational schools, field in which the UK is very successful.

Other fields are, of course, the petrochemical industries and the emerging mineral industries, from consulting to engineering to contracting.

Another interesting possibility is taking advantage of the basic industry here and then investing in downstream in Europe. We are thinking of taking our raw pigment, and personalizing the final product near our European clients, following their specifications.

Cristal is highly sensitive to environmental issues. The company surpasses national and international standards.

Titanium dioxide pigment (TiO2) is a product in high demand worldwide. A white powder offering high opacity, brilliant whiteness and exceptional UV resistance, it is an essential ingredient in the manufacture of paints, inks, plastics and rubber. Other products for which it is used include soap and toiletries, adhesives, concrete curing compounds, candles and crayons.

The paint industry consumes more than 50 per cent of world TiO2 production, followed by the plastics and paper industries, which account for 19 per cent and 17 per cent respectively. The largest consumer is the United States, consuming 33 per cent, followed by Europe (24 per cent) and Japan (8 per cent), and substantial growth in demand is expected in developing, densely populated economies such as China and India over the next decade.

The premium quality TiO2 produced by Cristal is inert, non-toxic and available in a variety of grades enabling it to deliver the colour, tone, strength and protection required by an increasingly diverse global market.

Cristal employs the chloride route state-of-the-art technology that produces TiO2 of superior whiteness, brightness and tight particle size control. The chloride route also generates lower levels of pollution than the alternative sulphate route.

Environmental responsibility is at the top of Cristal’s agenda. The environmental management system at the Yanbu Al-Sinaiyah plant exceeds both national and international regulations. Air emissions have been continuously reduced and a policy of zero discharge into the Red Sea is strictly adhered to.

Affiliation to the American Society for Quality and the UK’s Institute of Quality Assurance reflects the company’s commitment to developing effective quality management strategies throughout all areas of its operation.

The plant’s product application laboratory is fully equipped for testing paints, pigments, plastics, powder coatings and inks. Other facilities include a natural weathering station located in a high UV marine environment on the Arabian Gulf and equipment for simulating an accelerated weathering process on a variety of products.

Cristal also owns and operates the Arabian Chemical Centre (ACC) in the Western Region of Saudi Arabia, which boasts state-of-the-art membrane technology for the production of chlorine gas, a vital ingredient in the manufacture of pure titanium dioxide. Other products manufactured by ACC include caustic soda, hydrochloric acid and sodium hypochlorite. Cristal is a major shareholder in the Australian company BeMaX Resources NL, the third-largest supplier of Rutiles and Zircon.