Growing with the Vision
Tasnee is one of Saudi Arabia’s industrial giants. Its chief executive officer Fawaz Al Fawaz tells how the Saudi Vision 2030 is propelling Tasnee’s growth.
Fawaz Al Fawaz is the Chief Executive Officer of Tasnee (National Industrialisation Company), the first fully owned joint stock industrial company in the Saudi private sector. It is now one of the country’s largest industrial and petrochemical companies, recognised globally for its state-of-the-art technologies and innovative solutions. He spoke with Sir Martyn Lewis about Tasnee’s role in advancing economic diversification in Saudi Arabia.
ML – Fawaz, how important is Tasnee in the overall picture of what is happening in Saudi Arabia?
F – Let me start with an introduction. Tasnee was established in 1985, focusing on diversified downstream conglomerate. Our journey began with plastic packaging & solutions and lead smelting & car batteries, as well as inspection & technical testing etc. Then we moved to the petrochemicals, starting our ethylene cracker almost 20 years back, with certain polyolefins products, like polyethylene, and polypropylene from our BDH plants. That was followed by the metals business, which is basically the titanium value chain. The titanium sponge is a strategic product supplying the aerospace industry and creating other industrial applications in our joint venture with Toho Titanium Company Limited of Japan. We are quite pleased with what we have achieved so far and are looking for more growth in the near future. We are working with the regulator, trying to position ourselves as one of the petrochemical companies of Saudi Arabia delivering new capacities and capabilities, including environmental technologies.
ML – And given the importance of the 2030 Vision plan, how difficult or easy has it been for you to diversify?
F – This is a good question. The Saudi Vision 2030 presents a compelling road map for transforming the economy through diversification. As a key player in the petrochemical sector, Tasnee is committed to contributing to this vision. We aim to introduce new products, enhance manufacturing efficiency, and utilise feed stocks to drive growth. Our focus extends to supporting small and medium-sized enterprises, boosting GDP, and promoting economic diversification. We are also committed to the energy transition, supplying polymer products for renewable energy applications like wind and solar. Tasnee is fully aligned with the 2030 vision, integrating it into our strategies, growth plans, and project development. We’re developing innovative products and applications that support this vision, and we’re excited to contribute to Saudi Arabia’s economic
transformation.
ML – What are the main challenges you have had to overcome as you have grown the company, particularly in recent times, in what we might call the New Saudi Arabia?
F – We view challenges as opportunities for growth. In our industry, we face several challenges that require proactive mitigation. Firstly, securing reliable feedstock availability and complying with evolving regulatory guidelines, including rigorous Environmental, Social, and Governance (ESG) standards, is paramount. Geopolitical uncertainties pose another challenge, impacting global markets and supply chains. We are working closely with suppliers and stakeholders to ensure timely delivery of goods and services. Implementing cutting-edge technologies, such as AI, machine learning, and data analytics, is vital for our growth. However, this also introduces challenges like cybersecurity and data privacy, which we are actively addressing.
Lastly, developing human capital is essential. Saudi Arabia boasts a talented pool of young professionals, educated locally and abroad. We are committed to providing training and upskilling opportunities to enhance their capabilities, enabling them to leverage real-time data, new technologies, and innovative applications.
ML – How diverse is your shareholder portfolio?
F – We have a well-diversified shareholder base and are 100% owned by private investors – more than 50,000 of them, with none of them owning more than 10%. We also strive for excellence by bench marking our performance against global peers, focusing on efficiency and productivity. Our commitment to transparency, governance, and operational excellence enables us to maintain the trust of our stakeholders.
ML – You are very proud of your social responsibility, which is something that every company should look towards. How do you exercise that social responsibility? What are the kind of things that you do within and maybe outside the country?
F – We are paying attention to ESG with sustainability, guidelines, policies and procedures wherever we are doing business, both locally and globally.
We are one of Saudi Arabia’s top three rated companies for social responsibilities – both corporately and in terms of our employees. Just to give you a small example, we have an internal process to encourage people to participate in social responsibilities with a very reasonable contribution from their own salaries. The company is committed to matching such a contribution. And it’s not just the money, we are really trying to build the right positive culture, with employees sharing a sense of engagement and ownership with the company, and we are very proud of that. But that’s not all. We pay attention to the decarbonisation guidance from the 2030 Vision which aims for zero carbon by 2060, so we have the road map to invest in that process and journey. We have a good number of trees around our sites, and we already recycle some of our waste. Just give you an example, we are producing about 1.5 million conventional car batteries per year. So we not only collect old scrap car batteries, but we have the required technologies and processes for crushing those batteries and recycling their parts, including the plastic pieces, the polypropylene and the lead. Not only that but the scrap from the polypropylene, or the polymers, goes to a subsidiary to produce more than one million plastic pallets which replace the traditional wooden pallets used in the industry, thus contributing to the environment. On top of that we capture and recycle waste from our petrochemicals plant, minimising waste disposal and promoting resource efficiency.
ML – What advice would you give to individuals, companies and entrepreneurs who might be thinking of doing business in Saudi Arabia?
F – Saudi Arabia is uniquely positioned to attract international investors, boasting a supportive government, abundant resources, and exceptional human capital. We are committed to leveraging these strengths to facilitate the creation of new products, drive innovation, and deliver strong returns on investment. At Tasnee, we’re proud of our accomplishments, particularly in the face of global challenges. Our dedicated employees have worked tirelessly to achieve the highest sales volumes despite supply chain disruptions and regional economic downturns. Through operational excellence we’ve optimised our processes, enhanced efficiency, and improved product quality. We’re driving innovation through research and development, ensuring our products meet evolving market demands, driving innovation, and delivering exceptional results. By partnering with Tasnee, investors can tap into Saudi Arabia’s vast potential, leverage our expertise, and achieve long-term success.
ML – The IMF has recently given Saudi Arabia a very strong growth rating. How could institutional investors make money by investing now in your company.
F – We believe that Saudi Vision 2030 is working well and achieving most of its targets even ahead of time in some sectors. When it comes to Tasnee we are one of Saudi Arabia’s listed companies. We are diversified, with petrochemicals upstream, speciality chemicals downstream and the titanium business producing the titanium sponge which builds our relationships with the world’s major aeroplane manufacturers such as Boeing and Airbus. Our diversification strategy is transformational and combined with the clarity of our petrochemical strategy and planning should double revenue within the next 7 years – as we continue to develop our human capital, utilise the latest technologies and stay focused. For example, we are one of the few petrochemical companies who started introducing digitisation of AI and machine learning at the right time to be more efficient and more cost effective. So, we are committed to our business, and really proud of what we have been doing and what we are planning to do in the future. I would say we are focused on our corporate strategies to create shareholder value and manage viable business opportunities for the long-term in the best interests of our shareholders.