Saudi Aramco, Dussur – the Saudi Arabian Industrial Investments Company – and Hyundai Heavy Industries (HHI) have agreed a deal to jointly collaborate on engines and pumps business development in Saudi Arabia.
The Memorandum of Understanding (MOU) lays out a comprehensive engine and pump business cooperation framework, through the formation of a joint venture (JV) to manufacture 2-stroke engines, 4-stroke engines, and marine pumps.
The contract also includes sales and aftersales services in the Middle East and North Africa region.
The manufacturing facility will be co-located with the maritime yard in Ras Al-Khair, at the King Salman International Complex for Maritime Industries and services.
The new JV will manufacture 4-stroke engines under HHI’s HiMSEN brand licensing, serving as a regional production stronghold to support the growing demand for electricity in the MENA region as well as marine applications for very large and small vessels.
It will also operate under a MAN-HHI sublicense for the manufacturing and servicing of 2-stroke engines.
Both parties have identified strong economic and strategic levers to the new JV such as the lower costs of production due to the advantaged supply of machine finished steel and iron components for engines and pumps from the casting and forging facility JV in Ras Al-Khair.
The engine and pump JV is expected to generate over 650 direct jobs, as well as indirect jobs through the development of the supply chain.
The expectation is that the facility will commence operation by end of 2019.