LG Chem has announced the signing of a cooperation agreement with Alkhorayef Group for the localization of reverse osmosis membrane manufacturing facilities. The two parties plan to start localized operations of reverse osmosis membrane manufacturing facilities in 2026. In the future, the partnership will result in an investment of up to SAR 320 million for the local manufacturing facility. In addition, the two companies will develop sales and marketing activities based on each other’s strengths and continue to explore new business opportunities. Further expansion of water treatment business cooperation in Saudi Arabia.
The two companies will accelerate their presence in the Middle East market based on the Saudi production plant. The Saudi government offers preferential policies for domestic products when bidding for public water treatment projects. Therefore, locally manufactured products are more conducive to project contracting. Localized manufacturing not only saves tariffs, but also reduces the delivery time for customers in the Middle East when ordering products.
Alkhorayef is a leading integrated group of Saudi companies in the water treatment, refining, energy, shipping and military sectors. Alkhorayef Water, which operates the development and operation and maintenance of water pipelines, is also the largest private water treatment company in Saudi Arabia. Saudi Arabia is the largest market for reverse osmosis membranes for seawater desalination, accounting for 21% of the global market demand. More than 70% of its water supply is dependent on desalination. In addition, the importance of stabilized water supply and reverse osmosis membranes in Saudi Arabia is increasing due to the construction of “Vision 2030” national development projects such as NEOM.
Last year, LG Chem announced that it would invest about 125 billion won to expand its reverse osmosis membrane plant in Cheongju, South Korea, with an annual capacity of 400,000 units. And to triple the size of the reverse osmosis membrane business in the next five years. Currently, LG Chem’s global freshwaterization of 5.1 million tons of water per day, which can reach 1.86 billion tons per year. Based on the world’s average daily water consumption per person, this can be used by a population of approximately 46 million or more.
Hyung Hoon, president of LG Chem’s water treatment business, said, “Since entering the reverse osmosis membrane business in 2014, LG Chem has been driving the industry’s development with its own R&D technology strength and globalized business layout. Through this partnership with Alkhorayef Group, we will actively lay out the rapidly growing water treatment business market in Saudi Arabia and the Middle East to further consolidate our position as a leading reverse osmosis membrane company.”