Technological innovation in Saudi manufacturing

Saudi Arabia

Mansoor Hashmi, CEO of Sinsina Group, and Abdullah Ayub, business development manager of Sinsina Group, talk to The Energy Year about how Saudi Aramco’s long-term agreements impact domestic manufacturing companies, the main drivers behind the growth of the Saudi manufacturing sector and the extent to which the group is involved in manufacturing modular solutions for Saudi Aramco. Sinsina Group fabricates steel products and provides commissioning and maintenance.

How do Saudi Aramco’s long-term agreements impact domestic fabrication companies?
Mansoor HASHMI: With most modular units, Saudi Aramco applies long-term agreements, in which it selects a few companies for 10-year supply contracts. This increases the competitiveness of the selected companies, helps with their cash flow and benefits the whole market. However, Aramco also allows some modular products to be offered in regular competitive markets.
Winning a long-term agreement is very challenging. After that the challenge is not only maintaining the volume and quality of production but also maintaining Saudi Aramco’s performance indicators. These relate to bidding; safety; delivery performance; IKTVA [in-kingdom total value add] percentages, which incorporate different localisation and R&D rates; and, in the long-term, product diversification and capacity expansions.

What are the main drivers behind the growth of the Saudi manufacturing sector?
Abdullah AYUB: As Saudi Arabia is opening up to localise technology, Saudi Aramco, SABIC and the government have been implementing local content measures to regulate how fast and the extent to which this technology must be localised. This is the main benefit we see as investors. Since 2017-2018, we have increased our revenue by more than 60%, and we have increased our workforce threefold because of the local content policy.
We gained a greater market share by bringing in technology and increasing our facility space to give us more capacity and allow us to multiply our product portfolio. As we are mostly focused on manufacturing and operate through open contracts with Saudi Aramco and SABIC, every year we have to increase our scope and add new products.

To what extent is the group involved in manufacturing modular solutions for Saudi Aramco?
M.H.: Today, modularisation is one of the new forms of manufacturing. It has many benefits, as most oil and gas components can be fully assembled and pre-commissioned for multiuse process modules. These modules incorporate tagged equipment and all structural steel, piping, fireproofing, insulation, and electrical and instrumentation that comprise the module boundary.
‘Plug and play’ modules are ready to install and commission at site. These help oil and gas companies increase their working capacities, reduce their on-site workforce and lower their projects’ associated risks. These improvements are achieved by minimising project field times and site waste and by improving the final product’s quality, as the modules are assembled in a controlled environment.
We manufacture modular rolling skids that diffuse pressure, for instance, from 7,000 psi to 300 psi [483 bars to 21 bars]. They are also called safety skids. We can handle the whole production process, including the engineering, design and fabrication. We have the capability to design skids that bring 10,000 psi down to 300 psi [689 bars to 21 bars].
We also supply oil and gas modular packages, which include chemical injection skids, RTUs [remote terminal units], HIPPS [high-intensity pressure protection systems], multiphase flow meters, etc.

What kind of technological innovations is Sinsina introducing to the modular constructions segment?
A.A.: The ConXtech technology is a revolutionary system for modular construction that utilises standardised steel components and a connection system that allows for the rapid and precise assembly of structures. This technology offers significant advantages in the oil and gas industry because it streamlines construction processes, reduces costs and improves project timelines.
We have a corporate purchase agreement for the ConXtech models with Saudi Aramco. In Saudi Arabia we were the second company to adopt this technology. We are bringing the required machinery, transferring the know-how and providing training. Our final target is to end the process by manufacturing and developing the whole system in-house.

How has the acquisition of MIS Arabia complemented your existing capabilities?
M.H.: MIS is one of the largest steel fabricators in Saudi Arabia. We wanted to increase our capacity to deliver oil and gas modular packages since we have a long-term agreement with Aramco. This acquisition allowed us to locally manufacture and develop large, thick pressure vessels, for which we also have a long-term agreement.
We are right now expanding our capabilities into lube oil skids and delivering complete compressor and large pump skids and their assembly. These kinds of skids can be applied in oil and gas and also in power plants and other industries.

What are Sinsina’s latest efforts to introduce new technologies in Saudi Arabia?
A.A.: We are constantly bringing in new technologies. We have recently adopted a new technology for monitoring pipeline corrosion, which is something that has not been provided in Saudi Arabia by many companies. We are also looking into introducing a zero-flare technology solution in the kingdom that should reduce flaring to a minimum and is in line with Saudi Arabia’s target for controlling carbon emissions.

Where do you see untapped opportunities within the manufacturing sector?
M.H.: Saudi Aramco and SABIC are two of the largest companies in the world, and they need many products localised. Increasingly Ma’aden is demanding more products too. In our line of business, there is room to grow tenfold working with these companies. If we maintain our growth strategy and keep localising the technologies these companies are currently importing, there are many segments to expand into.
Valve manufacturing and forging have a very good market in Saudi Arabia as well as across the GCC and MENA regions, and we want to become more involved in valve manufacturing. We’re already in touch with some potential technology providers in Europe and China.
There are also opportunities to manufacture smaller items in the electrical instrumentation area, such as LED lights and proportional-integral-derivative controllers. In the future we also want to increase our exports by using the Made in Saudi brand.

Read our latest insights on:

• Saudi Arabia