A family-owned composites company based in Gisborne has signed the largest contract in its history to supply the world's biggest oil company.
Pultron Composites, with its Dubai subsidiary company Mateenbar has secured a memorandum of understanding to supply products to Saudi Aramco, the state-owned oil company of Saudi Arabia.
The agreement will see Pultron's glass fibre-reinforced polymer (GFRP) rebar product used to reinforce concrete.
Pultron says its products prevent rusting and in corrosive environments such as the Arabian Peninsula can mean concrete lasts three times as long as that reinforced by steel.
As part of the deal Mateenbar will set up a 103,000 square foot manufacturing facility in Dammam in the Eastern Province of Saudi Arabia.
Mateenbar was set up in 2011 to sell products of the same name to help Pultron expand into the Middle East,
The deal is valued 93.75 million riyals ($NZ38.9m) which Pultron chief executive Jasper Holdsworth said warranted the building of the new facility, which was around eight times the size of its existing facility in Dubai.
"They have calculated that's how much business they'll be putting through to us if we set up a facility in Saudi Arabia," Holdsworth said.
"This would be the biggest deal in the company's history."
According to Saudi Aramco's internal projections, the use of GFRP products could cut its steel consumption by around 10 per cent or 50,000 tonnes.
The deal had been developed over around two years, Holdsworth said, with Saudi Aramco sending an audit team to examine Pultron's operations both in New Zealand and Dubai.
"They're the gold standard for getting product approvals in that region."
Mateenbar already supplies products to Saudi Arabia, including as principal supplier of GFRP rebar to the 21km-long Jizan Flood Mitigation Channel, which protects a 400,000 barrel per day refinery which is exposed to significant flood risks.
Holdsworth said the agreement was also an endorsement of its products in seawalls, sidewalks and other coastal structures.
Mateenbar products have also been used to reinforce concrete in the Grand Paris Metro tunnel, the iconic Dubai hotel Burj Al Arab and Abu Dhabi Formula 1 racetrack.
The MOU was signed between Aramco and Pultron at the Future Investment Initiative, a major investment forum dubbed "Davos in the Desert", which was held in Saudi Arabia's capital, Riyadh, in mid-October.
Investment bankers are currently preparing to sell a small stake in Saudi Aramco through an initial public offering. The Saudi government is hoping to sell a 1.5 per cent stake for more than US$25 billion (NZ$38.8b), which would value the entire company at around than US$1.7 trillion ($2.6t).