Eight Saudi petrochemicals companies have made the MEED 100, reflecting the kingdom’s continued dominance of the sector.

Saudi Basic Industries Corporation (Sabic) retains its position as the region’s largest listed company after a solid performance in 2011. The firm posted net profit of SR29.2bn from sales of SR189.9bn, compared with sales of SR152bn and net income of SR21.5bn in 2010.

Sabic had a strong start to the year, but performance fell away towards the end due to lower demand globally for petrochemicals, which hit prices. According to the Platts Global Petrochemical Index, a benchmark basket of seven widely-used petrochemicals, prices averaged $1,161 a tonne in December 2011, compared with $1,247 a tonne at the end of 2010, which represents a fall of 6.8 per cent year-on-year. By March 2012, however, the index had rebounded to $1,400 a tonne.

Sabic currently has a market capitalisation of $84.6bn, an increase from $70.8bn in 2010, illustrating the wider recovery of the Saudi bourse from the financial crisis. The company continues to work on expanding its production capacity and most recently signed a toluene diisocyanate and methyl diphenyl diisocyanate technology licence with Japan’s Mitsui Chemicals in order to achieve its plan of becoming a global leader in polyurethane production.

Most of the other petrochemicals firms on the list are subsidiaries of Sabic, which is 70 per cent state-owned, or of Saudi Aramco, which is wholly government-owned. Their strong financial backing makes them attractive to investors, so most have improved on or maintained their 2011 ranking regardless of their financial performance.

Saudi Kayan Petrochemical Company made a $66.72m loss in 2011 despite reporting gross profits of $8.65m. The firm attributed the loss to lower prices for petrochemicals during the fourth quarter of 2011, as well as an increase in Zakat provision. Nonetheless, Saudi Kayan managed to move up to position 28, with a market capitalisation of $7.9bn. The company only began commercial operations on 1 October 2011, so production is still in the ramp-up phase and it has yet to see a full year of sales. Saudi Kayan is a 35:20 joint venture between Sabic and AlKayan Petrochemical Company, with the remaining 45 per cent of shares publicly held.

New petrochemicals producers

Yanbu National Petrochemical Company (Yansab) is another new petrochemicals producer in the kingdom, having commenced commercial operations on 1 March 2010. The firm, which is 51 per cent owned by Sabic, reported net profit of $846.4m for 2011, an increase of 90 per cent from $446m in 2010.

Rabigh Refining & Petrochemical Company (PetroRabigh) is one new producer to have experienced problems in the two years since its plant was commissioned, including power supply outages that interrupted operations. Net profit fell 68.4 per cent to SR65.9m in 2011, from SR208.7m in 2010. The firm dropped four places to 38.

Next year could see more Saudi petrochemicals companies join the MEED 100. Although the date for a flotation has yet to be set, there are plans to sell shares in Sadara Chemical Company, a joint venture between Saudi Aramco and the US’ Dow Chemical. The firm is building a $20bn petrochemicals complex at Jubail with full production set to begin in 2016.

Sadara, which will be one of the world’s largest integrated petrochemicals facilities, is expected to deliver annual revenues of about $10bn within a few years of operation. An initial public offering of Saudi Aramco Total Refining and Petrochemical Company is also still in the offing. A flotation of 25 per cent of shares in the company, whose refinery at Jubail is due for completion in 2013, has been expected since 2010.