While Saudi Basic Industries Corporation has set record profits, others have seen projects delayed
Two issues that made the news regarding the Saudi petrochemicals sector this week could not have been more different.
The first one involved Saudi Basic Industries Corporation’s (Sabic) third quarter profits of $2.1bn that set a record for the company and were up by 54 per cent year-on-year.
The other revolved around the news that the $1bn Dammam 7 project has been postponed by its developer until further notice for reasons unknown.
What must be especially galling for those involved in the Dammam 7 scheme is the knowledge that it is a great project, but it just cannot seem to get off the ground.
These two issues are an excellent example of the fine line companies must tread in the kingdom between success and failure.
It was not long ago that Sabic was writing off hundreds of millions of dollars and tackling issues on all fronts ranging from anti-dumping levies in China and India, as well as a global slump in demand for its products.
Now, it is poised to be one of the strongest chemical companies in the world with a diversified portfolio of products that is laying the foundations for the kingdom’s drive to add further value to its oil.
The Dammam 7 project on the other hand proves just how difficult it is for an independent company to put everything in place to successfully build a plant.
The complex would have been the largest acrylic acid and acrylates plant in the world and had strong regional backing. So where does the problem lie?
Whatever is causing the delay is open to speculation, but when an independent firm competes with companies like Sabic and Saudi Aramco in the kingdom, it will always find it tough to get its project off the ground.
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