Sabic profits soar

31 January 2003
Net income at Saudi Basic Industries Corporation (Sabic)increased by 60 per cent to SR 2,844 million ($758.4 million) thanks to an 18 per cent rise in sales and the stability of petrochemicals prices, the company announced on 25 January. Total sales increased to SR 34,000 million ($9,060 million), while production jumped by 15 per cent to 40.6 million tonnes. The results mark a strong turnaround in the performance of Sabic, which had seen net income slump by 51 per cent in 2001 due to a sharp drop in world petrochemical prices (MEED 15:2:02).

Sabic vice-chairman and managing director Mohamed al-Mady described the 2002 figures as encouraging and said he expected the positive trend to continue into the first quarter of 2003. 'The acquisition of DSM Petrochemicals, our restructure, our business transformation project and the closure of a number of major long-term contracts have all helped play a role in these successful results,' he said.

The highlight of 2002 was Sabic's purchase of Netherlands-based DSM Petrochemicals, its first acquisition in the European petrochemicals market, for $1,983 million. Sabic EuroPetrochemicals, as the Dutch venture is now known, comprises two petrochemical production sites which market about 2.6 million tonnes a year (t/y) of polymers (MEED 5:4:02).

Sabic also embarked on a major restructuring to increase efficiency and improve customer services. A new management model was introduced and the company's activities were organised into six strategic business units: basic chemicals; intermediates; polyolefins; polyvinyl chloride (PVC) & polyester; fertilisers; and metals. A shared services company will become operational later this year (MEED 7:6:02).

Sabic's main project focus is the expansion of the Jubail complex belonging to Sabic affiliate Saudi Fertiliser Company (Safco),for which four groups submitted bids in September. Sabic aims to increase production to 48 million t/y by 2010 (MEED 4:10:02).

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