Sabic restructuring to boost efficiency

07 June 2002

Saudi Basic Industries Corporation (Sabic)has extensively restructured to increase its global competitiveness and enhance customer service. The company will now have six strategic business units (SBUs), including five product SBUs and a global businesses SBU, and one shared services company. The restructuring will take effect from 1 September this year, except for the shared services company, which will come into operation in 2003.

The five product SBUs will be basic chemicals, intermediates, polyvinyl chloride (PVC) and polyester, polyolefins, fertilisers and metals. Until now, there have been 14 SBUs making up five industry groups. Each of the old industry groups has now become an SBU, with the polymers industry group splitting into the polyolefins SBU and the polyester and PVC SBU. The global businesses SBU will include DSM Petrochemicals, which was acquired by Sabic in April (MEED 5:4:02).

'These changes are essential to increase our competitive advantage in anticipation of future developments in our served markets, as a response to increased globalisation and in order to fulfil our vision of becoming a global leader in the industry,' said Sabic vice-chairman and managing director Mohamed al-Mady. 'Our recent experiences with the SBU model and our continued drive to increase our effectiveness and lower costs have helped us develop this new structure, building on the firm foundations laid down four years ago. It will enable fast decision making and increase business accountability.'

The shared services company is to be introduced to encompass Sabic's use of SAP Arabiabusiness solutions and server technology, which is expected to achieve large economies of scale across the company.

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