The performance of Saudi Kayan has been disappointing for everyone involved. Both retail investors and Sabic are well aware that the firm faces a difficult future.

Expectations of when the company might become profitable have been repeatedly pushed back due to operational problems and fluctuating feedstock prices. Saudi Kayan may not have a profitable year until 2014, despite going into commercial operation in 2011, and some analysts fear it could be later than that.

As a result, the firm’s shareholders have yet to receive any dividend on their investment. The share price on 12 September was SR12 after declining over the past year. This is still up 20 per cent on the IPO price, but after six years and a flotation price that was intended to generate wealth for retail investors, not much upside has been created. Many analysts are recommending investors hold or sell the stock, suggesting the price may dip further.

Before shareholders can start to expect significant gains from their investment, the company has to repay the $12bn of debt incurred to fund construction of the Jubail facilities. Any further problems will significantly affect Saudi Kayan’s ability to achieve this.

Expansion of the firm’s products may help improve the picture, but this strategy continues to carry execution risks and suggests Sabic will need to become more involved in the management and operation of the facilities. Sabic will also need to use some of its significant influence over local banks to ensure Saudi Kayan’s sources of funding remain cheap.

If the Jubail complex does start to become profitable next year, it will mark a significant turnaround in the fortunes of Saudi Kayan, and will help to reverse what has so far been a disappointing investment for all concerned.