SABIC plans US$8bn petrochem investment

09-Jun-05

The current and planned investment for Saudi Basic Industries Corp.'s (SABIC's) production expansion totals more than US$ 8 billion. Additional worldwide investments are being considered to increase production to over 60 million tpa by 2008, in order to improve the company's overall position and global competitiveness. Over 80% of petrochemical exports from the Arabian Gulf region are produced and shipped by SABIC. With demand for petrochemicals rising, and global demand for polyolefins expected to increase by 7% pa through 2008, the company's growth potential has never been greater. As global economic expansion sustains its momentum, with annual growth at a steady 4% expected in 2005, Sabic will focus on expansion in the Americas, Europe, Asia and the Middle East. As per Sabic's Annual Report 2004, a record production volume in 2004 has enabled SABIC to rank as one of the world's largest exporter of granular urea; second largest producer of ethylene glycol, methanol and MTBE; third largest producer of polyethylene; sixth largest producer of polypropylene; and overall the fourth largest producer of polymers. Sabic has recorded net profits of SR14.2 billion (US$3.8 billion) for 2004, an increase of 112% over the precious year. Revenues from sales increased to SR68.5 billion (US$18.4 billion) making it the largest and most profitable public company in the Middle East. Total assets at the end of 2004 exceeded SR125 billion (US$33 billion). SABIC's expansion activities underway or announced in 2004 include: o Construction of new petrochemical plants in Yanbu to produce 3.8 million tpa of ethylene, ethylene glycol, and polyethylene and polyethylene products, to come on stream in 2007. o Further expansion at the Eastern Petrochemical Company (SHARQ) will add 2.9 million tpa of ethylene, polyethylene and ethylene glycol by 2008. o Saudi Petrochemical Company (SADAF) announced plans to build a third, world-scale styrene plant to increase its production capacity by over 60% and make it the world's largest single-complex producer of styrene. o The construction of a linear alpha olefins plant which will be constructed at Jubail by United Petrochemical Company (UNITED) and is scheduled for completion in 2006.