SAUDI ARABIA: Petrochemical giant Saudi Basic Industries Corp (SABIC) hopes to expand to China and expects to boost its production levels to sixty-three billion tonnes by 2008

Record ID: 189417

  • Title: SAUDI ARABIA: Petrochemical giant Saudi Basic Industries Corp (SABIC) hopes to expand to China and expects to boost its production levels to sixty-three billion tonnes by 2008
  • Date: 24th November 2005
  • Summary: REPORTERS AT NEWS CONFERENCE
  • Embargoed: 9th December 2005 12:00
  • Keywords:
  • Location: Saudi Arabia
  • Country: Saudi Arabia
  • Topics: Industry
  • Reuters ID: LVA3QTQ9P3IB8PHWIVMJS8YNUM1Y
  • Story Text: Petrochemical giant Saudi Basic Industries Corp (SABIC) hopes to expand in China and Europe and expects a boost from Saudi Arabia's accession to the World Trade Organisation, its chief executive said on Sunday (November 20). Mohammad al-Mady also said the firm was studying a bond issue to finance European investments, but not before its SABIC Europe affiliate is given a credit rating.
    The company still planned a domestic bond issue before the end of the year, he said. Mady said that Saudi Arabia's expected accession to the World Trade Organisation next month would be positive for the company, although it already had good access to international markets. SABIC's nine-month profits rose to $3.92 billion this year, 54 percent up on the same period in 2004. But third-quarter profits were only just up on the second quarter, suggesting a slowdown in previously galloping profit growth. "Petrochemical prices started out very well in 2005," Mady said. "We have felt that in the third quarter and the start of the fourth quarter there has been a kind of drop in prices," Mady told reporters at SABIC headquarters in Riyadh. Mady said it was not clear yet if the fall was due to higher supply, or the impact of higher oil prices on demand. He said crude oil prices were expected to remain high in 2006, but to be around $50 and not near the $70 hit last August. SABIC plans a 1 billion riyal ($270 million) domestic bond issue soon, one of the first in the kingdom . "Actually we have done this not because we need money. SABIC has a good cash flow. We have done this because we are pre-empting the future requirement for money and we would like to establish SABIC," Mady told reporters. "We don't want someone else to hit the market before us, we want to be ahead of everybody so that we can set the terms and conditions for issuing the bond. So we are going for one-bilion (Saudi Arabian) Riyals which we will achieve that before the end of the year," he added Mady said that SABIC, the biggest non-oil company in the Middle East, has planned to invest up to $23 billion in new projects between 2003 and 2008.
    SABIC plans to increase annual output to 64 million tonnes by 2008 from 43 million tonnes. SABIC was established in 1976 to add value to Saudi Arabia's natural hydrocarbon resources. Today, SABIC is among the leading petrochemical companies in terms of sales and product diversity.
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