Saudi Basic Industries Corporation (Sabic) reported record profits of SR14.24 billion ($3.79 billion) for 2004, up 113 per cent over the previous year and despite a deduction of SR1.5 billion, which was in compliance with the verdict passed by the Supreme Court of the US state of Delaware in favour of a litigation filed against it by ExxonMobil.

“This is the highest ever profit earned by Sabic ever since its inception. This was achieved due to our continuous focus on production, technology upgradation, reduction in operation costs and improved services in marketing and customer development,” said vice chairman and CEO Mohamed Al Mady.
Production in Sabic facilities reached 42.9 million tonnes, total sales in volume 33.3 million tonnes and sales revenue SR68.738 billion. The sales value was a 47 per cent increase over the 2003 figure, making Sabic the largest company in the Middle East in terms of revenues.
One of the top-performing affiliates was Saudi Arabian Fertiliser Company (Safco), which announced a profit increase of SR408.6 million. Al Mady attributed the rise to an improvement in revenues of 21 per cent on each metric tonne of urea and 45 per cent on each metric tonne of ammonia. “For the foreseeable future, prices should stabilise,” he said.
Sabic this year launched several projects as part of an overall expansion programme to bring annual production capacity to 60 million tonnes.
Foundation stones were laid recently for the Hadeed expansion project, Safco Expansion Project 4, and Ar Razi Expansion Project 5.
The company is investing SR24 billion to fund projects including new petrochemical plants in Yanbu for 3.8 million metric tonnes per year (tpy) of ethylene, ethylene glycol (EG), polyethylene and polypropylene products. These plants are scheduled to come on stream in 2007.
Expansions will be created at the Eastern Petrochemical Company (Sharq) to add capacity of 2.9 million tpy of ethylene, polyethylene and EG by 2008. Sharq is a 50:50 joint venture between Sabic and SPDC, a Japanese consortium headed by Mitsubishi.
Capacity is also being provided for an additional 1 million tpy of flat steel products at the Saudi Iron and Steel Company (Hadeed) with production scheduled for 2006.
An additional capacity of 1.7 million tpy of methanol will be installed at the Saudi Methanol Company (Ar-Razi). The new unit is scheduled for production in the latter half of 2007 and will make Ar-Razi, a 50:50 joint venture with Mitsubishi, the largest single methanol-producing complex in the world.
By 2006, Sabic’s total EG production is expected to reach 3.5 million tpy, meeting over 20 per cent of global demand. Out of this, 1.5 million tpy will be produced at Sharq in Al Jubail, 1.20 million tpy at United and 800,000 tpy at Yanpet (Saudi-Yanbu Petrochemical Company, Yanbu).
Additional EG capacity of 700,000 tpy will be available in 2007 when another recently announced plant gets completed in Yanbu
Ethylene glycol is the primary feedstock for polyester manufacturing. It is used in anti-freeze, marine engines, x-rays and luggage.
“Sabic has built up a highly qualified and well-trained Saudi industrial generation of 11,000 engineers, technicians and skilled labour. It successfully migrated from products manufacturing and marketing to innovation and export of technologies,” said Al Mady.
Thanks to Sabic’s eminent position in Middle East industry, its counsel is greatly respected.
Vice president of polyolefins Dr Abdulrahman Al Ubaid has called for mergers and a closing of the ranks among plastic companies in the region.
“There are more than 580 downstream plastics manufacturers in Saudi Arabia. Of those, 20 per cent consume nearly 60 per cent of plastic feedstocks sold in the kingdom. Consolidation and mergers of the smaller manufacturers would help those companies achieve an optimum utilisation of facilities and capacities, reduce expenses and minimise the cost of finished products,” Al Ubaid said.
The official added that Sabic undertook numerous activities to benefit plastic product manufacturers in the kingdom. In addition to its research and technology facilities, the company had created an applied research division for polymers at King Saud University and promoted scientific research through the Crown Prince Abdullah International Scientific Prize. The company had also been instrumental in establishing the Saudi Chemical Association and developing an institute for plastics industries.
“Sabic is the world’s third largest producer of polyethylene, the sixth largest producer of polypropylene and, overall, the fourth largest producer of polyolefins. Its position as a leading player in the global petrochemical sector strengthens the competitiveness of the Saudi plastics manufacturers and related downstream industries,” he said.