Sabic subsidiary Saudi Arabian Fertiliser Company (Safco), which earned a net profit of SR254.5 million ($67.85 million) in 2000, will raise its capital to SR2 billion ($533 million) by issuing one bonus share for every three shares.

A Safco board meeting also recommended a dividend payment of SR180 million ($48 million) at the rate of SR6 per share.

The dividend amount represents a 140 per cent increase compared with last year's figure. Safco chairman and managing director Mohamed Al Mady said the board's decision to raise capital was taken in recognition of the company's improved performance and growth requirements. The board was also keen on fulfilling the expectations of shareholders who were pleased with the company's performance in 2000.

Al Mady attributed the improved performance to higher demand and better prices in the global fertiliser market. He noted that higher oil prices had led to an increase in fertiliser imports, particularly in the US, as local production became less economical.