25 March 2002 17:05 [Source: ICIS news]
SAN ANTONIO, Texas (CNI)--Saudi Basic Industries Corp (Sabic) underlined on Monday its commitment to expand globally through alliances or acquisitions of chemical companies in developed nations.
Nasser Al-Sayyari, president of Sabic’s basic chemicals group, told delegates here at the 27th annual International Petrochemicals Conference (IPC) that Sabic was poised to take advantage of the expected economic upturn by focussing its efforts globally and using its feedstock advantages to enhance its market position.
He said Sabic was determined not just to ship its products to every major consuming region but also to manufacture in areas closer to its key customers. However, he declined comment on the status of Sabic’s negotiations to buy Dutch group DSM’s petrochemicals business or its talks with Italy’s Eni over its Polimeri Europa assets.
Al-Sayyari said Sabic was also committed to the development of its own technologies to help it penetrate new markets and reach deeper into existing markets.
Although he conceded that profitability in the global petrochemicals industry was likely to remain depressed into 2003, Al-Sayyari said it was possible to at least begin to see better times ahead.
He said Sabic would be ready to take part in the expected global resurgence and he forecast a significant improvement in olefins markets in 2004-06.
Al-Sayyari said large petrochemical players, particularly those with extensive resources to fund research and development (R&D), would be best placed to weather the current downturn.
Sabic, along with most major petrochemical groups, suffered a major drop in earnings last year. Net profits sank to Riyal 1.78bn ($475m/Euro544m) from Riyal 3.63bn due to weak prices, particularly for polyethylene (PE), styrene and ethylene dichloride (EDC).
Sales rose 9% to Riyal 28.9bn last year thanks to a 28% increase in sales volumes to 27.4m tonne, while total production rose 26% to 35.4m tonne.
Al-Sayyari said prices across many products last year reached an all-time low. But he expressed optimism in the move towards greater liberalisation of world trade and said he was particularly encouraged by China’s membership of the World Trade Organisation (WTO).
Al-Sayyari added that Sabic’s ability to build relationships beyond the Gulf would be enhanced by moves to conclude a free trade agreement between the European Union (EU) and Gulf Co-operation Council (GCC) states. In addition to Saudi Arabia, the GCC member states include Bahrain, Kuwait, Oman, Qatar and the UAE.
The IPC, which is sponsored by the National Petrochemical & Refiners Association (NPRA), continues through Tuesday.
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