03 April 2002 14:32 [Source: ICIS news]
LONDON (CNI)--Saudi Basic Industries Corp (Sabic) confirmed on Wednesday that it is evaluating further acquisitions as part of its global expansion strategy.
Sabic vice chairman and managing director Mohamed Al-Mady said his company was committed to further expansion as part of its plans to become a leading global player in petrochemicals.
Al-Mady was speaking in Amsterdam after announcing a Euro2.25bn ($1.96bn) outline deal to buy the petrochemicals business of Dutch group DSM. The deal, which is expected to be completed by 30 June, will move Sabic from 22nd to 11th position in the global petrochemical league. It will also establish the Saudi government-controlled company as the world's third largest polyethylene (PE) player and fourth biggest polypropylene (PP) producer.
But Al-Mady has further plans to move Sabic's production base closer to its major customers. Although he did not respond directly to a question about the status of Sabic's negotiations to buy a stake in Italy's Polimeri Europa, Al-Mady did stress that Sabic's strategy was to continue growth "either organically or by acquisition" in Saudi Arabia, within the Gulf Co-operation Council (GCC) region and internationally.
"We are happy to conclude our first acquisition," said Al-Mady in reference to the DSM deal, "and we are evaluating other opportunities around the world."
Al-Mady said Sabic planned to invest in the acquired DSM activities and emphasised that his company had no problems in finding the money to fund further expansion. "The limitation is going to be finding the right opportunities."
Last week Nasser Al-Sayyari, president of Sabic’s basic chemicals group, said his company 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. In a speech at last week's International Petrochemicals Conference (IPC) in San Antonio, Texas, 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.
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