Interview: Sumitomo Chem banks on Rabigh

21 March 2007 03:50  [Source: ICIS news]

By Cheok Soh Hui

SINGAPORE (ICIS news)--Sumitomo Chemical’s Rabigh project will become a major contributor to the Japanese major’s fiscal 2009 net income while it also planned to expand operations at its other divisions, a senior company official said.

The $9.8bn joint venture complex in Rabigh, Saudi Arabia, to start up in the second half of 2008, will contribute yen (Y) 40bn ($340.4m) to its net income in the year ending 31 March 2009, its president Hiromasa Yonekura told ICIS Chemical Business.

"The source of the project’s potential high profitability is our ability to procure cost-competitive ethane feedstock," he added.

Sumitomo, which unveiled its three-year corporate business plan for fiscal 2007-2009 earlier this month, is focusing on its Rabigh project to boost earnings for the group. The company is targeting sales of Y2,400bn and net income of Y150bn in fiscal 2009.

For its other divisions, Sumitomo planned to allocate 70% of its strategic investment to its life science and IT-related materials businesses over the next three years where it has technological strengths and can expect high growth, he added.

The company has pledged Y370bn in the same period for strategic and maintenance investment combined, but Yonekura declined to provide a breakdown.

The company aimed to be one of the top global three manufacturers of active pharmaceutical ingredients (APIs) and pharmaceutical intermediates, with total sales in the fine chemicals business projected to reach Y110bn in fiscal 2009 compared with Y79bn in fiscal 2005, Yonekura said.

"We are considering M&As (mergers and acquisition) as a means of strengthening and supplementing our portfolio of products and technologies," he added, but did not elaborate further.

The company was also studying a polypropylene (PP) compounding plant in the US amid firm demand from Japanese auto makers there, Yonekura said.

(The full interview will be published in ICIS Chemical Business.)

($1=Y117.5)

By: Cheok Soh Hui
+65 6780 4359

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