SABIC to boost employment through expansion

04 April 2007 08:10  [Source: ICIS news]

By Matt Kovac

SINGAPORE (ICIS news)--Expansion of production capacity at Saudi Basic Industries Corp (SABIC) should help spur employment to more than 25,000 over the next 13 years, an analyst report said on Wednesday.

SABIC’s current and planned investment in overall capacity expansion is expected to reach US$25bn over the next five years, Bahrain-based Taib Research said.

This would foster growth in its annual production capacity from 47m tonnes in 2005 to 130m tonnes by 2020, which would swell the labour pool at the company, Taib added.

"This will not only increase manpower to more than 25,000, but also facilitate the development of the Arabian economy through finer governance and corporate social responsibility," said the report.

Countries across the Middle East have set similar strategies to solve unemployment by singling out petrochemicals and manufacturing as the solution.

A report last week by Saudi-based investment group Arab Petroleum Investments Corporation (Apicorp), said unemployment in the region was running at around 12%, double the world’s average.

Apicorp said that petrochemicals alone would not solve unemployment or an impending fiscal challenge faced by governments in the region.

Separately, Sabic should maintain its dominant position in the Middle East partly because of its backing from the Saudi Arabian government and its size relative to the market, added Taib.

However, the company will face stiffer competition in the future from Asia, particularly China, as it increases production capacities and may have to contend with potential oversupply in the market, the report said.

By: Matt Kovac
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