ICIS Top 100 Chemical Companies: Middle East and Africa

Saudi Arabia’s SABIC continues to be by far the largest chemical player in the Middle East and Africa region, with sales nearly five times that of nearest challenger, South Africa’s Sasol.

SABIC’s turnover for 2013 of Saudi riyal (SR) 189bn ($50.4bn) was, however flat, showing no change on the 2012 figure due to the challenging market conditions especially in developed economies. Nevertheless, it retained its overall global position of fifth place, after BASF, Sinopec, ExxonMobil Chemical and Dow Chemical.

SABIC’s earnings improved slightly in 2013, with net income advancing 2% to SR25.3bn. SABIC described the year as one of “solid performance… despite continued challenges in the global economy.” It has, it added, “beaten the market average on improved efficiency and strong performance in key sectors.”

Looking forward, vice chairman and CEO Mohamed Al-Mady noted that: “The global chemical sector has turned the corner, with sales volumes starting to stabilise and even pick up. We believe the sector will see better growth, with demand outpacing capacity for the next three years or so.”

Fellow Saudi Arabian producer Tasnee, in sixth spot with sales of $4.9bn, also struggled to grow revenue, with sales up just 1.6% in local currency terms.

The big change in the Middle East and Africa ranking this year has been the disappearance of Iran’s state-owned NPC. With sales of $9bn in 2012 this ranked third last year in the regional table and 50th in global terms. Privatisation of the oil and chemicals sector in the country has created three new players that rank in the table this year: Persian Gulf Petrochemical Industry, Parsian Oil & Gas Development and TAPPICO, in third, fifth and seventh place, pushing out Kuwait’s PIC and South Africa’s AECI from the bottom of the table.

Abbas Sha’ri Moghadam, Iran’s deputy petroleum minister and president of NPC, said at the recent 11th International Iran Petrochemical Forum in Tehran that NPC, which operates under Iranian Petroleum Ministry, has undergone a vast transformation. As a holding company, it used to have more than 50 production and service companies, but it has now privatised most of these.

The only state-run units at NPC are now R&D, the Mahshahr Special Economic Zone and the $4bn Damavand petrochemical project.

NPC will continue to functioning as a company with governance and development tasks, he added. The firm is to provide the required infrastructure and incentives for investment in petrochemicals.

In Israel, ICL and Makhteshim-Agan, now known as Adama Agricultural Solutions, had diverse fortunes, with ICL seeing sales down 3.1% in local currency terms to $6.3bn, and Adama enjoying an increase of 8.5%, to $3.1bn.

Adama reported a year of solid growth in sales and earnings despite an unfavourable currency environment especially in its Asia-Pacific region and Brazil. It achieved growth across all regions; higher sales volumes and an improved product mix that led to improvement in financial performance. The results in Latin America benefited from positive market conditions in the region.

At ICL, lower selling prices were noted as primarily being behind the sales slide. The company is looking to save several hundred million 
dollars by 2016. The initiative is critical, it says, “under the current climate of weak markets, increased competition in the markets and an unstable business environment”.

In South Africa, Sasol saw sales rise 11% in 2013, but earnings were down substantially due in large part to issues in the polymers business. The company has now withdrawn fully from its joint venture operations in Iran, Arya Sasol Polymer, which resulted in an impairment charge against operating profit of rand 3.6bn ($340m).