Edited from: vice chairman's report, annual report and company website
SABIC believes that it is the “most consistently profitable” public company in the Middle East. “By creating a corporate environment which inspires innovation and talent we have positioned SABIC as one of the world’s largest petrochemical businesses. A new business model and continued investment commitment in plant and equipment will ensure we will achieve our long-term goals,” says vice chairman and chief executive officer, Mohamed Al-Mady.
However, SABIC says that although its actions and business decisions have always been made with a long-term view, it recognises that its plans will be impeded by short-term economic conditions and cycles which may arise.
“We are and have always been cautious and judicious in planning for the future use of our capital resources. Even though it is difficult to predict economic downturns, we are nonetheless fully capable of weathering economic storms and plan accordingly,” says Al-Mady.
Therefore, to counter the present economic slowdown and provide for its continued success, the company has implemented a wide range of measures to ensure SABIC emerges in a much stronger position as the recessionary cycle begins to change.
First it will proceed with its planned and ongoing investments in plants and equipment and it will continue to review other opportunities for investment which meet its long-term goals.
In addition, it has instituted a cost reduction programme to ensure all of its operations are maximising their potential in the present market without limiting the company’s ability to respond to existing customer needs as well as needs of new customers in the future as the financial climate improves.
“We intend on strengthening our existing relationships and building new partnerships as we move forward,” says Al-Mady.
SABIC states that its global operating model is based on the following strategic focus “dynamic growth through collaboration”. This it says encapsulates the vision of its path forward using a new operating model.
SABIC has also announced plans for a “comprehensive” restructure designed to achieve its short and long-term objectives and rationalise the company’s diverse strengths to better accomplish the goals set forth in its 2020 strategy to establish SABIC as the preferred world leader in chemicals.
“To be recognised as a world leader requires strong revenue and profitability, but it also requires an ongoing commitment to excellence in manufacturing, the ability to create value for our customers, effective management of our global talent and an atmosphere of innovation and unequalled technological know-how,” says Al-Mady.
SABIC says it has established a new organisation and operating model which will redefine how it will work and how it is organised, enabling it to achieve its vision and strategic ambition.
SABIC’s continuing strategy includes:
(1) focussing on its marketing efforts;
(2) improving productivity while maintaining high technical and quality standards;
(3) integration of its business activities; and
(4) training and career development of its employees.
“SABIC intends to be and will be a company that successfully manages the turbulence of economic storms and seizes opportunity to achieve long-term growth,” concludes Al-Mady.
Please see SABIC plans SR 10bn private bond sale to fund expansions on ICIS news.
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Financial highlights: Sabic, year ended 31 December
Sales (Riyal m)
Operating Profit (Riyal m)
Net Profit (Riyal m)
Total Assets (Riyal m)
Diluted earnings per share (Riyal)
Number of Employees
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Saudi Basic Industries Corporation (SABIC) is a manufacturer of chemicals, fertilizers, plastics and metals. SABIC claims that it is the largest and most profitable non-oil company in the Middle East and one of the world’s top ten largest petrochemicals manufacturers. The origins of SABIC come from a decision made by Saudi Arabia in the 1970s to use the flared associated gases from its oil well heads to make value-added industrial commodities. In September 1976, SABIC was established to add value to Saudi Arabia's natural hydrocarbon resources.
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