SINGAPORE (ICIS)--SABIC’s specialties business is planning to double its profit in the next five years as it seeks to position itself as one of the biggest specialty chemical players globally, a senior company official said on Monday.
“Our goal… is to close to double our profit over the next five years, purely from organic growth,” Ernesto Occhiello, executive vice president of SABIC’s specialties business, told ICIS on the sidelines of the 12th Gulf Petrochemicals & Chemicals Association (GPCA) Forum in Dubai.
The company is not looking at demand growth figures or estimates for its specialty products as “it’s a waste of time”, he said. “We don’t look at volumes, revenues. We look at profit.”
The unit’s profitability over the next five years will be driven by its core engineering plastics but the business is “seeing the importance of differentiated offerings as well,” Occhiello said.
The main challenge to grow the specialties unit is time, he said.
“The development cycles of OEMs we serve are becoming faster and faster and therefore the development time of our offerings must become faster,” Occhiello said. “The key challenge is speed, we need to have to be the ability to always be there. People are not patient, if we don’t fulfil their requirements they will look at alternative offerings.”
The specialty chemicals’ revenues come mostly from three key manufacturing regions – North America, Europe and northeast Asia, according to Occhiello.
“We sell most of the time into these three regions,” he said, adding that while there has been some development for the specialty chemicals space in southeast Asia, the vast majority of SABIC’s specialties sales are into those key regions.
The specialty unit currently does not have any concrete plans to build any production units at the newly-unveiled crude to chemicals complex planned between Saudi Arabia and SABIC, Occhiello said.
“We are not a business where the competitive advantage is coming from feedstock and oil and chemicals is about providing competitive feedstock so its not just for us,” he said.
“We may build a plant there because there could be a specific advantage…, but the essence of the oil to chemicals [project] is to provide competitive advantage to the broader SABIC business and more specifically petrochemicals,” Occhiello.
“Oil to chemicals is not done for specialties, its done for the broader SABIC business,” he added.
Interview article by Nurluqman Suratman