EPCA ’18: SABIC’s stake at Clariant strategic, firms to create more synergies in Q1 - CEO

Author: Jonathan Lopez


VIENNA (ICIS)--SABIC’s 24.99% stake in Swiss chemicals producer Clariant is a “strategic” move and more synergies between the two companies will be announced in the first quarter of 2019, the CEO of the Saudi petrochemicals major said on Tuesday.

Yousef Al-Benyan also confirmed that SABIC had paid “around” Swiss francs (Swfr) 2bn ($2bn) for its 24.99% stake in the company.

On 3 October, SABIC completed a $2bn bond issuance. US credit ratings agency  Moody’s assigned an investment grade A rating to the bonds due to its “strong global position” in petrochemicals and fertilizers as it has access to competitively-priced raw materials, the agency said.

“This acquisition is not meant to be just a financial investment. We are strategic players [in the chemical industry] and there are some other steps [which can be taken] for SABIC and Clariant to collaborate to bring strong synergies between both companies,” said Al-Benyan.

SABIC and Clariant announced the acquisition in January, ending a turbulent year for Clariant in which activist investors piled pressure on the board to carve out the company.

In September, the two companies said they are aiming to create a new high performance materials unit. The agreements also placed a SABIC executive, Ernesto Occhiello, as CEO of Clariant, effective 16 October.

The moves announced in September would be the first step towards SABIC taking full control of the Swiss player, according to some chemical equity analysts.

Al-Benyan, however, would not respond to questions about that being SABIC’s ultimate purpose.

“Now is subject to our new CEO and the board members of Clariant to decide what they are going to do… In the first quarter next year you will hear more news about synergies between SABIC and Clariant,” he said.

The Saudi major’s CEO was speaking on the sidelines of the European Petrochemical Association (EPCA) annual meeting in Vienna.

“We have already announced the collaboration and we look forward to [more collaborations]. We are the biggest shareholder of this company, and this is something that is going to be very interesting for the future of Clariant,” he said.

SABIC is a state-owned enterprise. Its drive downstream fits with the country’s push to diversify away from an economy highly dependent on crude oil production and into more downstream sectors in order to industrialise the country, which suffers high levels of unemployment.

The government’s drive has been named Saudi Vision 2030.

Saudi Aramco, the state-owned crude oil major, has also announced recently its intention to build a $5bn petrochemical complex in Jubail, in a joint venture with French energy and petrochemicals major Total.

The EPCA annual meeting runs in Vienna on 8-10 October.

Picture source: Xinhua News Agency/REX/Shutterstock

Interview article by Jonathan Lopez


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