Sabic, the Middle East’s largest petrochemicals company, has started commissioning activities and is preparing to start its joint venture project with energy major ExxonMobil in the US Gulf Coast.
The chemicals producer, which is majority owned by the world’s largest oil exporting company Saudi Aramco, established a petrochemical joint venture project with ExxonMobil in 2019, the Riyadh-based company said in a filing on Sunday to the Tadawul Stock Exchange, where its shares trade.
The project includes the establishment of an ethylene production unit with annual capacity of about 1.8 million tonnes, which will feed two polyethylene units and a monoethylene glycol unit, it said.
Saudi Aramco holds a 70 per cent stake in Sabic, in which it acquired shares worth $69.1 billion from the kingdom’s sovereign wealth fund, the Public Investment Fund, in 2019.
Sabic expects the project to have a positive impact on its consolidated financial statements after commercial operations begin, the company said.
“This project supports Sabic’s global growth strategy, diversifying its feedstock sources and strengthening its petrochemical manufacturing presence in North America for a wide range of products."
Sabic swung to profit in the second quarter this year, earning 7.64bn Saudi riyals ($2bn) after posting a 2.22bn riyals loss in the same period last year.
This project supports Sabic’s global growth strategy, diversifying its feedstock sources and strengthening its petrochemical manufacturing presence in North America
Sabic
Saudi Aramco said in April this year that they would transfer the marketing and sales responsibility for a number of the oil company’s petrochemicals and polymers products to Sabic.
The companies will also designate the Aramco Trading Company to off-take and resell Sabic’s products.
The changes will be implemented in a phased manner this year and are subject to consent from both parties.
“The transfers reflect our shared commitment to capitalise on the complementary nature of Aramco and Sabic’s respective product portfolios as we strive to create added value for our customers and shareholders,” Ibrahim Al Buainain, Aramco Trading Company’s president and chief executive, said.
In April this year, Sabic shareholders also approved a dividend of 4.5bn riyals for the second half of 2020, taking the payout for the entire year to 9bn riyals.
Saudi Investment Recycling Company, a subsidiary of the PIF, signed an agreement with Sabic in April to set up a venture to use recycled plastic feedstock.
The agreement between the two companies also includes a feasibility study on the construction of a chemicals recycling plant in Saudi Arabia to convert mixed plastic waste into pyrolysis oil.
With its headquarters in Riyadh, Sabic has operations in more than 50 countries with 34,000 employees. In 2018, its consolidated production volume across its various business units was 75 million tonnes, and it recorded net income of $5.7bn, with annual sales of $45bn, and had total assets of $85bn.
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UAE currency: the story behind the money in your pockets
Bert van Marwijk factfile
Born: May 19 1952
Place of birth: Deventer, Netherlands
Playing position: Midfielder
Teams managed:
1998-2000 Fortuna Sittard
2000-2004 Feyenoord
2004-2006 Borussia Dortmund
2007-2008 Feyenoord
2008-2012 Netherlands
2013-2014 Hamburg
2015-2017 Saudi Arabia
2018 Australia
Major honours (manager):
2001/02 Uefa Cup, Feyenoord
2007/08 KNVB Cup, Feyenoord
World Cup runner-up, Netherlands
Top investing tips for UAE residents in 2021
Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.
Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.
Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.
Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.
Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.
Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.
Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”
Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI.
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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
