Sipchem gears for growth after long wait



DUBAI // It took a big hit in profitability last year, but pre-recession investments are paying off for Saudi International Petrochemical Company (Sipchem). Sipchem has waited three years for its 4 billion riyal acetyl products complex to be built in Jubail, Saudi Arabia. But now the job is complete, and this new production facility is expected to be a catalyst for growth, says Global Investment House, the largest investment bank in Kuwait, which yesterday put a "buy" recommendation on the stock.

Global has raised its "fair value" estimate for the company to 29.5 riyals per share, more than 23 per cent above yesterday's stock close of 22.7 riyals on the Saudi bourse. "Sipchem's future growth is mainly associated with the newly built acetyl complex," Global said in an advisory note to investors on Wednesday. The complex's production structure, Global said, would allow Sipchem to further strengthen economies of scale and improve its overall capacity utilisation, while reducing its dependence on methanol sales, which face tough regulatory issues in western markets.

"This will translate into an improvement in the company's future profitability margins during 2010-2013," Global said. The complex will also allow Sipchem's overall production to rise at a compound annual rate of 31.9 per cent for the next four years, reaching 2 million tonnes in 2013. The company's profit fell 73.8 per cent last year, mainly because of a steep drop in the average price of petrochemical products as the global economy slipped into recession. Sales fell 51.4 per cent to 830 million riyals.

This year, however, Sipchem could see its fortunes rebound. Global expects revenue almost to double. Sipchem's profitability and gross margins could both show "remarkable recovery" this year, the investment bank added. It forecasts after-tax profit for Sipchem this year of 390.7m riyals, a 177.4 per cent improvement from last year. Sipchem makes methanol from natural gas and benefits from Riyadh's generous gas subsidies. It will now be able to convert part of its methanol output into acetyl products, for which more robust demand is expected.

skhan@thenational.ae tcarlisle@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Golden Shoe top five (as of March 1):

Harry Kane, Tottenham, Premier League, 24 goals, 48 points
Edinson Cavani, PSG, Ligue 1, 24 goals, 48 points
Ciro Immobile, Lazio, Serie A, 23 goals, 46 points
Mohamed Salah, Liverpool, Premier League, 23 goals, 46 points
Lionel Messi, Barcelona, La Liga, 22 goals, 44 points

FIXTURES

All kick-off times UAE (+4 GMT)
Brackets denote aggregate score

Tuesday:
Roma (1) v Shakhtar Donetsk (2), 11.45pm
Manchester United (0) v Sevilla (0), 11.45pm

Wednesday:
Besiktas (0) v Bayern Munich (5), 9pm
Barcelona (1) v Chelsea (1), 11.45pm

Company Profile

Name: JustClean

Based: Kuwait with offices in other GCC countries

Launch year: 2016

Number of employees: 130

Sector: online laundry service

Funding: $12.9m from Kuwait-based Faith Capital Holding

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

KEY DATES IN AMAZON'S HISTORY

July 5, 1994: Jeff Bezos founds Cadabra Inc, which would later be renamed to Amazon.com, because his lawyer misheard the name as 'cadaver'. In its earliest days, the bookstore operated out of a rented garage in Bellevue, Washington

July 16, 1995: Amazon formally opens as an online bookseller. Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought becomes the first item sold on Amazon

1997: Amazon goes public at $18 a share, which has grown about 1,000 per cent at present. Its highest closing price was $197.85 on June 27, 2024

1998: Amazon acquires IMDb, its first major acquisition. It also starts selling CDs and DVDs

2000: Amazon Marketplace opens, allowing people to sell items on the website

2002: Amazon forms what would become Amazon Web Services, opening the Amazon.com platform to all developers. The cloud unit would follow in 2006

2003: Amazon turns in an annual profit of $75 million, the first time it ended a year in the black

2005: Amazon Prime is introduced, its first-ever subscription service that offered US customers free two-day shipping for $79 a year

2006: Amazon Unbox is unveiled, the company's video service that would later morph into Amazon Instant Video and, ultimately, Amazon Video

2007: Amazon's first hardware product, the Kindle e-reader, is introduced; the Fire TV and Fire Phone would come in 2014. Grocery service Amazon Fresh is also started

2009: Amazon introduces Amazon Basics, its in-house label for a variety of products

2010: The foundations for Amazon Studios were laid. Its first original streaming content debuted in 2013

2011: The Amazon Appstore for Google's Android is launched. It is still unavailable on Apple's iOS

2014: The Amazon Echo is launched, a speaker that acts as a personal digital assistant powered by Alexa

2017: Amazon acquires Whole Foods for $13.7 billion, its biggest acquisition

2018: Amazon's market cap briefly crosses the $1 trillion mark, making it, at the time, only the third company to achieve that milestone

Living in...

This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home. 

'Worse than a prison sentence'

Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.

“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.

“They were living in perpetual mystery as to how their futures would pan out, and what that would be.

“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.

“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.

“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”

Feeding the thousands for iftar

Six industrial scale vats of 500litres each are used to cook the kanji or broth 

Each vat contains kanji or porridge to feed 1,000 people

The rice porridge is poured into a 500ml plastic box

350 plastic tubs are placed in one container trolley

Each aluminium container trolley weighing 300kg is unloaded by a small crane fitted on a truck

SPECS

Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

Results

Catchweight 60kg: Mohammed Al Katheeri (UAE) beat Mostafa El Hamy (EGY) TKO round 3

Light Heavyweight: Ibrahim El Sawi (EGY) no contest Kevin Oumar (COM) Unintentional knee by Oumer

Catchweight 73kg:  Yazid Chouchane (ALG) beat Ahmad Al Boussairy (KUW) Unanimous decision

Featherweight: Faris Khaleel Asha (JOR) beat Yousef Al Housani (UAE) TKO in round 2 through foot injury

Welterweight: Omar Hussein (JOR) beat Yassin Najid (MAR); Split decision

Middleweight: Yousri Belgaroui (TUN) beat Sallah Eddine Dekhissi (MAR); Round-1 TKO

Lightweight: Abdullah Mohammed Ali Musalim (UAE) beat Medhat Hussein (EGY); Triangle choke submission

Welterweight: Abdulla Al Bousheiri (KUW) beat Sofiane Oudina (ALG); Triangle choke Round-1

Lightweight: Mohammad Yahya (UAE) beat Saleem Al Bakri (JOR); Unanimous decision

Bantamweight: Ali Taleb (IRQ) beat Nawras Abzakh (JOR); TKO round-2

Catchweight 63kg: Rany Saadeh (PAL) beat Abdel Ali Hariri (MAR); Unanimous decision

THE BIO: Mohammed Ashiq Ali

Proudest achievement: “I came to a new country and started this shop”

Favourite TV programme: the news

Favourite place in Dubai: Al Fahidi. “They started the metro in 2009 and I didn’t take it yet.”

Family: six sons in Dubai and a daughter in Faisalabad

 

The pillars of the Dubai Metaverse Strategy

Encourage innovation in the metaverse field and boost economic contribution

Develop outstanding talents through education and training

Develop applications and the way they are used in Dubai's government institutions

Adopt, expand and promote secure platforms globally

Develop the infrastructure and regulations

UAE currency: the story behind the money in your pockets
Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Profile

Name: Carzaty

Founders: Marwan Chaar and Hassan Jaffar

Launched: 2017

Employees: 22

Based: Dubai and Muscat

Sector: Automobile retail

Funding to date: $5.5 million

THE BIO: Martin Van Almsick

Hometown: Cologne, Germany

Family: Wife Hanan Ahmed and their three children, Marrah (23), Tibijan (19), Amon (13)

Favourite dessert: Umm Ali with dark camel milk chocolate flakes

Favourite hobby: Football

Breakfast routine: a tall glass of camel milk

ETFs explained

Exhchange traded funds are bought and sold like shares, but operate as index-tracking funds, passively following their chosen indices, such as the S&P 500, FTSE 100 and the FTSE All World, plus a vast range of smaller exchanges and commodities, such as gold, silver, copper sugar, coffee and oil.

ETFs have zero upfront fees and annual charges as low as 0.07 per cent a year, which means you get to keep more of your returns, as actively managed funds can charge as much as 1.5 per cent a year.

There are thousands to choose from, with the five biggest providers BlackRock’s iShares range, Vanguard, State Street Global Advisors SPDR ETFs, Deutsche Bank AWM X-trackers and Invesco PowerShares.

if you go

The flights

Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.

The hotel

Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850

 Events and tours

There are various Mackintosh specific events throughout 2018 – for more details and to see a map of his surviving designs see glasgowmackintosh.com

For walking tours focussing on the Glasgow Style, see the website of the Glasgow School of Art. 

More information

For ideas on planning a trip to Scotland, visit www.visitscotland.com

The specs

Engine: 77kWh 2 motors
Power: 178bhp
Torque: 410Nm
Range: 402km
Price: Dh,150,000 (estimate)
On sale: TBC

A Dog's Journey 

Directed by: Gail Mancuso

Starring: Dennis Quaid, Josh Gad, Marg Helgenberger, Betty Gilpin, Kathryn Prescott

3 out of 5 stars


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