Sabic makes steel unit an affiliate as part of wider consolidation move

Regional steel makers have been hit hard by the construction industry slowdown while at the same time key raw materials including coking coal and iron ore have more than doubled in price.

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Sabic plans to make its steel unit an affiliate company, as the region's biggest petrochemical producer consolidates its operating units.

But the move should not be seen as preparing the ground for a sale, said Abdulaziz Sulaiman Al Humaid, the executive vice president metals at Sabic. He told the Middle East Iron and Steel Conference in Dubai the move would make the Saudi Iron and Steel Company, or Hadeed, more efficient. “The ownership is going to be the same and our customer base won’t see any change, but the key thing is being more efficient in our business,” he said.

“This has nothing to do with a sale of the company or it is not a sign of preparing the company for sale.”

Sabic aims to complete the process by July or August.

With assets worth more than US$90 billion, Sabic is one of the biggest petchem producers in the world. Hadeed represents about 10 per cent of its portfolio.

scronin@thenational.ae

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