Yousef Al Benyan, the vice chairman and chief executive of Sabic, says that regional players needed to extend their offerings. Faisal Al Nasser / Reuters
Yousef Al Benyan, the vice chairman and chief executive of Sabic, says that regional players needed to extend their offerings. Faisal Al Nasser / Reuters
Yousef Al Benyan, the vice chairman and chief executive of Sabic, says that regional players needed to extend their offerings. Faisal Al Nasser / Reuters
Yousef Al Benyan, the vice chairman and chief executive of Sabic, says that regional players needed to extend their offerings. Faisal Al Nasser / Reuters

Sabic to boost overseas investments with joint venture in the US


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Saudi Basic Industries Corporation (Sabic), one of the world's largest petrochemical producers, is looking to increase its overseas investments next year with a joint venture in the United States, according to its chief executive.

Yousef Al Benyan, the vice chairman and chief executive of the Riyadh-based company, said on Monday that consolidation was necessary to strengthen the GCC downstream industry to bring it to the next level of sophistication. He said that Sabic had investment options to help the company achieve its strategic target for 2025.

“We are looking to start a joint venture in the United States as well as looking to expand with our existing partners like Sinopec and ExxonMobil for different regions,” Mr Al Benyan said on the sidelines of the GPCA Forum in Dubai, declining to give further details.

Yet the sector will continue to face a rocky road ahead as the lines between exporting and consuming markets begin to shift. The global petrochemical sector, linked to the price of crude oil, has been hurt by the low commodity prices that have been a mainstay for over two years. Brent crude was trading at US$46.87 per barrel on Monday morning.

Sabic’s third-quarter profit fell by nearly 7 per cent with net income at 5.2 billion Saudi riyals (Dh5.09bn) for the three months to the end of September, compared with 5.6bn riyals a year earlier. Mr Al Benyan said that regional players needed to extend their offerings, adding more complex and competitive products.

“China and the United States are normally a source of demand but they are converting to becoming our competitors,” said Mr Al Benyan. “And keeping our current structure isn’t going to be sustainable for the next decades. The competitive landscape is shifting beneath our feet.”

Sabic said last year that it was looking to invest in Chinese and American companies to expand its technology capability. China plans to increase its output to reduce its imports, as it looks to coal as a cheap petrochemical feedstock.

In May, the Saudi Arabian producer signed an agreement with China’s Shenhua Ningxia Coal Industry Group to develop a greenfield petrochemical complex within three years.

“The only way our industry can survive and thrive is by creating synergies and optimising current assets,” Mr Al Benyan said. “A lack of a global network and assets can be leveraged, which might require more mergers and acquisitions.”

Sabic and Saudi Aramco announced this summer that they will partner for the first time to conduct a feasibility study to develop an oil-to-chemicals complex in the kingdom, which is expected to cost up to US$30bn. Although no time frame was originally given, Mr Al Benyan said that he expected there would be an update on the progress by the second half of next year.

Saudi Aramco plans to spend $300bn over the next 10 years for further investments. “We need to integrate the upstream and downstream businesses,” said Abdulaziz Al Judaimi, the business line head of downstream at Saudi Aramco.

Mr Al Benyan said the industry as a whole needed further mergers and acquisitions. “We need to consolidate and bring the industry to the next level or else small and medium-sized companies will find it difficult to maintain,” he said.

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Birthday: February 22, 1956

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Name: Qyubic
Started: October 2023
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Based: Dubai
Sector: E-commerce
Current number of staff: 10
Investment stage: Pre-seed
Initial investment: Undisclosed 

Defence review at a glance

• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”

• Prioritise a shift towards working with AI and autonomous systems

• Invest in the resilience of military space systems.

• Number of active reserves should be increased by 20%

• More F-35 fighter jets required in the next decade

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Tree of Hell

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Countries offering golden visas

UK
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Canada
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Indoor Cricket World Cup Dubai 2017

Venue Insportz, Dubai; Admission Free

Day 1 fixtures (Saturday)

Men 1.45pm, Malaysia v Australia (Court 1); Singapore v India (Court 2); UAE v New Zealand (Court 3); South Africa v Sri Lanka (Court 4)

Women Noon, New Zealand v South Africa (Court 3); England v UAE (Court 4); 5.15pm, Australia v UAE (Court 3); England v New Zealand (Court 4)