SABIC Eyes Polyurethanes, More Polycarbonate
Oct27

SABIC Eyes Polyurethanes, More Polycarbonate

Saudi Basic Industries held the first official press conference at the K 2010 plastics show in Düsseldorf earlier today, and there, CEO Mohamed Al Mady disclosed his company‘s designs on getting into the polyurethanes industry. Al Mady said that SABIC was in the process of „finalizing discussions with technolgy providers and systems houses“, presumably on a large integrated complex. When asked I asked him whether that would mean getting into the production of polyols, isocyanates, or both, he wouldn´t give a precise answer. „We are working to see how it fits with existing projects in the kingdom,“ he said, emphasizing access to aromatics, and therefore hinting at SABIC production of isocyanates. He also stressed that a possible project is only in the early stages of planning. At the show, Al Mady also said that the company is still considering the construction of a polycarbonate plant in China. The company is in the final stages of negotiation with Sinopec and the plant would be an add on to its newly completed joint venture with Sinopec in Tianjin. The company is completing a polycarbonate joint venture in Saudi Arabia using licensed technology. It will use its own, former GE, technology for the Chinese plant. I dimly recall that General Electric was planning a polycarbonate plant in China with PetroChina and that SABIC nixed that plan when it purchased GE in 2007. (Funny quotation marks due to German...

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Chemical Industry Recovery Gaining Steam
Apr19

Chemical Industry Recovery Gaining Steam

While few people are getting overly excited about an economic recovery, 2010 is looking a lot better than 2009. At the height of the financial crisis, Saudi Basic Industries posted a loss of $258 million for the first quarter of 2009. SABIC blamed the economic downturn and a write down of assets. The loss was shocking because SABIC has a low-cost position making products, such as polyethylene, in Saudi Arabia and exporting them to fast-growing Asian markets. If SABIC was in trouble, what hope was there for everybody else? However, that loss has now swung to a $1.5 billion profit for the first quarter of 2010. Before the recession, SABIC’s profits peaked in the second quarter of 2008 at $2 billion. SABIC CEO Mohamed H. Al-Mady says volumes and prices for petrochemicals have seen strong improvement. “We are overcoming the impacts of the global financial crisis,” he said. A good barometer for the health of the chemical industry as a whole is DuPont. It has products ranging from agricultural chemicals to automotive coatings and generates more than 60% of its revenues outside of the U.S. Standard & Poor’s improved its outlook for the company’s investment-grade “A” credit rating from “negative”, which means that its rating is in danger of declining, to “neutral”. Ratings analyst Cynthia Werneth expects the economic recovery, cost reductions, and growth in agriculture will offset an expected $700 million decline in DuPont’s pharmaceutical licensing income. DuPont sold its pharmaceutical business to Bristol-Myers Squibb in 2001 but retained rights to the hypertension drugs Cozaar and Hyzaar, which it licensed to Merck. Patents for these drugs expire this year. A large DuPont acquisition, the report said, is unlikely. “We believe that management is committed to achieving and maintaining credit measures in line with the [credit] ratings, which would not support a large debt-financed acquisition or significant share buybacks at this time,” Werneth...

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