Saudi Basic Industries Corporation (SABIC) is set to launch eight mega projects with an expected investment of $2.7 billion to optimize the primary energy and feedstock utilization, the company said in its recently released 2021 annual report.
“We have prioritized 90 projects in total that hold the greatest potential for improving natural resources use,” the report added.
SABIC, which is listed on the Saudi Exchange (Tadawul), will capitalize on opportunities through innovative and sustainable solutions, focusing on petrochemical products in 2022.
The firm’s United EO/EG-III project in Jubail Industrial City, which will produce 700,000 metric tons of glycols, is expected to commence operations this year.
SABIC’s joint venture with US-based ExxonMobil in southeast Texas, Gulf Coast Growth Ventures, is also likely to begin commercial operation in 2022. The project includes an ethylene production unit with an annual capacity of 1.8 million tons, which will feed two polyethylene units with an annual capacity of about 1.3 million tons, and a monoethylene glycol unit with annual capacity of about 1.1 million tons.
SABIC’s current expansion plans will help meet a diverse set of customer needs and will enable it to stay competitive, Vijay Valecha, Chief Investment Officer, Century Financial, told TRENDS.
Eight plus years in the making: We’ve officially cut the ribbon on our Gulf Coast Growth Ventures manufacturing site and are thrilled to call San Patricio County home!#GCGVstartup#ChemistryThatMatters pic.twitter.com/wwx5Xp3ayn
— SABIC Americas (@SABIC_Americas) March 24, 2022
“The Exxon-Mobil joint venture is a part of its effort to be a world leader in petrochemicals. The new projects with Exxon will increase backward integration and thus save costs,” he said, noting a case in point is the Ethylene plant, whose products will be a raw material for the polyethylene plant.
The focus on petrochemicals will increase operational efficiency, synergies and improve profit margins, Valecha noted.
The volume from new projects will raise the company’s market share in geographies such as Africa, South East Asia and Latin America, he said.
According to the report, SABIC recently completed its GAS 9 expansion project, which will increase oxygen production capacity by 3,600 tonnes per day (TPD) and nitrogen by 3,500 TPD for safe operations of related industries in Jubail Industrial City.
In addition, Metals (Hadeed), a fully owned steel manufacturing affiliate, is exploring establishing a plant in Jubail to produce thin steel sheets within its current product portfolio.
Hadeed aims to enhance its position as a manufacturer of steel plates as per the requirements of the local market through this project.
Valecha said that Hadeed’s expansion of thin steel sheets is to meet the local requirements of Saudi Arabia and is a part of Saudi national objective to ensure self-sufficiency.
In addition, the move will save precious foreign exchange that will otherwise be spent on imports and simultaneously increase local employment opportunities, he noted.
Despite COVID-19 challenges, SABIC’s is moving ahead with its vision of becoming a world leader in agro-nutrients and chemicals, Valecha stated.
In February, SABIC reported a net profit after zakat and tax of SAR 4.93 billion in the fourth quarter of 2021, compared to SAR 2.25 billion in the fourth quarter of 2020.
