MOSCOW (MRC) -- Saudi Basic Industries Corp. (Sabic), one of the world's largest petrochemicals groups, can adapt to any new supply of petrochemicals entering the market as a result of Iran’s release from sanctions, said Yousef Abdullah al-Benyan, Sabic’s acting chief executive, according to GV.
Because product prices are closely linked to crude prices, Saudi petrochemical companies have been negatively hit by dropping oil prices. Additionally, the drop in prices has impacted the competitive advantage Saudi producers have held over non-oil producing countries due to subsidized energy and feedstock, media reports noted. The pressure could be further amplified with the reintroduction of Iranian oil to global markets.
Speaking at a news conference, Benyan said he was unclear as to the current state of Iran’s petrochemical industry. Generally, it takes three to five years to come to market, start production and then ramp it up. "A competitive environment is always healthy and this is the way we love to play, so we have no concerns at all," Benyan stated.
As MRC reported before, Sabic has reported a 29.4% drop in fourth-quarter 2015 net profit due to lower prices for its products, particularly in its metals division. It was the sixth straight quarter of falling profits for the company, which has been hurt by the fall in oil prices since mid-2014. Sabic made a net profit of 3.08 billion riyals (USD821 million) in the three months to Dec. 31, down from 4.36 billion riyals in the year-earlier period.
Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world's market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.
MRC