SAUDI PETCHEM GIANTS CONTINUE TO INVEST AND INNOVATE FOR GROWTH

Saudi Arabian Basic Industries (SABIC) is looking to streamline its operations and create a more efficient structure by merging two units.

The company said it had secured the relevant regulatory approvals to merge its wholly owned affiliate Saudi Petrochemical Company (SADAF) with all the assets, rights, liabilities and obligations in its other wholly owned affiliate Arabian Petrochemical Company (PETROKEMYA).

“The merger is driven by SABIC's strategy to increase efficiency and competitiveness of its operations,” the company said. “The transaction is not expected to have immediate material impact on SABIC’s financial position but will improve cost competitiveness in the long term.”

SABIC has stepped up its innovation drive and introduced a number of products over the past few months. The company has been collaborating with partners to build up a large bank of knowledge on foaming technologies, to launch a dedicated polyolefin elastomer foam solution for footwear – both sports shoes and casual.

Footwear, and especially sports shoes and casual shoes, is a growing global business. New concepts and differentiated designs are of huge importance to brand owners in a saturated market.

“DF stands for ‘Dedicated Footwear’ and this is where SABIC is unique in the industry, being the first to provide a unique, tailored foamed solution for the mid sole and insole market,” said Frank de Vries, SABIC global foam and lightweight leader. “SABIC is focusing on footwear, we have in-depth know how on diverse foaming technologies and the right solutions. We are keen to speak with leading brand owners and their value chain partners such as sole producers on how to move forward and work on new innovation developments together,” de Vries continued.

SABIC also opened a new Technology and Innovation Center in October dedicated to the caps and closures segment in Geleen, the Netherlands. Located in SABIC’s Global Technology Center for Europe on the Chemelot Campus, the investment is proof of SABIC’s commitment to the industry to develop new materials and technologies focused on caps and closures.

“SABIC is pursuing cutting-edge technologies related to both new material development and to application testing,” the company said. “Polymers developed specifically for applications in this sector help enable, for example, lighter caps, and pumps and dispensing systems that are more efficient and easier to manufacture, all the while supporting customer efforts to improve overall sustainability.

SABIC also unveiled the Xenox HTX resin product, a polyester-based, high-heat technology that can enable the production of light, impact resistant and high performing structural automotive applications, in October. The product offers significant weight savings compared to steel and aluminum.

National Industrialization Co (Tasnee) expects global petrochemical prices to rise in 2020 after easing this year amid a trade war between the United States and China, its chief executive told Reuters.

The company, which has interests in petrochemicals, metals and chemicals, is one of the world’s largest producers of titanium dioxide, which is used in products such as paints, industrial coatings and plastic.

“This year is not going to be an easy year. Petrochemical prices have been depressed, all commodities prices in general are down,” Mutlaq al-Morished, chief executive of Tasnee, said in an interview.

“I think in 2020 we should see improvement, assuming there will be some sort of agreement between the Americans and the Chinese. But even if there is trade war, we have seen the shock already and markets have already discounted it.”

Indeed, Saudi companies are positioning themselves for growth as the global slowdown may be temporary and long-term demand for many emerging economies remains intact.

In September, Saudi Aramco signed a memorandum of understanding with China’s Zhejiang Free Trade Zone to facilitate Aramco’s planned acquisition of a 9% stake in the Zhejiang integrated refinery and petrochemical complex. It will also include a long-term crude oil supply agreement and the ability to utilise Zhejiang Petrochemical’s large crude oil storage facility to serve its customers in Asia.

“The agreement solidifies Saudi Aramco’s participation in the 400,000 barrels per day refinery from Phase III of the Zhoushan Petrochemical Greenfield project, and also allows the parties to evaluate potential opportunities for investment in other parts of the value chain,” the company said. “These may include refining and petrochemical production, storage and trade of crude oil and natural gas, retail, as well as distribution of oil products within the Zhejiang Free Trade Zone.”