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SABIC
December 4, 2012
INITIATION OF COVERAGE EQUITY RESEARCH
1 Yansab, another Sabic landmark project, with an annual production capacity of 4 million
tons (March 1 2010). Key products are polyethylene (800 thousand tons), ethylene glycol (700
thousand tons) and polypropylene (400 thousand tons). Investment cost for this project was
$5.6 billion.
Sales volumes have amounted to 54 million tons for 2011, versus 37 million tons for 2005. This
growth translates into a CAGR of 6.7% and 6.8%, in production and sales volumes respectively,
for the period 2005-11. Looking beyond, with the diverse expansions going online, Sabic should
witness an estimated CAGR of 4.1% and 3.1% in production and sales volumes, respectively, for the
period 2011-2015.
A large part of the company’s production takes place in Saudi Arabia, with European operations
contributing c20% to the total polymers output and c11% to total chemicals output. On a further
note, European-produced basic chemicals account for 7% of Sabic’s total selling volumes, where as
European-produced polymers account for 4% of Sabic’s total selling volumes.
Chart 12: Production and Sales Volumes (million mt)
Source: Company Reports
Expansions coming onstream in the near-term include:
1 Phase VIII of Gas is expected to begin production by year-end 2012. The expansion has a
production capacity of 1.2 million tons of oxygen gas and 1 million tons of nitrogen gas.
1 Hadeed new steel plant, with an annual production capacity of 1 million tons of steel billets and
500 thousand of long steel products, is expected to be completed in September 2013. Once
operational, Hadeed’s annual production capacity will rise to over 6 million tons, whereby
long products will represent 4 million tons or a 67% share. According to Sabic, ‘the new plant
will make Hadeed self-sufficient in feedstock, intermediate and finished products” and will
therefore protect it to some extent from the fluctuations in the international steel market. The
plant’s estimated investment cost is $630 million.
1 A $400 million plant, for the production of purified terephthalic acid (PTA), is scheduled to
begin production in early 2013. The plant, owned by Ibn Rushd, will have an annual production
capacity of 350 thousand tons of PTA which will be used as feedstock for the production of
polyethylene terepthalate (PET).
1 A polyacetal production plant, in partnership with Celanese Corp., is expected to go onstream
in 2013. The Jubail-based plant, with an annual production capacity of 50 thousand tons, will
use in-house methanol as feedstock for the production of polyacetal. The plant is part of the
National Methanol Co. (Ibn Sina) complex, which is 50% owned by Sabic and the remainder
equally owned by Celanese Corp. and an affiliate of Duke Energy Corp. Total investment cost
for this project is estimated at $400 million.
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