SABIC reduces output in Europe

OUTPUT REDUCED: Chemical giant SABIC has scaled back European production due to falling global demand. (Getty Images)

Chemical giant Saudi Basic Industries Corp has cut output at its European plants as global demand falls with the slowing economy, SABIC's chief executive said on Wednesday.
 
"We have reduced (production) in Europe," Chief Executive Mohamed al-Mady told newswire Reuters on the sidelines of a petrochemical conference in Dubai.
 
Mady declined to give details on how much SABIC had cut output or for which products. The firm produces petrochemicals, plastics, fertilisers and steel.
 
According to its website, SABIC supplies European markets with plastics, such as crystalline PET and low density polyethylene, and chemicals such as benzene and ethylene.
 
SABIC Europe's production facilities are based in Geleen in the Netherlands, Teesside in Britain and Gelsenkirchen in Germany and have a total yearly production of over 8.7 million tonnes.
 
The firm said in July that it would close a unit at the Teesside aromatics plant by end-2008 as it had become uneconomical. It plans to upgrade other units at the plant.
 
SABIC Competitor BASF, which is active mainly in Europe, said in November it would cut back production, citing a "massive" decline in demand in key industries, by temporarily shutting 80 plants worldwide and reducing production at about 100 plants.
 
SABIC posted its first quarterly decline in profits in more than two years in the third quarter and has said that it expected the slowing economy to hit fourth-quarter results.
 
SABIC continued to run plants in Saudi Arabia at full capacity, Mady said.
 
"These are good investments," he said. "They are running on indigenous feedstocks so I think their economics are good." (Reuters)

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