By Souhail Karam
UPDATE 1:Saudi Basic Industries Corp bans promotions and bonuses for staff - CEO
Saudi Basic Industries Corp (SABIC) will freeze promotions and bonuses for more than half its employees this year to maximise its cash flow as the global crisis bites, its chief executive said on Wednesday.
Staff working for SABIC Innovative Plastics (SAIP) and at SABIC Europe will not be affected because they have already been subject to a similar move, Mohamed Al Mady said.
However, about 17,000 employees out of 30,000 working in the Kingdom and internationally will be affected by the cost-saving decision.
SABIC Innovative Plastics is the name SABIC gave to General Electric's plastics unit which it bought last year for $11.6bn.
"SABIC looks at all costs and aims to keep a maximum amount of cash flow. But the internal conditions are excellent, our rating is good," Al Mady said.
He declined to say how much money would be saved through this decision citing the sensitivity of the information.
SABIC reported last month a near-96 percent fall in fourth-quarter profit due mainly to sagging global demand.
"The decision involves SABIC employees in the kingdom and in our international branches to the exception of SAIP and SABIC Europe," Al Mady added.
State-controlled SABIC implements promotions and bonuses every April.
A slowdown in inflation in the kingdom has encouraged the company to implement the move. "There is a global deflation, things have improved," he said.
The firm has already announced layoffs at SAIP totalling 1,300, including 300 from its European plants. (Reuters)