Saudi Basic Industries Corp, the world's biggest bulk chemicals firm by market value, expects further profit growth in 2010, driven by demand for petrochemicals from China, its chief executive said on Wednesday.
SABIC, which reported forecast beating fourth quarter net profit on Tuesday, also expects demand from European and US markets to improve this year.
At a post results conference at the company's headquarters in Riyadh, Mohamed Al Mady, the chief executive, said: "Asian markets, especially China, are leading demand growth."
Mady added: "We view 2010 positively ... on an improvement in both prices and increased output capacities."He did not give a profit forecast for 2010.
Bakheet Investment Group said the company could end up making at least 20 billion riyals in net profit for 2010, 116 percent above its 2009 level.
SABIC's shares rose as much as 2.8 percent on Wednesday after its fourth quarter profit rose to its highest levels in five quarters.
The results marked a recovery from 2008, when the global economic downturn dented the chemical maker's margins, forcing it to shut some plants and cut costs.
SABIC, which makes petrochemicals, rebar steel and specialised plastics for the automotive and aircraft industries, also said it will start operations at new plants owned by affiliates in Saudi Arabia and China from the first half of 2010.
Mady said SABIC's affiliates, Yanbu National Petrochemicals Co (Yansab), Sharq and its joint venture with China's Sinopec in Tianjin would start "at normal production rates" in the first half of 2010, without giving precise details.
SABIC owns a 51 percent stake in Yansab and 50 percent in Sharq. A consortium of Japanese firms led by Mitsubishi Corporation holds the remaining 50 percent in Sharq.
Mady said SABIC could forge more partnerships in China - especially with Sinopec - in addition to the Tianjin joint-venture, which will add 3.2 million tonnes per annum.
He said: "China is the world's biggest petrochemical market and is growing. We want to invest in more than one project in China."
He added that SABIC is particularly interested in tapping the Chinese automotive, aircraft and construction sectors, he said adding that the company was in talks with Sinopec to set up plants for the automotive industry, and polycarbon plants.
SABIC also plans to start Saudi Kayan Petrochemical Co in the second half of this year - in which SABIC directly holds a 35 percent stake, he added. (Reuters)For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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