Saudi's SABIC hit by Dutch union dispute

Petrochemical giant forced to cut production at its Netherlands plant after union action
Saudi's SABIC hit by Dutch union dispute
SABIC CEO, Mohamed Al Mady (Getty Images)
By Andy Sambidge
Sat 02 Feb 2013 11:32 AM

Saudi Basic Industries Corp (SABIC), the world's biggest petrochemicals group by market value, said on Saturday that production at its Netherlands plant had been cut due to union action.

The company said output at its SABIC Europe Chemicals Geleen plant in the Netherlands decreased with effect from Thursday "due to the a proactive measure taken by the union workforce as a consequence of no finalised agreement regarding work conditions".

In a statement to the Saudi bourse, SABIC said it was keen to protect its investments, and was "considering all other options available".

"It is not possible to determine the financial effect or the effect on production capacity, at this time, because the affected plants are not yet known," the statement said.

SABIC Europe Petrochemicals is a subsidiary of SABIC, focusing on polyolefins, with its head office located in Sittard, Netherlands.

SABIC Europe owns a network of sales offices, a logistic supply hub and three petrochemical production sites in Europe including Geleen Netherlands, Teesside in the United Kingdom and Gelsenkirchen, Germany.

Earlier this month, SABIC posted an 11.3 percent rise in fourth quarter net profits but missed analyst forecasts.

The chemicals, metals and fertilisers conglomerate earned net income of SR5.83bn ($1.55bn) in the three months ending December 31, compared to its profit of SR5.24bn a year ago.

Its full-year performance, with net income of SR24.7bn, represented a fall of 15.5 percent from 2011, when the company enjoyed successive quarters of record performance.

The fourth-quarter results marked a 7.6 percent fall from its third quarter net earnings.

SABIC, 70 percent state-owned, cited a "higher cost of sales and lower sales prices for certain products, despite higher sales and production volumes and reduction in financial charges" for its fall in 2012 net income.

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