Results of the feasibility studies by affiliates of Saudi Basic Industries Corp were not encouraging
Two affiliates of Saudi Basic Industries Corp (SABIC) cancelled a plan to
build a steel plant in Jubail Industrial City after feasibility studies were
One of the affiliates, Saudi Arabian Fertilizers Co (Safco), said instead it
will study the potential for a 1 million tonne urea factory in Jubail with the
aim of starting production by the second half of 2013.
Sacfo, which is 42.9 percent owned by chemical maker SABIC, and SABIC's
steel unit Hadeed agreed in 2008 to build the Jubail steel plant with an annual
capacity of 1.7 million metric tonnes.
"Safco announces that it has been decided not to proceed with the
implementation of this agreement since the results of the final studies were
not encouraging," the firm said in a statement to the bourse on Monday.
"Alternatively, Safco will carry out feasibility studies for the
construction of a new plant (Safco 5) in its complex in Jubail, for the production
of urea with an annual capacity of 1 million tonnes," it said.
Safco said on Sunday its net profit nearly tripled in the fourth quarter
buoyed by higher prices.
Shares in Safco closed at 170.8 riyals on Sunday while shares in SABIC, which
is expected to post its fourth-quarter profit this week closed at 110.8 riyals.
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