SABIC integration into Saudi Aramco will not entail asset disposals: CEO

Saudi Basic Industries Corporation’s integration into Saudi Aramco will not entail asset disposals, as the chemicals producer is looking to expand its production volumes, according to SABIC CEO Yousef Al-Benyan.

“We have made very good progress. It’s collaborations, not necessarily integrations, but there are some assets that we need to look at how we will integrate them. We are looking at synergies that can be leveraged between both organizations, and we made some announcements around those targets,” Benyan told S&P Global Platts on the sidelines of the Gulf Petrochemicals and Chemicals Leaders Forum in Dubai June 16.

“We are looking at growth factors, at this point we don’t see any asset that we will dispose of. We have opportunities to grow, particularly domestically,” he said.

Saudi Aramco in 2020 finalized its acquisition of a 70% stake in SABIC for $69 billion. Since then, Aramco has been working to integrate SABIC into its downstream business. The two companies are focusing on selective integration synergies, including in manufacturing, information technology, project management and sales.

“Hopefully by third quarter, we will be in a much better position to look at what is our target for 2030. We are reviewing some growth opportunities,” said Benyan. “That will determine how much investment we will do, and we will make that announcement in time. This will include global investments.”

In addition to investments in Saudi Arabia, SABIC is looking to expand its footprint in the United States, Asia, and Africa, Benyan said.

Petrochemicals accounts for the bulk of SABIC’s business. It also produces metals and fertilizers and has facilities in the Americas, Europe, Asia and Africa.

In April, SABIC said it would take over the sales and marketing of about 5.4 million mt/year of Saudi Aramco’s chemicals and polymer products. The move will center SABIC’s commercial focus on petrochemical products, while Aramco’s trading arm will focus on fuel products, SABIC said April in its Q1 earnings report. As a result, SABIC said it will end up with about 900,000 mt/year of additional products for sale.

Moreover, SABIC is not embarking on any fundraising at present, Benyan said. In recent years it has gone to the bond market, selling $1 billion of bonds in September 2020, and $2 billion in October 2018.

“SABIC has a very strong balance sheet and at this point we don’t have any plan to go to the debt market, but if our growth plans are confirmed then we will go to our normal way of doing things,” Benyan said.