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Sabic completes Sadaf, Petrokemya merger to boost efficiency

October 09/2019

MOSCOW (MRC) -- Saudi Basic Industries Corp (SABIC), one of the worlds largest petrochemical producers, has announced that it has successfully merged two of its wholly owned affiliates, Saudi Petrochemical Company (Sadaf) and Arabian Petrochemical Company (Petrokemya), reported Al Arabiya.

"The merger is driven by SABICs strategy to increase efficiency and competitiveness of its operations," the company said in a statement to the Saudi Stock Exchange.

The petrochemical giant added that the latest transaction will not have immediate impact on its financial status, but is expected to improve overall cost competiveness in the long-term.

SABIC had announced its plans to merge Sadaf and Petrokemya in March to create a more efficient entity. The company said at the time that Sadafs assets, rights, liabilities, and obligations will transfer to Petrokemya.

As of the merger, Sadaf no longer exists as an independent entity.

Petrokemya, based in Jubail in eastern Saudi Arabia, produces feedstock chemicals including ethylene, propylene, butene, benzene and butadiene.

Sadaf was also located in Jubail, and included six petrochemical plants with a total production capacity of more than 4 million tons per year. SABIC acquired Sadaf from Shell for USD820 million in August, 2017.

Saudi Arabias sovereign wealth fund currently owns a 70 percent stake in SABIC. In March, Saudi Aramco announced it is buying this stake for USD69.1 billion.

The move is set to create a "stronger platform to enhance competiveness and meet the growing demand for energy and chemical products," Saudi Aramco CEO Amin Nasser said at the time.

As MRC wrote before, SABIC took off-stream its SABIC Olefins 4 cracker owing to technical issues on May 10, 2019. Further details on duration of the shutdown could not be ascertained. Located in beek, the Netherlands, the cracker has an ethylene production capacity of 690,000 mt/year and a propylene production capacity of 360,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polyprolypele (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,255,800 tonnes in the first seven months of 2019, up by 9% year on year. Shipments of all PE grades increased. At the same time, the estimated PP consumption in the Russian market was 796,120 tonnes in January-July 2019, up by 11% year on year. Shipments of PP block copolymer and homopolymer PP increased.

Saudi Basic Industries Corporation (Sabic) ranks among the world's top petrochemical companies. The company is among the world�s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, benzene, butadien, PP block copolymer, homopolymer PP, propylene, ethylene, petrochemistry, Sabic, Netherlands, Russia, Saudi Arabia.
Category:General News
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