RIYADH: The increased profits in the fourth quarter results of the Saudi Basic Industries Corp. (SABIC) has given clear signals for its continued prosperity during the current year, Mohamed Al-Mady, chief executive of SABIC who is hopeful for year 2010, told newsmen here on Wednesday.

“The high oil prices, economic growth, improved production and enhanced sales, contributed to increased profits,” Al-Mady said, adding that there was a significant improvement in the plastic engineering products especially in the automotive industry, electronics and construction. SABIC net income was SR9.1 billion with a 26 percent increase of its fourth quarter results compared to the third quarter.

“We are in good shape,” Al-Mady said. He pointed out that the company is on a solid foundation with strong financial position.

“We are in a country where raw materials such as crude oil and natural gas are comparatively cheap.” He noted that the company is to embark on new projects such as expansion of the Sharq refinery, the new Yansab refinery, and a petrochemical complex in China. “Asian markets, especially China, are leading demand growth,” He said that his company had business cooperation with the Chinese company Sinopec.

“Before entering into an agreement with Sinopec, he said that the two giants in the petrochemical industry had built up a healthy business relations through the marketing of products.

Sinopec and SABIC set up a joint venture in Tianjin in November 2009, for building and operating a new petrochemical plant designed to annually produce 3.2 million metric tons of various chemical products, including one million metric tons of ethylene. The plant’s entire cost reaches to $2.7 billion. They each have a 50 percent stake in the joint venture. The financing agreement inked includes a $1.8 billion long-term loan agreement and $88 million short-term circulating fund.

“Saudi Arabia is the first petrochemical partner with China and the relationship was further enhanced with the recent agreement which would which would play a major role in petrochemical industry. We look forward to continued cooperation with Chinese companies, especially with Sinopec in new areas.”

He said the Chinese market is the largest petrochemical market which generates a demand for related products.

“With regard to the auto industry there is growth in China, there is demand for polypropylene.”

He confirmed that dumping cases had no impact on the company and lawyers following the case, hope that the issues will be settled in favor of SABIC. We are waiting for the outcome.”

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