A Saudi petrochemical company has inked an investment deal poised to enhance its annual production to 290,000 tons, a strategic move aimed at expanding its export capacity to satisfy its customers globally.
An energy-focused platform based in Washington released a statement that Sahara Global Petrochemicals (SABIC) has awarded the engineering, procurement, and construction contracts for expanding the ethylene vinyl acetate plant of Global Polymer Company, a subsidiary of SABIC.
As a result of the new deal, the production capacity of high-grade petrochemicals is expected to surge by 70,000 tons, bringing the total capacity after expansion to approximately 290,000 tons per year.
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The Kingdom of Saudi Arabia heavily relies on the petrochemical sector as part of its national industrial strategy, targeting investment opportunities worth 1 trillion riyals (about $266.60 billion), to achieve ambitious economic returns for the Kingdom by 2030.
Details of the Deal
SABIC informed the Saudi Stock Exchange “Tadawul” on Tuesday, July 2, 2024, that the contract duration is 40 months with a total value of $187 million (701.55 million Saudi riyals).
Contracts were signed with companies “SGC E&C Co. Ltd” and “SGC ARABIA COMPANY LIMITED”, and the financial impact of the deal is anticipated to become apparent upon the project’s completion in the fourth quarter of 2027.
In line with SABIC’s efforts to manufacture value-added products, high-grade ethylene vinyl acetate is used in various industries including the production of solar cell containers, thermally soluble adhesives, and other applications.
SABIC’s Share Performance
Shares of SABIC turned green during Tuesday’s trading on the Saudi Stock Exchange, bolstered by the signing of the plant expansion contract.
The share price of SABIC in the Saudi market rose by 1.04% to 29.10 Saudi riyals ($7.76) by 09:45 AM GMT (12:45 PM Mecca time), which is a 0.30 riyal increase from the previous closing price.
During the day’s trading, SABIC’s shares reached a trading value of nearly 17.5 million riyals ($4.66 million), through transactions involving more than 600,000 shares across 1619 deals.
* 1 US dollar equals 3.75 Saudi riyals.
About SABIC
Established in late 1999, SABIC was founded as a closed joint-stock Saudi company with the aim to become a leading producer of petrochemicals that supplies the global market with high-quality basic and intermediate petrochemical products.
With founders comprising prominent private sector investors (individuals and companies) from the Kingdom and the Gulf Cooperation Council, SABIC plays a significant role in utilizing Saudi Arabia’s vast natural resources of oil and hydrocarbons to benefit the national economy and the interests of its stakeholders, including shareholders, clients, employees, and the community at large.
The national industrial strategy of Saudi Arabia intends to bring additional investments in the petrochemical sector to 1.3 trillion riyals (roughly $350 billion), multiply the exports of advanced technological products by six, and create tens of thousands of high-value, quality jobs.
