Saudi Arabia’s largest petrochemical company is taking a one-way ticket to North America. After agreeing on a set of joint projects with Exxon Mobile back in 2019, Sabic is finally ready to begin its activities in the Gulf Coast of the US. These include setting up an ethylene production unit that will feed two polyethylene units and a monoethylene glycol unit. Don’t know what we’re talking about? Don’t worry — the important thing to remember is that Sabic’s new production plant in the US will have an estimated annual capacity of 1.8 million tonnes. The size of this project highlights Sabic’s intention of significantly strengthening its petrochemical manufacturing presence in North America while also diversifying its feedstock sources.
Sabic’s imminent expansion in the States is backed by solid Q2 results, which saw the company’s profits jump to $2b from a SAR 2.22b loss the year prior. In addition, the company’s revenue rose 72% compared to the same period 12 months ago. To top it all off, last April, Sabic issued a SAR 4.5b dividend for the second half of 2020 (some investors are probably still celebrating in downtown Riyadh).
why it matters
Guess who owns a 70% stake in Sabic? Saudi Aramco, of course. Saudi Aramco is pursuing an aggressive expansionist strategy in the chemical business. Sabic's projects in the US further highlight the significance that the chemical business plays for Saudi Arabia's energy transition.