SABIC plans to grow new acquisition on Teesside

SABIC UK Petrochemicals has recently completed its first six months of operation under its new ownership of the Saudi Basic Industries Corporation (SABIC for short), following its $685 million acquisition from Huntsman.

SABIC UK Petrochemicals has recently completed its first six months of operation under its new ownership of the Saudi Basic Industries Corporation (SABIC for short), following its $685 million acquisition from Huntsman.

As a result of that deal, which was completed on December 29, 2006, SABIC UK Petrochemicals has become, at a stroke, part of one of the largest chemical companies in the world.

Commenting on the acquisition, Mr Mohamed Al-Mady, vice chairman and CEO of SABIC, said: “The acquisition of Huntsman’s UK/European business is a major addition to the SABIC Europe group of companies and to SABIC’s business overall. This deal demonstrates our commitment to growing the SABIC business and the success of our globalization strategy.”

He continued: “We have achieved substantial growth in Europe in recent years, following the successful integration of DSM’s petrochemical business in 2002. The businesses we are acquiring at Wilton and North Tees add additional talented employees and offer further high quality production platforms to achieve our next stage of growth, and will add to our other sites in Europe in Geleen, Holland and Gelsenkirchen, Germany.”

SABIC, headquartered in Riyadh in the Kingdom of Saudi Arabia, is the largest public company in the Middle East, and aims to become one of the top three petrochemicals companies in the world by the year 2020.

Founded only in 1976, it is already one of the top ten chemical companies in the world and has rapidly built up a market capitalisation of around $70 billion. The Saudi Arabian Government owns 70% of SABIC shares with the remaining 30% held by private investors in Saudi Arabia and other Gulf Cooperation Council countries.

SABIC’s UK operations on Teesside are an integral part of SABIC Europe, which is headquartered at Sittard in The Netherlands.

SABIC UK Petrochemicals operates a substantial petrochemicals operation here in the North-east of the UK. In addition, SABIC is also in the process of completing the construction of a new world-scale £200 million Low Density Polyethylene (LDPE) facility at the Wilton International Site.

The SABIC UK Petrochemicals business has major manufacturing assets at both the Wilton International and North Tees chemical complexes, directly employing a total of around 850 employees.

The petrochemicals plants operated by SABIC on Teesside manufacture a wide range of base chemicals that provide the key raw materials which ultimately end up in a vast range of everyday end products, which are essential for today's modern lifestyles.

In total, SABIC produces over three million tonnes of petrochemicals a year from its highly-integrated and well-established manufacturing plants based on Teesside.

In brief, SABIC’s Teesside production facilities comprise:

AnOlefins complex, manufacturing hundreds of thousands of tonnes of ethylene, propylene, butadiene and other gasoline by-products on the world-scale Olefins 'Cracker' plant at the Wilton International Site. From there, products and feedstocks are stored and distributed via ship and cross-country pipelines.

An Aromatics complex, which manufactures large quantities of benzene, ethyl benzene, Xylenes and Cyclohexane at the North Tees Site and Paraxylene at Wilton International.

SABIC also operates brine wells and ethylene liquefaction facilities at North Tees and stores feedstocks and products for distribution by road and ship.

These manufacturing operations are highly integrated and closely linked in terms of both feedstocks and finished products.

The products SABIC UK Petrochemicals manufactures provide the basic building blocks for numerous consumer goods for everyday use, such as car components, household goods and furnishings.

The products also go into the manufacture of clothing items such as polyester garments, drinks and food packaging, pharmaceuticals and industrial and engineering applications such as PVC and plastics materials for use in construction - the list is almost endless!

As mentioned earlier, in addition to the above activities, SABIC is currently continuing with the construction of a new 400,000+ tonnes a year Low Density Polyethylene (LDPE) facility at Wilton.

When completed in the first half of 2008, the LDPE plant will be the largest of its type in the world. Polyethylene is one of the most versatile of all plastics, with a very wide variety of end uses ranging from plastic ‘carrier bags’, shrink wrap for plastic drinks bottles, food packaging, drinks containers and covers for agricultural silage.

SABIC sees its acquisition of the UK petrochemicals business as an important step forward in its major global growth plans, and is currently evaluating the feasibility of expanding further its asset base on Teesside.

Paul Booth, who has been appointed President of the SABIC UK Petrochemicals operation, commented: “After a long period of re-structuring and downsizing, the chemical industry in the UK – and particularly Teesside – is on a significant growth curve.

“The prospect of new investment is very exciting indeed and I and my committed workforce here on Teesside will be working very hard over the coming months to try and persuade SABIC to invest further in this business.

“We will be talking to local, regional and national economic development agencies over the coming weeks and months to seek their support for the growth plans that we are developing.”

SHAKE ON IT! Mohamed Al-Mady (left), vice chairman and CEO of SABIC, shakes hands on the deal to acquire Huntsman’s UK petrochemicals business with Peter Huntsman, President and CEO of Huntsman.

DELEGATION VISIT: Mohamed Al-Mady (front left), vice chairman and CEO of SABIC, with members of a SABIC board delegation are pictured in front of the Polyethylene Project construction Site at Wilton, which SABIC acquired from Huntsman recently.

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