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After the completion of a 70% stake acquisition in Saudi Basic Industries Corporation (SABIC), Saudi Aramco has been working tirelessly to integrate SABIC into its downstream business, without entailing asset disposals. The $69 billion deal is a strategy to grow Aramco’s integrated refining and petrochemicals capacity and create value from integration across the hydrocarbon chain. SABIC and Aramco’s collaboration should also enhance chemicals strategy by integrating upstream production with SABIC feedstock; expanding capabilities in procurement, supply chain, manufacturing, marketing and sales; complementing geographic presence, projects and partners; and increasing the resilience of cash flow generation with synergistic opportunities.
“We have made very good progress. It’s collaborations, not necessarily integrations, but there are some assets that we need to look at how we will integrate them. We are looking at synergies that can be leveraged between both organisations, and we made some announcements around those targets,” SABIC CEO, Yousef Al-Benyan told S&P Global Platts on the sidelines of the Gulf Petrochemicals and Chemicals Leaders Forum in Dubai June 16.
“We are looking at growth factors, at this point we don’t see any asset that we will dispose of. We have opportunities to grow, particularly domestically,” he said. He also added that In addition to investments in Saudi Arabia, SABIC is looking to expand its footprint in the United States, Asia, and Africa.
While the chemical manufacturing company hopes to expand its business to other regions, there are no plans for fundraising at the moment. “Hopefully by third quarter, we will be in a much better position to look at what is our target for 2030. We are reviewing some growth opportunities,” said Benyan. “That will determine how much investment we will do, and we will make that announcement in time. This will include global investments.”
“SABIC has a very strong balance sheet and at this point, we don’t have any plan to go to the debt market, but if our growth plans are confirmed then we will go to our normal way of doing things,” Benyan concluded.
