Chemanol product prices hit low levels, further declines unlikely: Exec

Sabri Al-Ghamdi, Managing Director of Methanol Chemicals Co. (Chemanol)

Sabri Al-Ghamdi, Managing Director of Methanol Chemicals Co. (Chemanol), said that product prices have reached low levels, with further declines unlikely, expecting prices to stabilize and inch higher this month.

He told Argaam  that demand for petrochemical products is expected to see improvement. This is due to the high cost of energy prices for producers in Europe, which led to weak production.

Easing of the COVID-related restrictions in China will likely lead to improved production and demand in the industrial sectors, the top executive added.

He pointed out that the positive indicators in the budgets of the Gulf countries, especially in the Kingdom, target increased spending, further expanded development plans and stabile raw materials prices.

As for the developments in the specialty chemicals project, primarily, Chemanol’s ambition, as part of its growth strategy, is to become one of the most competitive producers of methanol and its derivatives in the region.

Secondly, it seeks to develop and produce specialty chem products with high margins and value in order to diversify its business and raise its financial position, Al-Ghamdi explained.

This will be achieved through current development projects for a new group of specialty chemicals, including methyl diethanolamine (MDEA). This will not only enhance Chemanol's offerings in the specialty chemicals market but will also help develop the Kingdom’s manufacturing industries, transfer specialized technology and meet requirements of the local, regional and global markets, he added.

Such projects provide added value and expand the chemical producer’s product range. Furthermore, they will contribute to boosting localization and strengthening the gross domestic product (GDP) and chemical commodities in the Kingdom, he added.

The top executive also indicated that the board's recommendation to repurchase some shares came based on its confidence in Chemanol's current and future performance. This is will reflect fairly on the stock price and achieve rewarding returns for shareholders.

Chemanol’s board of directors recommended, on Nov. 17, repurchasing up to 5%, or 3.37 million ordinary shares maximum, as treasury shares to the extraordinary general meeting (EGM), according to Argaam's data.