SABIC overcapacity squeezes margins, shrinks operating rates: CEO

Saudi Basic Industries Corporation’s (SABIC) CEO Abdulrahman bin Saleh Al-Fageeh said 2025 saw a moderate improvement in the macroeconomic landscape. However, excess production capacity in the petrochemicals industry continues to pressure profit margins and lower utilization rates.

 

In a statement commenting on the company’s financial results, Al-Fageeh said that despite these conditions, SABIC remained committed to delivering on its 2025 strategic priorities.

 

SABIC continued to take decisive steps to optimize its asset portfolio, announcing the signing of two agreements to sell its petrochemicals business in Europe and its engineering thermoplastics business in the Americas and Europe, Al-Fageeh said.

 

Upon completion, the transactions are expected to strengthen SABIC’s long-term strategic positioning and support its objective of maximizing shareholder value.

 

He added that SABIC also made solid progress on strategic and sustainable growth projects by taking final investment decisions on two projects.

 

An ethylene oxide catalyst plant in Saudi Arabia, which is supported by the Shareek public-private partnership program, and it aims to advance the localization and security of SABIC’s catalyst supply.

 

The other project is SABIC’s engineering thermoplastics compounding plant in China.

 

Both projects underscore the company’s disciplined capital investment approach and focus on value-added growth.

 

According to Argaam data, SABIC reported net losses of SAR 25.78 billion for 2025, compared to net profit of SAR 1.5 billion in 2024. Fourth-quarter losses reached SAR 20.94 billion.