SABIC AN expects 54% sales boost from planned seventh plant

Fahad Albattar, CEO of SABIC Agri-Nutrients Co.

SABIC Agri-Nutrients Co. (SABIC AN) is nearing a final investment decision on its planned seventh ammonia and urea plant, which is expected to increase the company's sales volumes by about 54%, CEO Fahad Albattar said.

Speaking during a meeting with analysts and investors attended by Argaam, Albattar said the project has reached an advanced stage, with updates expected in the coming months.

The first project involves SABIC AN's seventh plant in Jubail Industrial City for the production of gray ammonia and urea, with an annual urea capacity of 2.6 million metric tons.

Albattar said the company's second major project is its sixth plant in Jubail Industrial City, which is designed to produce 1.2 million metric tons of blue ammonia annually.

The blue ammonia project is ready to proceed, he said, but remains contingent on securing a long-term offtake agreement.

Blue ammonia differs from gray ammonia because it is sold into energy markets, Albattar said, adding that the company will move forward with the project once a purchase agreement for the planned output is secured.

He said SABIC AN has been working to secure offtake agreements but has yet to reach a final deal. If an agreement is signed this year or next, the project will proceed, with further details to be announced as developments occur.

Albattar said the company continues to strengthen its position as one of the world's largest producers and exporters of nitrogen-based agri-nutrients, supported by a strong industrial base, strategic partnerships, broad geographic reach, and a diversified customer base.

He added that the company's focus on reliability, operational excellence, and cost discipline enables it to navigate market volatility while continuing to create long-term value.

On market conditions, Albattar said the global fertilizer industry continues to face uncertainty due to geopolitical developments, logistical challenges, and energy market volatility. However, long-term demand remains supported by population growth and global food security needs.

He said shipping disruptions in the Middle East and supply concerns linked to regional tensions have driven freight costs higher, supporting fertilizer prices in key markets.

Looking ahead, Albattar said market direction will largely depend on the resumption of shipping traffic in the Middle East and regional stability, which would help clear accumulated cargoes in the Gulf and support supply continuity.

Nitrogen fertilizer prices were supported in Q1 2026 by strong demand in the United States and Europe, as well as inventory-building activity in India and Africa, while regional tensions and higher freight rates also supported global prices, he added.

Discussing the impact of geopolitical developments on operations, Albattar said SABIC AN exported its first bulk urea shipment to Bangladesh through Yanbu Commercial Port in May after completing the necessary logistics preparations on Saudi Arabia's west coast.

The company loaded two vessels through Yanbu last month and is now handling four vessels from the port after stabilizing transportation operations, while continuing to expand its west coast activities.

Albattar said the company has increased the share of production transported from Jubail to the west coast to around 40% of daily output and aims to raise that figure to 70% in the future.

Although the shift has increased logistics costs, he said the current operating environment is expected to have a significant positive impact on net profit.

The company's strategy through 2040 is built around four pillars—growth, transformation, optimization, and innovation—aimed at expanding its global presence and capturing opportunities across agriculture, industry, and energy sectors.

Albattar said SABIC AN continues to implement expansion plans under its 2040 strategy, which is focused on sustainable growth and long-term shareholder value creation, supported by an operating history spanning more than 60 years since its establishment in 1965.

CFO Ayed Al Haider said first-quarter revenue totaled $770 million, down 7% from a year earlier and 10% from the fourth quarter of 2025, due to lower sales of the company's own products and a higher contribution from third-party marketed products.

Adjusted EBITDA rose 19% year-on-year and 21% quarter-on-quarter to $370 million in the first quarter, supported by higher average prices for most products.

Operating cash flow reached $183 million during the quarter, while cash and cash-equivalent investments stood at $3.1 billion at the end of the period. The company had no outstanding debt.

Al Haider said product prices rose sharply toward the end of the first quarter and remained elevated during the second quarter, supported by supply shortages and geopolitical developments in the region.

He added that annual capital expenditure allocated to operations and maintenance is expected to remain broadly in line with previous years at around $200 million, excluding strategic expansion projects that remain under review and evaluation.