Sabic says natural gas shortage hampers growth in the local market

Chief executive of  Saudi Basic Industries Corp. (SABIC), the Middle East’s largest company by market capitalization, said that a shortage of natural gas and competition among different sectors for it make growth in the local market ‘’very hard.’’

CEO Mohamed al-Mady was speaking to reporters after SABIC posted a 1.8 percent drop in profit in the first quarter from a year ago as lower product prices offset higher production and sales volume.

He expected that growth in 2014 won’t be different from 2013  because of slower growth in the international  economy.

‘’Despite the global difficulties, we will be looking for opportunities,’’ he said. ‘’We are discussing with potential partners in the U.S. for investment in shale gas.’’

He added that despite the challenges, SABIC had several under-construction projects, including a synthetic rubber plant at its KEMYA joint venture that would come on line in 2 to 3 years.

Chief Financial Officer Mutlaq al-Morished said that sales in the 1st quarter were SAR 49.5 billion compared with SAR 46.8 billion a year ago. He added that there were no plans for sukuk issues, but the company will conduct them when needed.

A SABIC official said early last year that the company intended to issue sukuk late 2013 or in 2014 to fund upcoming projects.