Saudi International Petrochemical Co. (Sipchem) is planning its first overseas investment in the US shale industry through a joint venture with an American firm, Bloomberg reported on Tuesday, citing Chief Executive Officer Ahmad Al Ohali.
“It’s not going to be easy because we don’t know the business landscape in the US, but definitely we are targeting hopefully to do something this year,” Al Ohali told Bloomberg.
The expansion drive plan comes due to the "very limited” growth prospects in the Kingdom as there is shortage of feedstock for basic products, he said, adding the increase in feedstock prices two years ago was “a wakeup call for our industry".
The company, which produces methanol and its derivatives, would initially use cash to pay for the project instead of borrowing money, the CEO said.
In an interview with Argaam, Al Ohali said that he was optimistic that petrochemical prices would recover in Q1 2018. He also said performance of the company’s plants is expected to see improvements.
On Monday, Sipchem reported a net profit of SAR 437.4 million for Fiscal Year 2017, rising nine-fold year-on-year from SAR 43.1 million, driven by higher prices and volumes.
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