Both Saudi International Petrochemical Co. (Sipchem) and Sahara Petrochemical Co are currently in the process of reviewing the legal, financial and a host of other processes before the planned merger of the two is formalized, Saleh Bahamdan, CEO, Sahara Petrochemicals Company told Argaam.
“Once we review the documentation, we’ll submit the proposal to the CMA for its approval,” Bahamdan said.
Here’s the full interview:
Q: Has the company offset sales of Al-Waha polypropylene plant which was impacted by a technical fault? How much polypropylene inventory does the company have?
A: At Sahara Petrochemicals Company, we always believed in taking right measures at the right time so as to maximize the potential opportunities. The shutdown of our subsidiary, Waha Petrochemicals, was one of those moments when we acted swiftly.
We take pride in our promptness to fix the issue and prevented it from getting worse that could have caused a bigger damage.
Having said that, we hope to resume the operations at the plant by the first week of December, 2018. As announced earlier, due to this shutdown we lost sales of polypropelene worth SAR 42 million.
However, the market price of polypropelene is currently bearish as in Q4 this year, which we hope, will rise by Q1 2019. This rise in prices is hopefully going to even out our loss in the sales.
Q: What are the latest updates about the planned merger with Sipchem? What about the new entity’s future expansions on the level of products or new markets?
A: A merger of this scale requires a lot of documentation and approval process in order to ensure a better and a stronger entity, and charts a better growth path.
Currently, we are reviewing the legal, financial and a host of other processes before the merger is formalized. Once we review the documentation, we’ll submit the proposal to the CMA for its approval.
As we forecast in our MoU earlier, we expect the entire process to reach conclusion by February 2019, and we’re working hard to meet that deadline.
Q: What will be the future expansion strategy of the merged entity?
A: One of the areas of synergy that Sahara and Sipchem have is in the belief that ‘a company that doesn’t grow, doesn’t sustain’. Once we merge, we’ll review each other’s strengths and plans.
We’re sure we’ll achieve the growth as we had envisaged. Both of us believe that it’s a merger of equals – meaning both the companies will treat each other on an equal basis.
Write to Sunil Kumar Singh at sunil.kumar@argaamplus.com
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