Feedstock costs ‘not sole driver’ for Saudi petchems’ profitability, says Al-Benyan

Feedstock costs are not the sole driver for the Saudi petrochemical producers’ profitability, Yousef Al-Benyan, chief executive of Saudi Basic Industries Corp. (SABIC), told CNBC Arabia on Tuesday.

There are other major factors that affect profitability, such as costs of investment in plants, markets, products, shipping, research and development, competitors, etc., he said

Though feedstock plays a vital role in projects’ economics of scale, companies’ ability to build new factories at an economic cost, the use of appropriate technology and the ability to market their products are more important.

Al-Benyan added that it was because SABIC was able to meet these requirements that it was able to compete in China and the US though costs are higher when compared to the local market.

The majority of SABIC’s products are exported: 30 percent to Asia and the Middle East each, 29 percent to Europe and 9 percent to the North and Latin America.

SABIC, which operates in more than 50 countries worldwide, is mulling investments locally and overseas, Al-Benyan added.