SABIC’s takeover plans to impact bulk & specialty chemicals market

One of the largest petrochemical producers and economic entities of Saudi Arabia, Saudi Basic Industries Corp (SABIC), has recently announced its massive acquisition plans in the forthcoming years, with a special focus on bulk and specialty chemicals industry.Speaking about the development, SABIC’s Chief Executive Officer, Yousef Abdullah Al-Benyan was quoted stating that the firm intends to spend around USD 3 billion to USD 10 billion in acquisitions over the next five years. He further stated that the group has decided to expand its reach in bulk and specialties chemicals market through acquisitions, given the tough competition prevalent in the industry.

Reportedly, SABIC is said to have been making efforts to expand its footprint across the globe by acquiring specialty plastics producers operating in China, Europe, and Middle East. According to Benyan, the said acquisition deals are likely to materialize by the second quarter of 2018. Furthermore, the group has been searching for opportunities to augment its agri-nutrients operations in South America and Africa, given the firm’s contribution in agrochemicals production.

The specialties division of the group, which manufactures plastics for mobile phone screens, car windshields, and other verticals, is reportedly set to add USD 3 billion to USD 6 billion to the combined revenue of the group in the immediate future, said Benyan. The company reported a combined profit of USD 4.8 Billion in 2016, while the specialties division of the group currently contributes around USD 1 billion to its annual revenue before taxes, interest, and depreciation.

He further stated that the group has been contemplating on a number of acquisition opportunities in bulk and specialty chemicals industry, and aims to conclude first such deal in the last quarter of 2017.

With Saudi Arabia gearing up to diversify its economy by lowering its reliance on oil, the latest move of the group to target the lucrative bulk and specialty chemicals market would indeed prove beneficial, cite experts.