Sabic: No major changes coming

By Frank Esposito
Senior Staff Reporter

Published: September 10, 2007 6:00 am ET

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Anyone expecting big changes at the former GE Plastics business might be disappointed.

``Things are not going to change from the day-to-day standpoint of our business,'' said Brian Gladden, president and chief executive officer of newly named Sabic Innovative Plastics.

Saudi Basic Industries Corp. (Sabic) completed its $11.6 billion purchase of the unit - a global leader in polycarbonate, ABS and other engineering resins - Aug. 31. In the short-term, the new operation will have to add ``less than 100'' jobs worldwide in areas such as human resources and financing.

``It's nothing dramatic,'' Gladden said of the new hires. ``But we needed to replace services that had been offered by GE.''

In an Aug. 31 phone interview, Gladden stressed that Sabic Innovative Plastics is committed to maintaining its headquarters operation in Pittsfield, Mass., where the business has been based since 1931. GE's overall manufacturing history in Pittsfield dates back to 1903.

Gladden, an 18-year GE veteran who's been with the plastics unit since 2000, added that Sabic Innovative Plastics will continue the market-focused approach used by GE Plastics.

``Our account reps will carry the whole bag of our products to the market,'' he said.

Globally, Sabic Innovative Plastics will operate as a separate business from Saudi Kayan, a Sabic joint venture that will bring on almost 600 million pounds of new PC capacity in Saudi Arabia in late 2009.

However, Sabic Innovative Plastics and Saudi Kayan are working to bring the two businesses together in some way, Gladden said.

``Our intent is to gain access to [Saudi Kayan PC] material and sell it through our business,'' he said. Selling Sabic-made commodity resins such as polyethylene and polypropylene through Sabic Innovative Plastics ``is still a possibility.''

Sabic Innovative Plastics' 2007 sales could show a 5 percent increase over 2006, he said.

``There was strength in the Asia-Pacific market in the second quarter,'' added Gladden. ``Europe was fairly strong and North American sales were down less than 5 percent.

``The North American auto market has had a rough ride for 18 months, mostly because of lower build levels and share shifting. But it hasn't been because of a change of material in applications.''

Polycarbonate and ABS continue to face ``a tough dynamic'' because of price increases for raw materials, particularly benzene.

``Benzene has been down recently and that's helped,'' Gladden said. ``But there's still a lot of pressure on the market.''

As GE Plastics, Sabic Innovative Plastics generated sales of $6.7 billion and profit of $674 million in 2006. About $300 million of that sales total came from production of film and sheet based on PC and other engineering resins.


Sabic: No major changes coming

By Frank Esposito
Senior Staff Reporter

Published: September 10, 2007 6:00 am ET

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