Saudi Basic Industries Corp. brought its position as a major player in global markets for both commodity and engineering resins to K 2019.
Sabic's recent plans include the building of a major petrochemicals site in Texas through a joint venture with ExxonMobil Corp. Plastics News recently caught up via email with Abdulrahman Al-Fageeh, executive vice president of petrochemicals for the firm, which is based in Riyadh, Saudi Arabia. Al-Fageeh has been with Sabic since 1985, holding a wide variety of management roles in its plastics and petrochemicals businesses.
K 2019 in Düsseldorf, Germany, ends on Oct. 23.
Q: What type of growth is Sabic seeing in its plastics business this year? Which end markets are performing best?
Al-Fageeh: Sabic remains optimistic on industry fundamentals over the long term, and we continue to invest for growth. Our operational performance remains robust, and we recently received regulatory approvals to increase our stake in Ar-Razi, the world's largest methanol complex, to 75 percent. We also renewed our partnership with Japan Saudi Arabia Methanol Company (JSMC) for a further 20 years and obtained approval to establish a petrochemical joint venture with ExxonMobil in the U.S. Gulf Coast.
Q: What is Sabic's focus at K 2019? Why is the event important to Sabic?
Al-Fageeh: As the world's largest plastics and rubber trade fair, the K show continues to be important to Sabic as it's an opportunity to showcase our latest innovations and customer collaborations.
Sabic is developing solutions in key industries, such as building and construction, packaging, health and personal care, consumer goods and transportation, that help our customers and stakeholders, along with the whole value chain, reach their sustainability goals of reducing, reusing and preserving.
At K 2019, we'll be highlighting a selection of materials that are helping to answer the challenges our customers face. The event also gives us a platform to inform customers of industry trends that they can take advantage of to stay ahead of the competition, support their goals and promote a circular economy.
Q: Where is Sabic's emphasis on new products via research and development now?
Al-Fageeh: Our goal is to create solutions that provide answers to our customers' — and industry and global — challenges. This meaningful innovation has proven time after time to help our customers stay ahead of the competition, support them in achieving their sustainability goals and drive towards a circular economy.
We're continuing to focus on new advanced solutions from chemical and mechanical recycling and biofeedstocks. At K 2019, we'll be showcasing a variety of our newly developed materials, product designs and circular solutions that minimize waste and create value from post-use plastics.
Q: How are global economic conditions affecting Sabic's plastics business? Is the firm concerned about a possible global recession?
Al-Fageeh: We continue to have an outstanding business and financial track record. We recently took steps to focus our organization to respond to wider changes within the global petrochemical market.
These initiatives have led to us increasing our business agility and improving our cost structure. Petrochemicals and plastics continue to be a growing industry, driven by global megatrends such as increased population growth and mass urbanization, and we recognize that we need to be smart, agile and able to tap into any presented opportunities. However, we will never forget that sustainability is a core value at Sabic.
Q: How is Sabic working to meet its own sustainability goals or those of its customers?
Al-Fageeh: Sustainability has always been at the core of what we do, and it remains crucial to our strategy and success.
To help map out our vision for a more sustainable future and address the critical megatrends affecting society, we've adopted 10 of the United Nation's Sustainable Development Goals where we can feel we can make the most impact and integrated them into our day-to-day business operations and strategy. To formalize this commitment, we launched the Sabic Sustainability Developments Goals Roadmap in June.
Our road map is helping shape our approach to achieving our goals, those of our customers and the demands of today's consumers. It's only by pioneering technology, reengineering operations and establishing creation, open and innovative collaborations and solutions together can we make a difference.
Q: How does the postponement or cancellation of Sabic's deal with Clariant affect the business?
Al-Fageeh: Both Sabic and Clariant AG came to the mutual decision to temporarily defer discussions on a possible merger due to unfavorable market conditions.
We're looking forward to continuing these discussions once conditions have improved, and we remain committed to growing within the specialties market and our strategic vision of becoming one of the top five global leaders.
Q: What are Sabic's expectations for the plastics market in 2020 and beyond?
Al-Fageeh: Our strategy anticipates overall market growth and market share growth, as well as movement up the value chain into higher technology materials.
The chemical industry will continue to be cyclical and global demand will continue to increase, but Sabic's diversity and cost advantage allow us to outperform through the cycle.
We are always looking for opportunities for growth and to provide value for our shareholders, so further acquisitions are always a possibility. That said, we believe that organic growth is a key element of our ultimate business success, and we have always traditionally grown through organic investment, acquisitions and JV projects.