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MIRA
INFORM REPORT
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Report Date : |
12.11.2008 |
IDENTIFICATION
DETAILS
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Name : |
SAUDI BASIC INDUSTRIES CORPORATION (SABIC) |
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Registered Office : |
Sabic Complex, Sitteen Street, Al Maather District, PO Box 5101 &
59090 & 42503, Riyadh 11422 |
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Country : |
Saudi Arabia |
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Financials (as on) : |
31.12.2007 |
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Date of Incorporation : |
06.09. 1976 |
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Com. Reg. No.: |
1010010813, Riyadh |
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Legal Form : |
Joint Stock
Company |
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Line of Business : |
Manufacture of
Basic Chemicals, Intermediates, Polymers, Fertilizers and Metals |
RATING &
COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
US$ 10,000,000 |
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Status : |
Very Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
SUMMARY
Company Name : SAUDI BASIC INDUSTRIES CORPORATION
(SABIC)
Country of Origin : Saudi
Arabia
Legal Form :
Joint Stock Company
Registration Date : 6th
September 1976
Commercial
Registration Number :
1010010813, Riyadh
Issued Capital : SR
25,000,000,000
Paid up Capital : SR
25,000,000,000
Total Workforce : 16,000
Activities :
Manufacture of basic chemicals, intermediates, polymers, fertilizers and
metals
Financial Condition : Strong
Payments :
Nothing detrimental uncovered
Operating Trend : Steady
Recommended Credit
Limit : US$ 10,000,000
COMPANY NAME
SAUDI BASIC INDUSTRIES CORPORATION (SABIC)
ADDRESS
Registered & Physical Address
Building : Sabic
Complex
Street : Sitteen
Street
Area : Al Maather
District
PO Box : 5101 &
59090 & 42503
Town : Riyadh 11422
Country : Saudi Arabia
Telephone : (966-1) 4012033
/ 4069900 / 2258000
Facsimile : (966-1)
4012045 / 4013831 / 2259000
Premises
Subject operates from a large suite of offices that are owned and
located in the Central Business Area of Riyadh.
Branch Office (s)
Location Description
· PO Box : 10040 Factory
premises
Al Jubail 31961
Tel : (966-3)
3477200
Fax : (966-3)
3411552
· PO Box : 30382 Factory
premises
Yanbu
Tel : (966-4)
3211660
Fax : (966-4)
3211754
· PO Box : 2629 Factory
premises
Dammam 31461
Tel : (966-3)
8575000
Fax : (966-3)
8578075
· PO Box : 5027 Office
premises
Al Qassim
Tel : (966-6)
3220866
Fax : (966-6)
3220376
· PO Box : 30204 Office
premises
Jeddah 21477
Tel : (966-2)
6352802
Fax : (966-2)
6362561
KEY PRINCIPALS
Name Position
· HH Prince Saud Bin
Thunayan Al Saud Chairman
· Mohamed
H Al Mady Vice
Chairman & Chief Executive Officer
· Abdulmuhsin A Al
Faris Director
· Ahmed Al Hakami Director
· Mohamed S.
Abanumay Director
· Abdullah M. Al
Issa Director
· Saleh E. Al
Husseini Director
·
Abdullah Nojaidi Manager
– Petrochemicals
· Abdulrahman
Al Ubaid Manager
– Polyolefins
· Fahad
Al Sheaibi Manager
– PVC / Polyester
· Khaled
Al Mana Manager
– Intermediate Chemicals
·
Mohammad Al Jaber Manager
– Metals
·
Nasser Al Sayyari Manager
– Fertilisers
· Yousef
Al Zamel Manager
– Basic Chemicals
· Ibrahim
Al Shuweir Manager
– Research & Technology
·
Homood Al Tuwaijri Manager
– Finance
·
Mohammad Al Bat'hi Manager
– Human Resources
LEGAL FORM & OWNERS
Date of
Establishment : 13/9/1396 Hijri
(corresponding to 6th September 1976)
Legal Form : Joint Stock
Company
Commercial Reg.
No. : 1010010813, Riyadh
Issued Capital : SR 25,000,000,000
Paid up Capital : SR 25,000,000,000
Name of Shareholder (s) Percentage
· Government of Saudi
Arabia 70%
· Local businessmen
and private investors 30%
AFFILIATED COMPANIES
Name Shareholding
%
Arabian Petrochemical Company and subsidiary (Petrokemya)
100.00
Saudi Iron and Steel Company (Hadeed)
100.00
SABIC Industrial Investments Company and subsidiaries (SIIC)
100.00
SABIC Luxembourg S.à.r.l. and subsidiaries 100.00
SABIC Asia Pacific Pte. Ltd. and subsidiaries 100.00
SABIC Antilles N.V. 100.00
Jubail United Petrochemical Company (United) 75.00
National Chemical Fertilizer Company (Ibn Al-Baytar) 71.50
National Industrial Gases Company (Gas) 70.00
Saudi European Petrochemical Company (Ibn Zahr) 70.00
Arabian Industrial Fiber Company (Ibn Rushd) 53.90
Saudi Methanol Company (Ar-Razi) 50.00
Al-Jubail Fertilizer Company (Al-Bayroni ) 50.00
Saudi Yanbu Petrochemical Company (Yanpet) 50.00
National Methanol Company (Ibn Sina) 50.00
Saudi Petrochemical Company (Sadaf) 50.00
Eastern Petrochemical Company (Sharq)
50.00
Al-Jubail Petrochemical Company (Kemya) 50.00
Saudi Arabian Fertilizer Company (Safco) 42.99
OPERATIONS
Activities: Engaged in the manufacture of basic chemicals, intermediates, polymers,
fertilizers and metals.
· Basic Chemicals -
SABIC’s basic chemicals include methanol, ethylene, propylene, benzene, xylene,
MTBE (Methyl Tertiary Butyl Ether), Styrene, CIE (Crude Industrial Ethanol),
butadiene and butene-1.
· Intermediates -
Intermediates chemicals such as EG, EDC, VCM, 2-EH, Caustic Soda and DOP are
ingredients used by the petrochemical industry to manufacture other products.
Intermediates chemicals are produced for use by SABIC and for export to
industries around the world using basic chemicals as raw materials. The
intermediates sector also produces a range of industrial gases - Oxygen,
Nitrogen, Argon and Krypton-Xenon.
· Polymers - SABIC
is one of the largest exporters of plastics in the world with a production
capacity of nearly 4 million tons. They produce three different polyethylenes;
polypropylene, PVC and general purpose, high impact and expandable
polystyrenes. They produce polyester fibers and filaments, textile grade chips
and PET packaging resins and also melamine.
· Fertilizers -
SABIC's fertilizer group is dedicated to helping the worldwide agriculture
industry produce higher yields of quality crops to feed an ever-growing global
population. The range of products includes, ammonia and urea, as well as
compound, phosphate and liquid fertilizers. SABIC is now the world's largest
exporter of urea. SABIC’s nitrogen, phosphate and compound fertilizers are used
in an increasing number of applications to improve food security worldwide. In
Saudi Arabia, SABIC fertilizers provide the essential nutrients needed to
achieve impressive crop yields from farm acreage that until recently had been
arid desert.
· Metals - The
Metals Group is a major part of SABIC's diversified manufacturing portfolio in
Saudi Arabia. Today, its wholly owned Saudi Iron & Steel Co (Hadeed)
affiliate is the leading steel maker in the Gulf region. Since 1983, Hadeed has
produced long steel products for the Kingdom's construction industry. Its output
now includes flat, hot and cold rolled steel for expanding Saudi and regional
engineering and manufacturing industries. The Metals Group also manages large
offshore aluminium manufacturing shareholdings in Bahrain, as well as the sales
and marketing of ferro-alloys produced in Saudi Arabia.
Import & Export Countries: Worldwide
Brand Names: SABIC
Operating Trend: Steady
Subject has a workforce of approximately 16,000 employees.
FINANCIAL DATA
Financial highlights provided by local sources are given below:
Currency: Saudi Riyals (SR’000)
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Balance Sheet |
31/12/2005 |
31/12/2006 |
31/12/2007 |
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Current Assets |
45,638,399 |
60,316,196 |
77,181,806 |
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Inventory |
10,642,446 |
13,658,245 |
22,305,959 |
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Investments |
5,898,098 |
3,531,839 |
5,427,127 |
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Fixed Assets |
66,096,734 |
79,970,622 |
123,113,574 |
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Other Assets |
8,674,803 |
9,111,918 |
28,218,815 |
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Total Assets |
136,950,480 |
166,588,820 |
256,247,281 |
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Current Liabilities |
21,947,116 |
25,724,086 |
31,707,968 |
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Non-Current Liabilities |
23,017,180 |
40,374,497 |
90,043,041 |
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Other Liabilities |
29,645,567 |
27,607,078 |
43,342,241 |
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Shareholder's Equity |
62,340,617 |
72,883,159 |
91,154,031 |
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Total Liabilities & Shareholders Equity |
136,950,480 |
166,588,820 |
256,247,281 |
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Statements of Income |
31/12/2005 |
31/12/2006 |
31/12/2007 |
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Sales |
78,253,536 |
86,327,862 |
126,204,404 |
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Sales Cost |
45,169,206 |
51,415,477 |
78,254,228 |
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Total Income |
33,084,330 |
34,912,385 |
47,950,176 |
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Other Revenues |
1,237,428 |
2,552,369 |
4,230,235 |
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Total Revenues |
34,321,758 |
37,464,754 |
52,180,411 |
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Admin and Marketing Expenses |
3,914,352 |
4,026,265 |
6,903,653 |
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Depreciation |
0 |
0 |
0 |
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Other Expenses |
10,497,721 |
12,094,547 |
16,454,486 |
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Total Expenses |
14,412,073 |
16,120,812 |
23,358,139 |
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Net Income Before Zakat |
19,909,685 |
21,343,942 |
28,822,272 |
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Zakat |
750,000 |
1,050,000 |
1,800,000 |
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Net Income |
19,159,685 |
20,293,942 |
27,022,272 |
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Balance First Period |
13,209,138 |
14,043,717 |
14,514,548 |
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Reserves |
10,623,706 |
10,071,711 |
10,567,785 |
|
Cash Dividends |
9,200,000 |
10,000,000 |
7,500,000 |
|
Other Distributions |
1,400 |
1,400 |
1,400 |
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Balance End Period |
12,543,717 |
14,264,548 |
23,467,635 |
Local sources consider subject’s financial condition to be Strong.
BANKERS
·
National Commercial Bank
Malaz Branch
PO Box : 42536
Riyadh 11551
Tel : (966-1) 4776450
Fax : (966-1)
4769502
·
Arab National Bank
King Faisal Street
PO Box : 56921
Riyadh 11564
Tel : (966-1)
4029000
Fax : (966-1) 4027747
PAYMENT HISTORY
No complaints regarding subject’s payments have been reported.
Date of
transaction July 2002 January
2005 April 2008
Credit amount 250,000 397,024 400,000
Amount overdue 0 0 0
Payment terms 60
days 60 days 90 days
Payment Method Letters
of Credit Letters of Credit Letters of Credit
Paying record No
Complaints No Complaints No Complaints
Currency Canadian
Dollars Canadian Dollars Euros
GENERAL COMMENTS
Established in 1976, SABIC is widely regarded as the largest
manufacturing company in the Middle East. Engaged in the manufacture of basic
chemicals, intermediates, polymers, fertilizers and metals.
The Saudi Basic Industries Corporation (SABIC) has reported
net preliminary consolidated profits of SAR 21.71 billion for the first nine
months of 2008, an increase of 8 percent, compared to the SAR 20.16 billion net
profit in the same period last year. SABIC has also reported consolidated
preliminary operating profits of SAR 35.58 billion for the third quarter (3Q)
of 2008, compared to SAR 29.64 billion in the same period last year, an
increase of 20 percent over the 3Q-2007.
This increase is due to an improvement in the prices of most
key products in line with an increase of volume of productivity and sales by 4
percent and 3 percent respectively. 3Q2008 reported net profits of SAR 7.24
billion compared to SAR 7.39 billion for the same quarter last year, a decrease
of 2 percent.
SABIC Vice Chairman and Chief Executive Officer, Mohamed Al
Mady said: “There is no impact on SABIC’s financial operations as a result of
the existing financial crisis. Loans necessary to finance projects buildup and
existing expansions have been completed in ample time prior to the start of the
current crisis. However, the expected global recession may lead to a decline in
demand for products in most of the international markets”.
Local sources report subject has made very good progress in the
international market and enjoys a good reputation for the quality of its
products. The operating history is clear with payment obligations met in a
timely manner. As such subject is considered to be a fair trade risk.
FOREIGN EXCHANGE
RATES
|
Currency |
Unit
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Indian Rupees |
|
US Dollar |
1 |
Rs.48.79 |
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UK Pound |
1 |
Rs.75.41 |
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Euro |
1 |
Rs.61.48 |
RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)