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MIRA INFORM REPORT
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Report No. : |
490720 |
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Report Date : |
10.02.2018 |
IDENTIFICATION DETAILS
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Name : |
SAUDI BASIC INDUSTRIES CORPORATION (SABIC) |
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Registered Office : |
Sabic Complex, Exit 8, North Ring Road, Sitteen Street, Al Maather
District, PO Box 5101 & 59090 & 42503, Riyadh 11525 |
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Country : |
Saudi Arabia |
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Financials (as on) : |
31.12.2016 |
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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 : |
Subject is engaged in the manufacture of basic chemicals,
intermediates, polymers, fertilizers and metals. |
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No. of Employees : |
40,000 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A++ |
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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Status : |
Excellent |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List
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Country Name |
Previous Rating (30.06.2017) |
Current Rating (30.09.2017) |
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Saudi Arabia |
A2 |
A2 |
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Risk Category |
ECGC Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
SAUDI ARABIA - ECONOMIC OVERVIEW
Saudi Arabia has an oil-based economy with strong government controls over
major economic activities. It possesses about 16% of the world's proven
petroleum reserves, ranks as the largest exporter of petroleum, and plays a
leading role in OPEC. The petroleum sector accounts for roughly 87% of budget
revenues, 42% of GDP, and 90% of export earnings.
Saudi Arabia is encouraging the growth of the private sector in order to
diversify its economy and to employ more Saudi nationals. Over 6 million
foreign workers play an important role in the Saudi economy, particularly in
the oil and service sectors; at the same time, however, Riyadh is struggling to
reduce unemployment among its own nationals. Saudi officials are particularly
focused on employing its large youth population, which generally lacks the
education and technical skills the private sector needs.
In 2017, the Kingdom incurred a budget deficit estimated at 8.3% of GDP,
which was financed by bond sales and drawing down reserves. Although the
Kingdom can finance high deficits for several years by drawing down its
considerable foreign assets or by borrowing, it has cut capital spending and
reduced subsidies on electricity, water, and petroleum products and plans to
introduce a value-added tax. In January 2016, Crown Prince and Deputy Prime
Minister MUHAMMAD BIN SALMAN announced that Saudi Arabia intends to list shares
of its state-owned petroleum company, ARAMCO - another move to increase revenue
and outside investment. The government has also looked at privatization and
diversification of the economy more closely in the wake of a diminished oil
market. Historically, Saudi Arabia has focused diversification efforts on power
generation, telecommunications, natural gas exploration, and petrochemical
sectors. More recently, the government has approached investors about expanding
the role of the private sector in the health care, education and tourism
industries. While Saudi Arabia has emphasized their goals of diversification
for some time, current low oil prices may force the government to make more
drastic changes ahead of their long-run timeline.
|
Source
: CIA |
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
Membership Number :
70000
Issued Capital :
SR 30,000,000,000
Paid up Capital :
SR 30,000,000,000
Total Workforce :
40,000
Activities :
Manufacture of basic chemicals, intermediates, polymers, fertilizers and
metals
Financial Condition :
Good
Payments :
Regular
Operating Trend :
Steady
Person Interviewed :
Mohamed Nasser Al Ghamdi, Administration Manager
COMPANY
NAME
SAUDI BASIC INDUSTRIES CORPORATION (SABIC)
ADDRESS
Registered &
Physical Address
Location : Sabic Complex,
Exit 8, North Ring Road
Street : Sitteen
Street
Area : Al Maather
District
PO Box :
5101 & 59090 & 42503
Town : Riyadh 11525
Country : Saudi Arabia
Telephone : (966-11)
4012033 / 4069900 / 2258000
Facsimile : (966-11)
4012045 / 4013831 / 2259000
Email : info@sabic.com
/ dalaanas@sabic.com
/ ghamdinm@sabic.com
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
Highway 218 Factory
premises
Jubail 1st Industrial City
PO Box: 10040 & 11115
Al Jubail 31961
Tel: (966-13) 3477200 / 3595155 / 3452567 / 3471160
Fax: (966-13) 3411552 / 3595394 / 3452996 / 3477993
CR No. 2055003702
PO Box: 30382 Factory
premises
Yanbu
Tel: (966-14) 3211660
Fax: (966-14) 3211754
CR No. 4700012745
PO Box: 2629 Factory
premises
Dammam 31461
Tel: (966-13) 8575000
Fax: (966-13) 8578075
PO Box: 5027 Office
premises
Al Qassim
Tel: (966-16) 3220866
Fax: (966-16) 3220376
PO Box: 30204 Office
premises
Jeddah 21477
Tel: (966-12) 6352802
Fax: (966-12) 6362561
CR No. 4030204784
Prince Abdul Rahman Bin Abdul Aziz Street Office premises
Dhabab
2nd Industrial Zone
PO Box: 5101
Riyadh 11422
Tel: (966-11) 4985555
CR No. 1010152830
KEY
PRINCIPALS
Name Position
HH Prince Saud Bin Thunayan Al Saud Chairman
Mohamed Bin Mohamed Al Mady Vice
Chairman & Chief Executive Officer
Dr Abdulrahman Abdullah Al Humaidi Director
Bander Abdulaziz Al Wael Director
Abdulaziz Habdan Al Habdan Director
Mohammed Abdullah Al Kharashi Director
Dr Khaled Nahas Director
Abdullah M Al Issa Director
Dr Saad Bin Abdullah Bin Othman Al Kasabi Director
Abdullah Hassan Al Sheikh Director
Yusuf Bin Abdullah Al Bunyan Chief
Executive Officer
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
Khaled Al Mana Manager
– Fertilisers
Yousef Al Zamel Manager
– Basic Chemicals
Ibrahim Al Shuweir Manager
– Research & Technology
Homood Al Tuwaijri Manager
– Finance
Fahad Al Sheaibi Manager
– Human Resources
M S Humaid Senior
Planning Manager
Abdulrahman Al Dalaan Procurement Manager
Mohamed Nasser Al Ghamdi Administration
Manager
Naveed Sheikh Fareed Company
Secretary
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
Membership No. : 70000
Issued Capital : SR 30,000,000,000
Paid up Capital : SR 30,000,000,000
Name of
Shareholder (s) Percentage
Government of Saudi Arabia 70.0%
Local businessmen and private investors 24.3%
General Organization for Social Insurance (GOSI)
5.7%
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 Sukuk Company 100.00
SABIC Industrial Catalyst Company 100.00
Saudi European Petrochemical Company (Ibn Zahr)
80.00
Jubail United Petrochemical Company (United)
75.00
National Chemical Fertilizer Company (Ibn Al-Baytar) 71.50
National Industrial Gases Company (Gas) 70.00
Yanbu National Petrochemical Company 51.95
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 Japanese Acrylonitrile Company 50.00
Saudi Methacrylates Company 50.00
Arabian Industrial Fiber Company (Ibn Rushd)
48.07
Saudi Arabian Fertilizer Company (Safco) 42.99
Saudi Kayan Petrochemical Company 35.00
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.
Sabic Supply Management Organization Ltd is not a separate legal entity.
It is a division of the subject that is
responsible for internal issues relating to purchasing, account
management and local business development.
Import & Export Countries: Worldwide
Local Clients:
Group Five Pipe Saudi Company
Arabian Sulfonates Co Ltd
Brand Names: SABIC
Operating Trend: Steady
Subject has a workforce of approximately 40,000 employees.
FINANCIAL
DATA
Financial highlights
provided by local sources are given below:
Currency: Saudi
Riyals (SR’000)
Consolidated Balance Sheet 31/12/15 31/12/16
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ASSETS |
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Current assets |
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Cash and cash equivalents |
38,484,148 |
41,081,407 |
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Short-term investments |
29,909,811 |
20,104,858 |
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Accounts receivable |
19,377,886 |
19,988,852 |
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Inventories |
24,635,411 |
23,272,328 |
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Prepayments and other current assets |
4,479,146 |
4,864,295 |
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Total current assets |
116,886,402 |
109,311,740 |
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Non-current assets |
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Investments |
16,725,780 |
16,948,247 |
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Property, plant and equipment |
173,215,113 |
169,986,938 |
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Intangible assets |
16,325,484 |
16,112,566 |
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Other non-current assets |
4,774,770 |
5,172,847 |
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Total non-current assets |
211,041,147 |
208,220,598 |
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TOTAL ASSETS |
327,927,549 |
317,532,338 |
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LIABILITIES AND EQUITY |
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Current liabilities |
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Current portion of long-term debt |
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13,348,550 |
13,317,253 |
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Accounts payable |
16,298,576 |
16,544,442 |
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Accruals and other current liabilities |
10,860,686 |
9,644,443 |
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Zakat payable |
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1,750,727 |
2,386,336 |
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Total current liabilities |
42,258,539 |
41,892,474 |
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Non-current liabilities |
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Long-term debt |
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59,293,134 |
49,008,155 |
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Other non-current liabilities |
3,754,264 |
3,233,628 |
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Employee benefits |
12,742,042 |
13,089,553 |
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Total non-current liabilities |
75,789,440 |
65,331,336 |
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Total liabilities |
118,047,979 |
107,223,810 |
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EQUITY |
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Shareholders’ equity |
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Share capital |
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30,000,000 |
30,000,000 |
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Statutory reserve |
15,000,000 |
15,000,000 |
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General reserve |
110,889,032 |
110,889,032 |
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Other reserves |
(3,922,174) |
(5,801,347) |
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Retained earnings |
10,056,235 |
12,950,429 |
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Total shareholders’ equity |
162,023,093 |
163,038,114 |
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Non-controlling interests |
47,856,477 |
47,270,414 |
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Total equity |
209,879,570 |
210,308,528 |
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TOTAL LIABILITIES AND EQUITY |
327,927,549 |
317,532,338 |
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Consolidated Statement of Income
Sales 149,167,376 132,977,295
Cost of sales (106,161,590) (92,011,536)
GROSS PROFIT 43,005,786 40,965,759
Selling, general, and administrative
expenses (13,787,918)
(12,618,132)
Impairment of plant and equipment
of a subsidiary (780,615) (1,467,506)
INCOME FROM MAIN OPERATIONS 28,437,253 26,880,121
Share in earnings of equity-accounted
investees 1,201,842 873,556
Financial charges (1,492,737) (1,704,975)
Other income 1,371,657 2,080,965
INCOME BEFORE SHARE OF
NON-CONTROLLING INTERESTS
AND ZAKAT 29,518,015
28,129,667
Share of non-controlling interests (8,633,795) (7,218,143)
INCOME
BEFORE ZAKAT 20,884,220 20,911,524
Zakat (2,100,000) (3,000,000)
NET INCOME 18,784,220 17,911,524
Local sources consider subject’s financial condition to be Good.
BANKERS
National Commercial Bank
Malaz Branch
PO Box: 42536
Riyadh 11551
Tel: (966-11) 4776450
Fax: (966-11) 4769502
Arab National Bank
King Faisal Street
PO Box: 56921
Riyadh 11564
Tel: (966-11) 4029000
Fax: (966-11) 4027747
PAYMENT
HISTORY
Regular
GENERAL
COMMENTS
Established in 1976, SABIC is widely regarded as the largest
manufacturing company in the Middle East and is engaged in the manufacture of
basic chemicals, intermediates, polymers, fertilizers and metals.
The subject and its shareholders/owners have been searched in the
following databases; Office of Foreign Assets Control (OFAC), United Nations
Security Council Sanctions, Australian Sanctions List, US Consolidated
Sanctions List, EU Financial Sanctions List and UK Financial Sanctions List and
nothing adverse could be found on the exact names listed within the report.
During the course of this investigation nothing detrimental was
uncovered regarding subject’s operating history or the manner in which payments
are fulfilled. As such the company is considered to be a fair trade risk.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
INR 64.37 |
|
|
1 |
INR 89.71 |
|
Euro |
1 |
INR 78.89 |
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SAR |
1 |
INR 17.13 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
VIV |
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Report Prepared
by : |
NIT |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
|
A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
|
A+ |
Low Risk |
Business dealings permissible with low
risk of default |
|
A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
|
B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
|
C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
|
D |
High Risk |
Business dealing not recommended or on secured
terms only |
|
NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.