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MIRA INFORM REPORT
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Report No. : |
497407 |
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Report Date : |
10.03.2018 |
IDENTIFICATION DETAILS
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Name : |
EQUATE
PETROCHEMICAL CO KSCC |
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Registered Office : |
Olympia Towers, Ras
Al Ard, Block 2, 8th Floor, Salem Al Mubarak Street, Salmiya, P O
Box: 4733, Safat 13048 |
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Country : |
Kuwait |
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Financials (as on) : |
31.12.2016 |
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Date of Incorporation : |
04.12.1995
(Production Began in November 1997) |
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Legal Form : |
Kuwaiti
Shareholding Company Closed – KSCC |
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Line of Business : |
Subject is
engaged in the Production of Ethylene, Ethylene Glycol, Polyethylene and
Polypropylene. |
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No. of Employees : |
1,000 |
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+ |
Low Risk |
Business dealings permissible with low
risk of default |
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Status : |
Good |
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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 (30.09.2017) |
Current Rating (31.12.2017) |
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Kuwait |
A1 |
A1 |
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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 |
KUWAIT - ECONOMIC OVERVIEW
Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 102 billion barrels - more than 6% of world reserves. Kuwaiti officials plan to increase production to 4 million barrels of oil equivalent per day by 2020. Petroleum accounts for over half of GDP, 92% of export revenues, and 90% of government income.
In 2015, Kuwait, for the first time in 15 years, realized a budget deficit after decades of high oil prices; in 2016, the deficit grew to 16.5% of GDP. Kuwaiti authorities announced cuts to fuel subsidies in August 2016, provoking outrage among the public and National Assembly, and the Amir dissolved the government for the seventh time in ten years. Despite Kuwait’s dependence on oil, the government has cushioned itself against the impact of lower oil prices, by saving annually at least 10% of government revenue in the Fund for Future Generations.
Kuwait has failed to diversify its economy or bolster the private sector, because of a poor business climate, a large public sector that employs about 76% of citizens, and an acrimonious relationship between the National Assembly and the executive branch that has stymied most economic reforms. The Kuwaiti Government has made little progress on its long-term economic development plan first passed in 2010. While the government planned to spend up to $104 billion over four years to diversify the economy, attract more investment, and boost private sector participation in the economy, many of the projects did not materialize because of an uncertain political situation or delays in awarding contracts.
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Source
: CIA |
SUMMARY
Company Name : EQUATE
PETROCHEMICAL CO KSCC
Country of Origin : Kuwait
Legal Form :
Kuwaiti Shareholding Company Closed – KSCC
Registration Date : 4th
December 1995
Trade Licence
Number : 63392
Chamber Membership
Number : 48090
Issued Capital : KD
86,000,000
Paid up Capital : KD
86,000,000
Total Workforce :
1,000
Activities :
Production of Ethylene, Ethylene Glycol, Polyethylene
and Polypropylene
Financial Condition : Good
Payments :
Regular
Operating Trend : Steady
COMPANY
NAME
EQUATE
PETROCHEMICAL CO KSCC
ADDRESS
Registered & Physical
Address
Building : Olympia Towers, Ras Al Ard, Block
2, 8th Floor
Street : Salem Al Mubarak Street
Area : Salmiya
PO Box : 4733
Town : Safat 13048
Country : Kuwait
Telephone : (965) 24343666 / 24312568 / 23436661
/ 1898888
Facsimile : (965) 24312560 / 24312557 / 24312558
/ 25765733
Email : hayatm@shb.equate.com / pemarket@equate.com
Premises
Subject operates
from a large suite of offices that are rented and located in the Central
Business Area of Safat.
Branch Office
(s)
Location Description
·
PO Box:
9116 Sales
Office
Safat 13048
Tel: (965) 22445655
Fax: (965) 22415121
·
Equate
Complex Production
plant
PO Box: 9729
Ahmadi 61008
Tel: (965) 23260326 / 23725630
·
Shuaiba Administrative
Office
Tel: (965) 23260238
Fax: (965) 23260302
KEY
PRINCIPALS
Name Position
·
Hosnia
Hashim Chairman
·
Raja
Zeidan Vice
Chairman
·
Dabbous
Al Dabbous Director
· Sheikh Mubarak
Al Sabah Director
·
Luis
Antuna Director
·
Javier
Constante Director
·
Abdullah
Al Sumaiti Director
·
Fahad
Al Dihani Director
·
Luciano
Poli Director
·
Naser
Aldousari Director
·
Mohammad
Hussain President
·
Dr
Ramesh Ramachandran Vice
President
·
Arnd
Thomas Operations
Manager
·
Phisanu
Sermchaiwong Chief
Financial Officer
·
Tareq
Al Kandari Technical
Manager
·
Abeer
Al Omar Administration
Manager
LEGAL
FORM & OWNERS
Date of Establishment : 4th
December 1995 (Production began in November 1997)
Legal Form :
Kuwaiti Shareholding Company
Closed – KSCC
Trade Licence No. : 63392
Industrial
Licence No. : 95-449-MM
Chamber Member No. : 48090
Issued Capital : KD 86,000,000
Paid up Capital : KD 86,000,000
Name of Shareholder (s) Percentage
·
Petrochemical
Industries Company KSC (PIC) * 42.5%
Shakir Al Kazimi Building
Khalid Ibn Waleed Street
PO Box: 1084
Safat 13011
Kuwait
Tel: (965) 22448280 / 22422141
Fax: (965) 22405791 / 22445913 / 23261544
·
The Dow
Chemical Company 42.5%
United States of America
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Bubiyan
Petrochemicals Company 9.0%
·
Qurain
Petrochemical Industries Company 6.0%
AFFILIATED
COMPANIES
Subject is partly owned by Petrochemical Industries Company KSC (PIC)
which in turn is wholly owned by Kuwait Petroleum Corporation (KPC), which has
overall responsibility for Kuwait’s local and foreign oil industry investments.
The following concerns are wholly or partly owned by KPC:
Name Percentage
Held
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Kuwait
Oil Co (KOC) 100%
PO Box: 9758
Ahmadi 61008
Tel:
(965) 3989111 / 3984111
Fax: (965) 3982661
·
Kuwait
National Petroleum Co (KNPC) 100%
PO Box: 70
Safat 13001
Tel: (965) 2420121 / 2449401
Fax: (965) 2442954
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Kuwait
Oil Tanker Co (KOTC) 100%
PO Box: 810
Safat 13009
Tel: (965) 2455455
Fax: (965) 2445907
·
Kuwait
Foreign Petroleum Exploration Co (KUFPEC) 100%
PO Box: 5291
Safat 13053
Tel: (965) 2421677
Fax: (965) 2437985
·
Kuwait
Santa Fe Braun for Engineering & Petroleum Enterprises KSC 100%
PO Box: 9282
Ahmadi 61003
Tel: (965) 3985011
Fax: (965) 3981030
·
Kuwait
Aviation Fuelling Co KSC (KAFCO) 100%
PO Box: 1654
Safat 13017
Tel: (965) 4330507 / 4330483
Fax: (965) 4330475
·
SFIC
Holdings (Cayman) Inc 100%
Cayman Islands
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KPC
Holdings (Aruba) AEC 100%
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Petrochemical
Industries Holdings NV 100%
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KP
North Sea Holdings Ltd 100%
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Gulf
Industrial Investment Co EC 100%
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Kuwait
Drilling Co KSC 49%
·
Equate Marketing
Co 49%
Bahrain
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Gulf
Petrochemical Industries Co (GPIC) 33%
Bahrain
·
Sino
Arab Chemical Fertilizer Co (SACF) 30%
China
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Arabian
Oil Company 10%
OPERATIONS
Activities: Engaged in the production of Ethylene, Ethylene
Glycol, Polyethylene and Polypropylene. Production
began at the US$ 2 billion Shuaiba complex in November 1997.
Subject has been awarded the ISO 9002 certificate for all its operating
units and also received the ISO 14001 in 2004.
The company is going to build a new ethylene and derivatives complex in
Shuaiba, named Olefins II project. Fluor Corporation has signed a MoU to
provide engineering, procurement and construction management services for the
utilities and infrastructure portion of the project. This scope is in addition
to the programme management contract it was awarded in 2004 to perform overall
management consultancy and front-end engineering services.
The billion-plus-dollar project is located approximately 40
km, south of Kuwait City in Shuaiba. Olefins II will include construction
of an 850,000-tonnes-per-year (tpy) cracker, a 600,000 tpy ethylene glycol
unit, a 450,000 tpy ethyl benzene/styrene monomer unit and a debottleneck
expansion of an additional 225,000 tpy of polyethylene capacity at the existing
complex. Olefins II will be similar in volume to the first project and,
consequently, the completed facility will double the capacity at the existing
olefins complex.
Subject has contributed to the growth of the local plastics industry by
over 400% from 1998 to 2014, and has supported Kuwaiti producers of plastics to
launch export operations of their products to several countries around the
world. Moreover, the subject has introduced several sustainability-based
initiatives within and outside Kuwait by establishing sustainable partnerships
with many governmental, private and civic organizations in industrial, medical,
educational, health, professional development, safety, health and other fields.
Production Capacity: Ethylene 850,000
tonnes per annum
Ethylene
Glycol 550,000 tonnes per
annum
Propylene 600,000 tonnes per annum
Import
Countries: Europe and the
United States of America.
Operating Trend: Steady
Subject has a
workforce of approximately 1,000 employees.
FINANCIAL
DATA
Financial highlights provided by local
sources are given below:
Currency: United States Dollar (US$
millions)
Balance Sheet 31/12/2016 31/12/2015
Assets
Property, plant and
equipment 1,762 1,899
Goodwill 1,689 1,636
Intangible assets 417 465
Deferred tax assets 33 41
Deferred charges
and other assets 297 306
Loans to related
parties 384 726
Non-current assets 4,582 5,073
Inventories 229 232
Loans to related
parties 140 183
Due from related
parties 49 235
Trade and other
receivables 688 602
Deferred charges
and other assets 23 22
Cash and bank
balances 1,542 1,203
Current assets 2,671 2,477
Total assets 7,253 7,550
Equity
Share capital 700 700
Treasury shares (450) (450)
Statutory reserve 350 350
Re-measurement of
retirement benefit obligation (52) (44)
Foreign currency
translation reserve 6 5
Retained earnings 415 403
Total equity 969 964
Liabilities
Loans and
borrowings 4,672 -
Deferred income 368 404
Deferred tax
liabilities 252 287
Retirement benefit
obligation 310 273
Long term
incentives 4 5
Non-current
liabilities 5,606 969
Loans and
borrowings - 4,970
Long term
incentives 5 5
Deferred income 32 32
Due to related
parties 277 299
Trade and other
payables 364 311
Current liabilities 678 5,617
Total liabilities 6,284 6,586
Total equity and
liabilities 7,253 7,550
Income Statement
Sales 3,645 838
Cost of sales (3,042) (596)
Gross profit 603 242
Management fee 9 4
Reservation right
fees 32 16
General,
administrative and selling expenses (93) (12)
Other income 6 -
Foreign exchange
(loss)/gain (4) 1
Profit from
operations 553 251
Finance income 36 6
Finance costs (122) (6)
Profit before KFAS,
Zakat, tax of subsidiaries
and board of
directors remuneration 467 251
KFAS (4) (3)
Zakat (3) (14)
Tax of subsidiaries (45) -
Board of directors
remuneration - -
Net profit for the
period 415 234
Local sources
consider subject’s financial condition to be Good.
BANKERS
·
National
Bank of Kuwait SAK
Main Branch
Ahmadi
Tel: (965) 23981188 / 23981189
Fax: (965) 23985643
·
Bank of
Kuwait & the Middle East KSC
Abdullah Al Salem Street
Darwaza Abdul Razzak
PO Box: 71
Safat 13001
Tel: (965) 22459771
Fax: (965) 22461430
PAYMENT
HISTORY
Regular
GENERAL
COMMENTS
Equate
Petrochemical Co KSC (C) was incorporated in 1995 with production beginning in
1997. It is the largest petrochemical project in Kuwait and is 42.5% owned by
the well known Petrochemical Industries Company KSC (PIC).
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
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.07 |
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|
1 |
INR 89.85 |
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Euro |
1 |
INR 80.16 |
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KWD |
1 |
INR 216.43 |
Note:
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
: |
VIV |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
|
Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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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.