MIRA INFORM REPORT

Report No. :	500775
Report Date :	29.03.2018

IDENTIFICATION DETAILS

Name :	SAUDI BASIC INDUSTRIES CORPORATION (SABIC)
Registered Office :	Sabic Complex, Exit 8, North Ring Road Sitteen Street Al Maather District PO Box 5101 & 59090 & 42503 Riyadh 11525
Country :	Saudi Arabia
Financials (as on) :	31.12.2016
Date of Incorporation :	06.09.1976
Com. Reg. No.:	1010010813
Legal Form :	Joint Stock Company
Line of Business :	Subject is engaged in the manufacture of basic chemicals, intermediates, polymers, fertilizers and metals.
No. of Employees :	40,000

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23^rd January 2017)

MIRA’s Rating :

A++

Credit Rating	Explanation	Rating Comments
A++	Minimum Risk	Business dealings permissible with minimum risk of default

Status :	Excellent
Payment Behaviour :	Regular
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

Country Name	Previous Rating (30.09.2017)	Current Rating (31.12.2017)
Saudi Arabia	A2	A2

Risk Category	ECGC Classification
Insignificant	A1
Low Risk	A2
Moderately Low Risk	B1
Moderate Risk	B2
Moderately High Risk	C1
High Risk	C2
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 : 6^th 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 1^st 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

2^nd 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 6^th 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

ASSETS
Current assets
Cash and cash equivalents	38,484,148	41,081,407
Short-term investments	29,909,811	20,104,858
Accounts receivable	19,377,886	19,988,852
Inventories	24,635,411	23,272,328
Prepayments and other current assets	4,479,146	4,864,295
Total current assets	116,886,402	109,311,740
Non-current assets
Investments	16,725,780	16,948,247
Property, plant and equipment	173,215,113	169,986,938
Intangible assets	16,325,484	16,112,566
Other non-current assets	4,774,770	5,172,847
Total non-current assets	211,041,147	208,220,598
TOTAL ASSETS	327,927,549	317,532,338
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt	13,348,550		13,317,253
Accounts payable	16,298,576	16,544,442
Accruals and other current liabilities	10,860,686	9,644,443
Zakat payable	1,750,727		2,386,336
Total current liabilities	42,258,539	41,892,474
Non-current liabilities
Long-term debt	59,293,134		49,008,155
Other non-current liabilities	3,754,264	3,233,628
Employee benefits	12,742,042	13,089,553
Total non-current liabilities	75,789,440	65,331,336
Total liabilities	118,047,979	107,223,810
EQUITY
Shareholders’ equity
Share capital	30,000,000		30,000,000
Statutory reserve	15,000,000	15,000,000
General reserve	110,889,032	110,889,032
Other reserves	(3,922,174)	(5,801,347)
Retained earnings	10,056,235	12,950,429
Total shareholders’ equity	162,023,093	163,038,114
Non-controlling interests	47,856,477	47,270,414
Total equity	209,879,570	210,308,528
TOTAL LIABILITIES AND EQUITY	327,927,549	317,532,338

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 65.04
UK Pound	1	INR 92.28
Euro	1	INR 80.62
SAR	1	INR 17.34

Note : Above are approximate rates obtained from sources believed to be correct

INFORMATION DETAILS

Analysis Done by :	NIS
Report Prepared by :	TRU

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
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)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.