Advanced CEO says 2021 ‘one of best years’ for petchem industry, sees lower shipping rates in H2 2022

Fahad Al Matrafi, CEO of Advanced Petrochemical

Advanced Petrochemical Co.’s Chief Executive Officer (CEO) expects 2021 to be one the best years for the petrochemicals industry, with strong financial results driven by higher selling prices and despite an increase in feedstock and freight rates, along with supply chain challenges.

In an exclusive interview with Argaam, on the sidelines of the 15th annual GPCA Forum, CEO Fahad Al Matrafi said that product selling prices hit high levels during 2021, but eased in the fourth quarter in countries such as Turkey and other markets in Africa, Europe, and South America.

Demand was robust this year, despite a short-term decrease in some regions. However, there was no impact on polypropylene products, he said.

Advanced works closely with marketers and shipping companies to reduce costs, Al Matrafi said, adding that the sharp rise in polypropylene prices mitigated the impact of high shipping costs, which more than doubled during the period.

Al Matrafi expected a phased decrease in shipping rates during the second half of 2022.

The Omicron coronavirus variant had little impact so far, the CEO said, noting that future effect is expected to be limited thanks to the maturity of all countries in dealing with the COVID-19 pandemic, and the rollout of vaccine across the Kingdom and worldwide.

Al Matrafi said the propane dehydrogenation (PDH) unit and a polypropylene (PP) plant is under construction and will be complete as scheduled. The company’s annual production capacity will double after the project launch, which is expected by mid-2024.

“All options are available. Advanced will take any option that will add value going forward, while focusing on the previously-announced ongoing and future projects,” the CEO said.

He also unveiled talks with Shareek Program, noting that all required information was provided for the program, which will add value to the company without any impact on dividends.

In March, Crown Prince Mohammed bin Salman launched Shareek to strengthen the partnership with the private sector, support local companies and enable them to unlock new local investments valued at SAR 5 trillion by the end of 2030.

Advanced posted a net profit of SAR 654 million in the first nine months of 2021, a 57%rise from SAR 415.8 million a year earlier. The third-quarter bottom line reached SAR 218 million, Argaam reported.