Sipchem achieves synergy targets ahead of schedule, realizes value of SAR 298 mln in 2021

Sipchem headquarters

Sahara International Petrochemical Co. (Sipchem) announced achieving synergy targets of the merger with Sahara Petrochemicals Co. ahead of scheduled June 2022 by realizing SAR 298 million in 2021, according to a bourse filing.

The targets were met through planning accuracy, efficient execution, business continuity and rigorous post-merger integration measures.

Sipchem indicated that this was a remarkable achievement relative to other historical business combinations globally in the chemicals and petrochemicals industry.

The Saudi petrochemicals giant pledged in 2019 to generate earnings before interest, taxes, depreciation, and amortization (EBITDA) of SAR 175-225 million three years after completing the merger with Sahara.

Sipchem’s five-pillar strategy targeted to strengthen product portfolio and value chain presence; increase scale and resilience of operations; build on competitive advantages and capabilities; improve efficiency and productivity and maintain growth.

During this period, Sipchem’s preventive maintenance practices and optimization were enhanced. In addition, the company built on its enhanced marketing capabilities and strong presence in the global markets through its offices in Europe and Asia to achieve the largest added value for its products.

In addition, the company launched targeted efforts, after the merger, to renegotiate major contracts such as maintenance, shipping and logistics, loan facilities, etc., with its vendors and financial institutions to drive procurement and cost savings delivery.

Lastly, Sipchem underwent a full portfolio strategy refresh whereby the long-term attractiveness of the products was assessed from a market perspective.

In May 2019, Sipchem announced the completion share swap offer with Sahara to acquire all the latter’s shares in return for 366.67 million new shares in Sipchem.

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