BCI posts 'strong' full-year results on sales growth, restructuring to reflect positively on Q1 performance: CEO

Alaa Al-Sheikh, Chief Executive Officer of Basic Chemical Industries

Alaa Al-Sheikh, Chief Executive Officer of Basic Chemical Industries (BCI) said that the company posted strong financial results in 2021, mainly driven by the sales growth, as well as the strong growth of joint ventures.

In an interview with Argaam, the top official indicated that the company's sales as considered within the group, which are partnerships with Henkel and Huntsman groups for the manufacture of industrial adhesives and polyurethane systems for insulation and construction, respectively, are equivalent to 63% of BCI's total annual sales.

Meanwhile, sales of the remaining percentage are industries and businesses wholly owned by the company and are divided into four commercial units; the basic chemicals unit constitutes 19% of sales of chlorine and its derivatives, i.e. caustic soda, hydrochloric acid and sodium hypochlorite. The unit also includes sales of sulfuric acid and constitutes 2% of the group's annual sales, said the CEO.

He pointed out that the second and third units of industrial chemicals and water treatment together constitute 11% of total sales, while the contractual manufacturing unit constitutes 5% of the company's sales.

As for his expectations for BCI's performance in Q1 2022, the CEO said: “The company has witnessed a strong move towards restructuring last year, and while this continues in 2022, we expect that upgrades and developments within the company to reflect positively on its performance during the first quarter".

Al-Sheikh said that the prices of chlorine, caustic soda and hydrochloric acid products will likely stabilize in Q1 2022 at the levels of Q4 2020, noting that the company is committed at a large percentage of its production with short and medium-term supply contracts. He also stated that the impact of rising energy prices globally, which weighs on production, shipping and import prices, has not appeared yet.

The CEO ascribed the delay in the completion of the chlorine production plant in Jubail to the COVID-19 pandemic, stressing that the plant is currently under trial operation in its various departments according to the plan developed by the manufacturer He expects the plant to start production in Q2 2022.

BCI posted a 9% rise year-on-year in net profit for 2021 to SAR 34.4 million, compared to SAR 31.5 million.