Sipchem mulls new investments in US, says CEO

Saudi International Petrochemical Co. (Sipchem) is studying new investments in the United States due to the availability of shale gas there, chief executive Ahmed Al-Ohali told Argaam on Sunday, speaking on the sidelines of the Saudi-US CEO Forum.

When asked about the status of Sipchem’s merger plans with Sahara Petrochemical Co., Al-Ohali said the two firms have not yet revived merger talks.

Sipchem and Sahara signed a memorandum of understanding in December 2013 to start due diligence in preparing for a merger. The plans were halted in mid-2014 because of regulatory difficulties.

However, there is still an opportunity for a merger with Sahara going forward, A-Ohali said.

“We’re still reviewing the draft regulations to evaluate potential mergers,” he added.

Earlier this year, Al-Ohali told CNBC Arabia that Sipchem would seek mergers once regulatory policies in the Kingdom improve.

Commenting on Q1 earnings, Al-Ohali said the company posted a good set of figures, backed by higher sales and better plant performance.

In addition, improved selling prices of some products, particularly methanol, in addition to cost efficiency initiatives also played a significant role.

Sipchem reported a net profit of SAR 91.7 million in Q1 2017, an 86.4 percent surge year-on-year (YoY).

The petrochemical firm saved nearly SAR 100 million in 2016 from restructuring and cost-cutting measures, Al-Ohali said.