BCI eyes new markets, chlorine project to reach nameplate capacity within weeks: CEO

Basic Chemical Industries Co. (BCI) sells its products across the Kingdom and is currently eying new markets in the neighboring countries, based on product types, chief executive officer (CEO) Ala’ Al-Shaikh told Argaam in a telephone interview.

BCI is mulling to enter some markets in the Middle East, and north and east Africa, which represent good expansion opportunities, Al-Shaikh added, noting that there is fierce competition among manufacturers in China and India for these markets.

Commenting on Q1 2021 performance, the CEO said the profit decline was attributed to lower sales of chemicals and refining products and chemicals used in regular maintenance at factories, which usually do not recur at the same times every year. Moreover, the company wrote down some assets on site.

The chlorine industry and its derivatives face challenges to balance derivatives and sales for every product, Al-Shaikh explained, noting that an increase or decrease in any product affects the production of other derivatives that are used in various sectors and industries such as oil exploration, detergents, and plastics.

Al-Shaikh also expects price fluctuations to continue, due to global challenges faced by supply chains and price pressures, as most local and regional producers resumed production amid ample stocks of some derivatives in the medium term.

If there are no additional pressures on supply chains, prices are likely to stabilize in the third or fourth quarter of the year, the CEO noted.

BCI is currently mapping out a three-year strategy that has three parallel approaches. It will focus on administrative restructuring, attracting new competencies to all departments, the operation of the Jubail Industrial City factory and its enterprise resource planning (ERP) project in the first approach during 2021 and 2022.

In the second approach, BCI will focus on activating its product expansion plans through gaining a higher market share and targeting new markets. In the last approach, the company will study some expansion opportunities through new partnerships with regional and global investors.

BCI is working on all approaches in parallel and will disclose further developments in due course, the CEO added.

Moreover, the company’s chlorine derivatives plant in Jubail Industrial City will produce chlorine gas, all grades of caustic soda, hydrochloric acid, chlorine and sodium hypochlorite, Al-Shaikh said, expecting the facility to reach the nameplate capacity within a few weeks from the commencement of operations.

The plant’s nameplate capacity will reach 50,000 metric tons of chlorine and 56,000 tons of caustic soda annually in the first phase, almost double the current production capacity in the Dammam plant.

Meanwhile, production capacity could be boosted by additional 20,000 tons of chlorine and caustic soda annually with relatively marginal investments, as most of the plant’s departments and equipment were designed and implemented, with the second phase taken into account.

The plant witnessed several modifications and some equipment were added in line with the operational requirements, which were not initially included in the preliminary estimated cost, such as the safety and control system, as well as some infrastructure requirements, Al-Shaikh concluded.

BCI reported a net profit after Zakat and tax of SAR 8.8 million for the first quarter of 2021, a fall of 16%, from SAR 10.5 million in the year-earlier period.