Tasnee has sufficient provisions, product prices surge in Q1 2021: CEO

Mutlaq Al- Morished, CEO of Tasnee

National Industrialization Co. (Tasnee) has sufficient provisions and will not allocate more provisions going forward, chief executive officer (CEO) Mutlaq Al- Morished told Argaam in an exclusive.

The bulk of Tasnee’s losses are attributed to allocating SAR 267 million provisions for the Titanium Sponge Project and the Jazan-based titanium slag smelter facility. Both projects incurred higher costs and weak demand amid the COVID-19 pandemic.

However, the company has solid cash flows, as it reduced debts from SAR 27 billion in 2015 to SAR 13 billion by the end of 2020, Al- Morished affirmed.

Moreover, petrochemicals product prices surged during the first quarter of 2021, he added, expecting to see more hikes. Prices are unlikely to drop below the Q1 2021 and Q4 2020 levels.

Tasnee is also in talks with the competent government authorities to provide more incentives and support, and help the company maintain its manufacturing projects of titanium value chain across the Kingdom.

Tasnee is likely to complete preparations for using sponge titanium in aviation and aerospace applications. It also started renovations at the ilmenite plant in Jazan.

A manufacturing workshop was also set up at site to produce the majority of the steel structures necessary for reducing any potential delays in the project schedule, which is expected to restart operations of the first furnace in the second half of 2021.

Tasnee narrowed its net loss after Zakat and tax to SAR 446.7 million for 2020, from SAR 1.676 billion a year earlier, Argaam reported.