BCI mulls 40% production ramp-up at Jubail plant: CEO

Ala’ Al-Shaikh, CEO of Basic Chemical Industries Co. (BCI)

Basic Chemical Industries Co.’s (BCI) board of directors assigned the executive team to complete a feasibility study for the first expansion of the Jubail plant, according to CEO Ala’ Al-Shaikh.

The move aims to boost production by 40%, Al-Shaikh told Argaam in a phone interview, noting that a report will be submitted to the board for a final decision during the third quarter of this year.

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Al-Shaikh added that the company aims, through this expansion as a second phase at the Jubail plant, to position itself as a key supplier in the Kingdom and the region for chlorine products, while enabling downstream and specialist chemical industries through reliable supply chains.

Commenting on the financial results, BCI’s profit growth was backed by improved profit margins of the basic chemicals unit from Jubail’s chlorine plant. It also witnessed a reduction in financing costs (FCs) after transferring the commercial loan to the Saudi Industrial Development Fund (SIDF) in December 2023.

During the first half, the company focused on diversifying sales volume to boost profitability, especially in the Jubail plant’s basic chemicals unit, which included chlorine, caustic soda, hydrochloric acid, and hypochlorite, in addition to sulfuric acid in the Yanbu plant.

Al-Shaikh assured that BCI periodically monitors prices and updates its strategy. Accordingly, operating profit improved in the first six months of 2024, supported by the company’s transition to the new SAP management system last January.

In Q2 2024, demand for basic chemical products stabilized with a slight price improvement, while adhesives and polyurethane products witnessed lower prices.

The company's clear seasonal factors are represented by Ramadan and the holidays in the first half of this year, where there was some slowdown in demand, and this is compensated for in the following months.

The CEO stated that product prices enhanced in H1 2024 compared to H1 2023, expecting prices to stabilize during Q3 2024 with a slight improvement in the sales volume and profit margins.

According to data compiled by Argaam, BCI reported a net profit of SAR 2.5 million in H1 2024, against a loss of SAR 6.9 million (after minority interest) a year earlier. The company logged earnings of SAR 2.3 million in Q2 2024, against losses of SAR 2.88 million in the year-ago period.