A Kayan Petrochemical’s founder: Saudi Kayan is not a losing project and it added to SABIC’s revenues

Eng. Asaad Al-Ghamdi, one of the founders of "Kayan Petrochemical" - partner of "Saudi Kayan" with "SABIC" – denied "Saudi Kayan" being a losing project.

“ SABIC entered into this partnership only after ensuring the project’s feasibility where Saudi Kayan adds to SABIC’s revenues by the marketing fees, deducted from selling price, and research fees as well as mutual services fees”, said AL-Ghamdi.

Al- Ghamdi attributed Saudi Kayan’s losses to many factors including the proportional increase in feedstock (Butane) prices with oil prices, in addition to the decline in prices of some products below its production cost along with the marketing fees and other fees deducted from Kayan’s revenue.

He expects SABIC to follow the example of ARAMCO and Sumitomo Japan when they waived marketing fees for petroleum products and part of the marketing fees of petrochemical products from Petro-Rabigh, their affiliated company, which he thinks is a possible and practical solution to support Kayan.

Saudi Kayan was established in 2006 by SABIC and Kayan petrochemical with ownership interests of 35% and 20% respectively. In 2011 Kayan petrochemical’s board approved reducing capital from SAR 3.2b to SAR 5m through the distribution of Saudi Kayan’s shares amounting to SAR 3bn and the amount of SAR 200m to shareholders because they exceeded the company’s needs.