PETROCHEMICALS

2019 continued to be another year of transformation for Petrochemicals, in line with SABIC’s overall global transformation process.

Production enhancements continue to boost efficiency and productivity while strengthening our sustainability commitment. New formulations offer better performance and ever-greater flexibility to our customers, helping them create new and improved products in every industry we support, from transportation to packaging to medical devices; new end products emerging from collaboration testify to the benefits of mutually beneficial commercial relationships in delivering solutions that truly meet consumers’ needs; delivery improvements continue to extend our ability to get product where it’s needed, when it’s needed, to ever more parts of the world.

Wherever we produce, innovate, partner and supply, we continue to deliver innovative products to meet the world’s growing needs ever better, and develop circular solutions to minimize any environmental impact.

Financial highlights

Revenue in 2019 was SAR 121.8 billion (including Specialties SBU), a decrease of SAR 28.6 billion, -19%, compared to SAR 150.4 billion in 2018. The decrease was attributed to a drop in overall average selling price.

Income from operations was SAR 13.8 billion (including Specialties SBU), a decrease of SAR 19.9 billion, -59%, compared to SAR 33.7 billion in 2018. The decrease was also attributable to lower average selling prices in addition to the recording of SAR 2.8 billion impairment provision in Ibn Rushd. SABIC’s share amounted to SAR 1.3 billion.

OPERATING HIGHLIGHTS

PROCESS OPTIMIZATION,SUSTAINABILITY SOLUTIONS

- Model Based Production Planning and Optimization - SABIC this year continued to work on turning our established olefins crackers production planning process into a world-class solution built on stateof- the-art technology that is expected to contribute to achieving our strategic growth objectives.

The Model Based Production Planning and Optimization (MBPPO) initiative, based on value-driven planning, encompasses a site-wide planning-optimization model covering feedstock selection, product mix, and plant conversion. The design’s modular architecture enables plant/global cross-fertilization, with affiliates’ individual planning models feeding into the evolving global corporate model, and vice versa, enabling comprehensive optimization, and ultimately maximization of overall gross margins.

Further advancements this year include:

– Chemical recycling for feedstock – we are investing in infrastructure and equipment that upgrades pyrolysis oil made from post-consumer mixed plastic waste into a suitable feedstock for our European crackers, which will be extended gradually to our other global assets. We are the first in the industry committed to scale up chemical recycling of mixed plastic waste to the original polymer – thus playing a leading role globally in turning plastic waste into feedstock and helping grow circular economy solutions. Under our TRUCIRCLE™ sustainability-focused product portfolio launched in 2019, we have developed advanced circular products from chemically recycled plastic waste to enable the circular re-use and recycling of packaging.

– Glycols plants – targeting 25% reduction in GHG, energy, and water intensities and 50% in material effectiveness by 2025, compared with 2010 baselines, with projects across glycols plants. These projects will eventually lead to an improved glycols asset footprint toward fulfilling our 2025 strategy.

IMPROVED PRODUCTS

Low Density Polyethylene (LDPE ) antioxidant-free additive
SABIC LDPE antioxidant-free additive is a safe and sustainable solution for the food packaging industry, offering compliance with certain food regulations while boosting SABIC’s social responsibility credentials.

Expanding polypropylene (PP ) portfolio
PP5271K is a high crystallinity polypropylene homopolymer grade developed for in-line and off-line thermoforming applications, which scores very high for stiffness, clarity, heat distortion temperature, dimensional stability, processability and fast molding cycle. A high stiffness Biaxially Oriented Polypropylene film grade PP 5212P for label application was developed which helps enable downgauging and supports the recyclability of packaging to meet circular economy goals with improved performance in stiffness, toughness, balance, barrier properties and hot fill requirement.

Expanding our pipe portfolio
SABIC launched a new anti-abrasive polyolefins compound pipe grade, a new polyolefin compound pipe grade, SABIC® P1600A, for slurry transportation for mining industries, offering significant anti-abrasion advantages over conventional materials such as steel, ceramic, and regular polyethylene, enabling significantly lower maintenance and extended service life. SABIC also this year launched PE100 – Orange – a new HDPE pressure pipe grade for city gas pipe networks.

First certified renewable Benzene for polycarbonate production
SABIC’s Geleen plant delivered the world’s first certified renewable Benzene from renewable cracker feedstocks. SABIC also launched the ISCC+ (International Sustainability and Carbon Certification plus) certified value chain for phenol and polycarbonate. The new material reduces both fossil feedstock use and CO2 emissions, and exemplifies the benefits of cooperation between our Benzene & derivatives and polycarbonate businesses.

Cooperating for cleaner marine fuel
We signed a Memorandum of Understanding with Billion Miles (Singapore) Pte. Ltd. (BM) to verify emission reductions resulting from a switch from diesel to methanol, in response to the International Maritime Organization’s anticipated new regulations banning marine fuels with a sulfur content above 0.5%. SABIC’s role in the venture, which is endorsed and co-funded by the Maritime and Port Authority of Singapore, involves supplying methanol fuel and related expertise, while BM develops the technology and executes the shipboard trials.

Innovative materials for better packaging
SABIC’s new LLDPE BX202 polymer for producing biaxially oriented polyethylene films on tenterframe lines supports recyclability by using mono-material PE structures in multilayer films. The new film also offers very good printability and mechanical properties including toughness, has exceptional sealing integrity to prevent leakage and waste, and is available as certified circular and certified renewable polymer. COHERE™ S Series polyolefin plastomer, produced using NEXLENE™ technology, offers excellent heat-sealing properties, clarity, toughness and elasticity, for integrity during transportation and storage.

Personal care
SABIC launched new grades of glycerin-refined grade for skin care, hair care and shaving gel applications, building our presence in this large and healthy global market.

Innovative automotive solutions
The faces of next-generation vehicles are changing. Front panels will replace traditional grilles and come with new aesthetic and functional requirements. To help drive development, we are collaborating with a worldwide leader in thin film technology, and other partners on innovative surface designs for this emerging application space. This is just another example of SABIC’s efforts to help our customers prepare for and shape the future of automotive design.

BETTER APPLICATIONS

Better for water packaging
SABIC’s Nexlene products offer alternative solutions to non-sustainable water bottles by eliminating a washing step during re-filling. SABIC’s double water pouch solution combines high performance, high purity and reduced washing water requirements.

Breakthrough material for Powder Bed Fusion technology
SABIC has developed first ever high temperature polyester-based MATEENSINT™ powder for Powder Bed Fusion technology, such as selective laser sintering. The material offers superior thermal, chemical and mechanical properties, expanding the space for 3D printed applications. To exemplify our strong commitment to sustainability, the beta version of MATEENSINT™ powder has higher recyclability compared to the solution available in the market enabling the potential for manufacturing cost waste reduction. By working with industry partners, SABIC can ensure that its powder material addresses industry and application requirements.

Polyolefin-based solar panel
After two years of joint development with partner Solarge, lightweight polypropylene-based solar panels were installed on office buildings in the Netherlands. The system contains a UV stabilized PP random cover film and a stiff PP sandwich panel, with the potential to incorporate recycled material. Besides, the excellent environmental stress crack resistance of solar panels made from another common polyolefin, SABIC’s B1054 high density polyethylene, makes them a long-service life solution, enabling floating solar fields to be built on lakes, enabling power generation with no loss of land resources.

Non-Financial Metrics

LOOKING AHEAD

With the launch of two new hubs in Asia Pacific in 2019, Greater China and Rest of Asia, we look forward to responding to local demands with ease and flexibility, responding rapidly to market volatilities, and further deepening our collaborative partnerships with customers and other stakeholders in this key marketplace.

Across our regions, we will continue to focus on better serving our customers through innovative thinking, and enhanced production and process control. We will continue to pursue our objectives and work toward SABIC’s vision: to be the preferred world leader in chemicals.