FUTURE PLANS AND INVESTMENT

DRIVING GROWTH

Both organic and inorganic, we are working to build an asset footprint in the US to capitalize on shale gas opportunities, to build our presence in Asia and Europe, and to leverage our strength in Saudi Arabia for growth and Vision 2030. We plan to leverage and reinforce our local infrastructure and capabilities in support of its growth ambitions in China.

We will continue to work toward profitable longterm growth by investing in our people and safe and reliable operations, while at the same time, maintaining strong capex discipline. We are making short-term adjustments and prioritizing our strategic initiatives to mitigate the impact of the pandemic, but we remain fully focused on realizing our vision.

We are strengthening our relationships with our customers through our operations in 50 countries. We have established an extensive network of regional offices and operational centers throughout the Americas, Europe, the Middle East, Africa and Asia to support customer needs. We have a strong presence in key regions where demand is strong, with proximity to future growth markets as well. With our strategic geographic positions and market-driven focus, we are well positioned to support our customers to grow their business with our differentiated offerings and innovative solutions.

IMPROVING BUSINESS PORTFOLIO

In 2020, as part of our global polyethylene (PE) and polypropylene (PP) product growth strategy, we acquired Albemarle’s share in the Saudi Organometallic Chemicals Company, making us self-sufficient in aluminum alkyls triethylaluminum catalysts, and taking us one step closer to our ultimate goal: a complete PE/PP production chain.

We also integrated our Agri-Nutrient production under one umbrella – a move that is expected to generate synergies and provide focus and agility to enable us to maintain our competitive edge globally. Our product portfolio is being actively diversified, reflecting ever more fragmented, specialized customer needs, and the pricing premiums available for those who meet them.

Our plans for Specialties as a standalone business reflect its strategic importance, as we plan to move toward a multisector industry profile. Organically, the business will continue to explore new growth opportunities in fast-growing and disruptive end-markets. The standalone model is expected to bring additional value to our customers who depend on our Specialties business for its innovation expertise and highly differentiated solutions.

In a challenging competitive environment, SABIC Europe engages constantly in making business improvements, working closely with major OEMs and specifiers to better exploit technology and drive innovation, in compliance with stringent regulations and sustainability targets. We are playing a leading role in addressing the challenges of climate change, and have developed circular solutions with chemically recycled mixed plastic waste.

LEVERAGING INNOVATION

Innovation is key to maintaining a competitive edge, achieving growth and driving success. We work closely with each business unit or operating function to improve existing processes and products as well as developing new ones, often working closely with our customers to do so.

In addition, as part of our research efforts, we collaborate with Saudi Aramco in advancing crude oil-to-chemicals technologies, other companies, universities and international research centers. This usually involves a joint initiation, funding, supervision and completion of the research, followed by a sharing of intellectual property rights. We are currently working with over 350 partners across the globe and major partnerships are in place in the US, The Netherlands, China, Saudi Arabia and India.

ENERGY-EFFICIENT MANUFACTURING

Our Energy Efficiency and Carbon Management (EECM) team developed an overall roadmap for the energy efficiency portfolio. They engaged with all stakeholders to consolidate the efforts of SABIC affiliates for energy initiatives. This resulted in a comprehensive, consolidated target roadmap to comply with SEEC second cycle, which prioritized the portfolio projects list to 54 projects, carrying a cost of US$ 1.9 billion. These are at an advanced stage and are the highest energy-saving projects for closing the gap. In addition, EECM has also brought in game changers and high-energy saving initiatives such as Cogeneration & Renewable projects. The initial list, which had 144 projects, is part of the assessment and prioritization process, initially estimated to cost US$ 4 billion, with foreseen challenges to close the second cycle gap.

The roadmap includes possible synergy between SABIC affiliates’ projects to create several scenarios to invest in the most lucrative initiatives through utilizing the Credit Transfer Mechanism. This mechanism is important especially for those who are in a deficit position and face financial or technical challenges to achieve the savings target by themselves. It will be help them avoid stringent consequences and cover their own gaps at lesser cost. Furthermore, it encourages those sites who have already achieved their target to propose projects, as they will be rewarded for whatever credit they make available to others to cover their deficit.

INVESTMENT

SABIC continued to develop and expand its businesses under its ambitious long-term strategy. This includes a number of expansion and development projects, as well as signing of a number of strategic agreements.

The projects are split between Saudi Arabia and Rest of World and classified between growth projects, corporate research, corporate social responsibility, efficiency/debottlenecking/ improvement, sustainability/SEEC, research center, regional hub, training facility and for housing.

The following is a summary of the key projects and agreements:

We continue to launch new projects at our global sites. They include signing of a number of strategic agreements to enhance our competitiveness in line with our strategy, especially in the diversification of feedstock sources from traditional ones. Among these projects and agreements are: