MANUFACTURING CAPITAL

Corporate Manufacturing at SABIC oversees all our plant operations and sites worldwide. In 2021, Corporate Manufacturing continued to strive for the highest levels of operational excellence and EHSS standards. The execution of our global manufacturing strategy enabled our manufacturing sites across the world to further build on their internal capabilities and develop the agility to mitigate the risks associated with our employees, equipment and processes while delivering business results – all under challenging conditions brought about by the pandemic. Manufacturing at SABIC has shown great resilience, plant reliability and integrity through the deployment of robust standards and process technologies, which have been supported by our talented and knowledgeable employees. Furthermore, our rigorous monitoring and reporting mechanisms ensured effective and disciplined strategy execution across geographical and cultural diversities.

ASSET PERFORMANCE

In 2021, our new Asset Performance Index, which measures the reliability and integrity of strategic initiatives and program implementation against actual asset performance, indicated a consistent improvement throughout 2021. The methodology underlying this index fosters alignment, engagement and improvement at all levels. In addition, several programs are being implemented to address the top manufacturing risks.

Asset performance is strengthened through technological innovation in line with international standards. SABIC has now implemented Advanced Process Control and Real-Time Optimization technologies, leading to improved reliability and variable cost in its plants. In 2021, Corporate Manufacturing led a number of initiatives aimed at improving asset reliability and availability, including development of best practices, publication of equipment strategies, conducting of maturity studies and implementation of state-of-the-art technology. In addition, we identified the most significant areas on which to focus our efforts for maximum asset integrity by introducing technology for the inspection, monitoring and maintenance of equipment.

OPERATIONS MANAGEMENT SYSTEM

The implementation of the Operation Management System (OMS) in 2021 established a consistent SABIC-wide foundation for a best-in- class standard for Operations Management. This included guidance on development of site systems and procedures. We also started site assessments using the new Integrated Manufacturing Excellence Assessment methodology, streamlining our assessment process and bringing greater efficiency in execution. It also improved the effectiveness of our impact measurement. Our journey to operational excellence continues and we look forward to seeing the results that will provide value in the years to come.

PROJECTS

Projects are integral to SABIC's growth initatives, innovation and sustainability where Corporate Manufacturing provides essential technical support to project management teams. In 2021, several SABIC expansion projects were executed by Manufacturing, assuring that asset life cycle management elements are embedded and addressed. Reliability is built-in during the design phase of all projects, as part of SABIC's continuous improvement. This includes determining optimal design parameters and reliability targets based on Life-Cycle Costing (LCC) principles.

WORKFORCE DEVELOPMENT

Our endeavors to achieve manufacturing excellence rely on the skills and commitment of our people; they are the most important ingredient in our success. In 2021, despite the challenges, we remained committed to implementing and assuring the sustainability of our people development programs.

The year began with the successful launch of a new portal on JADEER, a program initiated in collaboration with Corporate Human Resources to develop our frontline teams. Available to all employees, the portal is a valuable source of information about the JADEER program, providing an easy-to-access central depository of all frontline learning content that includes EHSS and Process Safety, Asset Management, Work Processes and Theory and Principles.

Through the effective implementation of the SABIC Engineers early Development (SEeD) program across our global sites, as well as our Technical Ladder, we continue to improve our development programs for graduate engineers. As part of employee development, we have also reinforced our efforts to embed the LEAN waste elimination concept within our operational DNA, deploying it globally, across all sites.

Other activities include 5S and Kaizen “continuous improvement” events facilitated by a Lean Six Sigma Master Black Belt to deliver immediate bottom-line improvements in reliability and cost effectiveness, as well as EHSS and process risk discovery.

In the longer term, we want to continue building a working environment that inspires and connects people through a global Community of Practice, providing access to a wealth of experience and for the effective sharing of ideas and best practices.

OPERATIONS DISCIPLINE

Operations Discipline is one of SABIC’s Operation Excellence initiatives. Launched in 2018, it aims to improve EHSS and reliability performance through the universal adoption of the Operating Discipline concept. The program assures compliance of critical operational elements during a manufacturing process and capitalizes on best operational practices. The implementation of the Operation Discipline Program at our sites in Saudi Arabia is continuing smoothly and according to plan, and the self-assessment of the sites in Europe and the United States began in 2021.

MAINTENANCE EXCELLENCE

Despite all the challenges of COVID-19, we met all our targets in 2021 for turnaround performance. We attribute this largely to the opportunity provided by Turnaround Management, an effective concept in Maintenance Excellence. As part of this value creation, our SABIC Turnaround Assurance team identified and developed initiatives to improve synergy, optimization and efficiency, where positive impact on the bottom line had already been realized.

STRATEGIC ALLIANCES

Corporate Manufacturing is spearheading effortsto formulate strategic alliances to identify clear value-creation opportunities with key industry conglomerates, focusing on asset safety,reliability, effective life-cycle management, and optimized services and operational cost. These alliances are expected to facilitate effective knowledge and technology transfers.

ENVIRONMENT, HEALTH, SAFETY AND SECURITY (EHSS)

Protecting the environment and maintaining high health, safety, and security standards at the workplace and surrounding communities are at the heart of our business. EHSS starts with stewardship – raising awareness among the stakeholders involved with our business and creating sustainable product life cycles, such as plastics recycling and resource recovery. Beyond compliance, we assess and manage risks and run system-wide safety initiatives. We aim for efficiency, whilst training and empowering our team members to recognize and address hazards.

GLOBAL KEY PERFORMANCE INDICATORS

We monitor the EHSS performance of all our assets globally through a series of carefully formulated, proactive, Key Performance Indicators (KPIs) that: drive performance and enhance visibility; ensure focus on key Safety, Health & Environment Management (SHEM) priorities; provide accountability; allow for internal and global EHSS benchmarking; identify and bring insight to address chronic issues; provide inputs for site SHEM audits; and provide a mechanism to identify sites that need additional support and attention.

RESPONSIBLE CARE® CERTIFICATION

In 2021, SABIC EHSS Corporate achieved recertification in Responsible Care® 14001:2015, (Including ISO 14001) at the corporate level, as well as, for all its sites. In Saudi Arabia, we also achieved certification in ISO 45001:2018, our first audit and certification of this standard. Through periodic auditing and re-certification, we are able to assure conformity with the best international EHSS standards of excellence, achieve our EHSS objectives, and meet regulatory and contractual requirements.

We won the following awards in 2021:

– Gulf Petrochemicals and Chemicals Association recognition as an Operation Clean Sweep® partner, having pledged to implement the OCS program to achieve zero plastic resin loss in Saudi Arabia.

– The European Chemical Industry Council Award (CEFIC) for SABIC’S certified Circular Polymers

– Responsible Care® Chairman’s Award for SABIC Asia Pacific

SHEM STANDARDS AUDITS

The SHEM Maturity Level concept is a new standard for risk-based assessment that is being embedded throughout our organization. It will supplement auditing as our primary means to assess sites’ SHEM performance and progress. During 2021, we successfully completed our targeted audits through a combination of in-person and virtual assessment using the new eSHEM SAP Auditing system.

EHSS INFORMATION ENABLEMENT

This year, the eSHEM Phase II initiatives project, which seeks to improve risk discovery and management, continued its global rollout with several modules enabled for improved identification, aggregation, and communication of key EHSS information. We implemented a smart database with an intelligent search capability that incorporates all EHSS resources globally. Optimizing resource utilization will enhance collaboration and improve visibility; enable faster and easier to access functional support; create opportunities for personal growth and development; and provide more efficient access to resources for assessments and audits. In 2021, we initiated the design of the EHSS Support Request System, which will be used alongside the intelligent database to facilitate information sharing and support for the sites.

EHSS CULTURE SURVEY

Building on the outcomes of the global EHSS Culture Survey conducted in 2020, we continued to enhance SABIC’s EHSS culture in 2021 through the Hearts and Minds Principles, which define critical organizational behaviors aimed at improving safety and operational performance. A key focus area has been leadership behavior to cultivate better leadership visibility and engagement.

EHSS TRAINING INVENTORY

As we strengthened collaboration with Saudi Aramco in 2021, we explored the requirements for internal safety training and resources at both companies. This initiative assessed the opportunity for sharing physical safety training resources, programs and facilities to optimize the overall training portfolio.

NEBOSH TRAINING

We conducted training sessions for the NEBOSH International General Certificate in Occupational Safety & Health to build the competencies of subject-matter experts at our affiliates in Saudi Arabia. In 2021, we successfully executed four competency development training programs for 50 participants as a part of the EHSS strategy execution.

REGULATORY ENGAGEMENT

This year, we also engaged with the regulatory authorities in Saudi Arabia and in Europe to review the new regulations from the Ministry of Environment, Water and Agriculture, the Royal Commission Environmental Regulations (RCER 2020), and the Europe Industrial Emissions Directive) to understand the industry’s challenges and to assess feasible alternatives.

PROCESS RISK MANAGEMENT

Continuing the journey towards Process Safety Excellence, the Global Process Risk Management (PRM) function maintained focus on its 2025 key strategic initiatives:

PROCESS SAFETY COMPETENCY AND TRAINING DEVELOPMENT

PRM continued to build Process Safety competency across the entire organization by developing and offering relevant Process Safety qualifications and training programs throughout 2021. Incorporated within the SABIC Process Safety competency framework, each program follows the continuous improvement approach to both content and delivery. Process Safety competency needs are also integrated into the OMS training. In response to COVID-19 challenges, PRM worked diligently with the competency program stakeholders to migrate all the face-to- face training to a virtual platform.

RISK DISCOVERY AND MANAGEMENT

In keeping with our 2025 EHSS strategy, we focused on Risk Discovery and Management Capability, and incorporated the improvement of SABIC Assurance for EHSS Risk (SAFER) structures and work processes. Effective monitoring of Process Safety performance is achieved through carefully formulated KPIs designed to drive improvement. PRM analyzed the historical performance of manufacturing sites and identified areas of EHSS focus. Accordingly, a Process Safety Maturity Index was developed to improve visibility and develop improvement remedies.

EMERGENCY PREPAREDNESS AND RESPONSE CAPABILITIES

In 2021, the SABIC Emergency Response and Fire Protection (ER&FP) function dedicated their efforts toward improving planning and readiness. Pre-Incident Planning (PIPs), covering major risk scenarios at manufacturing sites, was upgraded and emergency scenarios were rehearsed using the upgraded PIPs and relevant competencies as a basis. ER&FP also conducted a major off-site drill in collaboration with key stakeholders as part of SABIC Responsible Care’s commitment towards neighboring sites and community awareness and readiness.

SECURITY MANAGEMENT

SABIC is implementing a global security program that includes the development of JADEER Site Security Program for security guards. It is scheduled to go live in 2022. The program also focuses on driving security maturity through security risk assessments at all our locations. It involves improvements to the digital ID system, including unified contractor ID and 12-hour shift control, to reduce employee stress, and to comply with local regulations.

CRISIS MANAGEMENT

Crisis Management teams continue to respond to the COVID-19 pandemic and weather-related emergencies. Access controls were implemented at sites, to limit the possibilities of COVID-19 exposure. As travel gradually resumed, our regional and global security personnel worked with cross-functional groups on conducting global travel risk assessments. Our regional Crisis Management teams also conducted site-based and region-wide exercises focusing on both the pandemic and on cybersecurity. These exercises help raise awareness, ensure preparedness, and contribute to business continuity planning. We also set up a Global Crisis Management Network of senior managers from EHSS, Human Resources, Corporate Affairs and Legal Affairs who meet quarterly to discuss Crisis Management strategies, learn from one another’s experiences, and share best practices.