Chemical Week • November 4/11 • Sabic CEO: Rationalization options include European exit

Sabic is considering multiple options as part of its ongoing global portfolio-optimization and asset-restructuring process, including a potential partial or full exit from Europe, said CEO Abdulrahman al-Fageeh during a third-quarter earnings call with analysts on Nov. 4.

“We continue to look into our assets in Europe […] a closure and rationalization of our footprint in Europe is one option, but there are many options,” he said. While the company will continue to optimize the performance of its European assets, as well as optimize its capital spend and fixed cash costs, Fageeh said there are “many options actually under review, including […] a partial exit or full exit.”

Stressing that these are, for now, just potential options, Fageeh said they are, however, “being reviewed by the management and potentially the board to draw and put color on the path going forward.”

Fageeh said, in response to a separate question on further potential plant closures by Sabic in Europe, that the company had already taken steps to rationalize its European footprint through the announcement earlier this year of the closure of its Olefins 3 naphtha cracker at Geleen, Netherlands. “I think this has eased our operation in Europe,” he said.

However, Sabic’s evaluation of Europe “is still ongoing,” he said. The company’s portfolio optimization includes “Europe, America and [Saudi Arabia]. We’re hoping that we will be able to share more information in the first quarter [of] 2025,” Fageeh said.

Sabic announced on Nov. 4 that it had returned to profit year over year in the third quarter of 2024 on improved revenue and polyolefin sales volumes, but said its long-term focus remained on “strategic portfolio optimization, restructuring of underperforming assets, and prioritizing sustainability and innovation.”

The company, which is 70% owned by Saudi Aramco, posted quarterly sales of 36.88 billion Saudi riyals ($9.83 billion), up 3% year over year and sequentially. Revenue beat analysts’ consensus estimate of 35.89 billion riyals, as provided by S&P Capital IQ. Net earnings of 1.0 billion riyals reversed from a net loss of 2.88 billion riyals in the year-earlier quarter but declined 54% compared with the previous quarter and missed the consensus of 1.42 billion riyals.

In the meantime, Sabic said it expects to restart its 865,000 metric tons per year steam cracker at Wilton, UK, in the near future after completing a major upgrade to convert the unit to a gas cracker.

An initial phase several years ago converted half the idled plant’s furnaces from cracking feedstock naphtha to cracking ethane, said Salah Mohammad al-Hareky, executive vice president/corporate finance, on the third-quarter earnings call. “Now we are going to complete the second phase of that to convert the total cracker into [a] gas cracker,” he said.

Sabic is currently transitioning to finalize preparations for the cracker’s safe startup, he said, without giving a date. The Wilton cracker has been idle since 2020.