SABIC in India - A new era of strategic partnership

Forbes, in 2012, listed Saudi Basic Industries (SABIC) as the 88th largest public company in the world. SABIC is the world's 2nd largest diversified chemicals company and boasts of having operations in over 40 countries around the world. SABIC has displayed rapid growth from its humble beginnings in 1976 to today becoming one of the world's largest integrated petrochemical companies.

The company was founded in 1976 and is headquartered in Riyadh, Saudi Arabia. The Saudi government holds 70 percent equity stake in SABIC and the remaining 30 percent is held by private investors in the Kingdom and other Gulf countries. SABIC manufactures chemicals, intermediates and industrial polymers. The company claims to be the world's largest producer of mono ethylene glycol, methyl tertiary butyl ether, polycarbonate, polyphenylene, polyetherimide and granular urea; the second largest producer of methanol; and third largest producer of polyethylene, polypropylene, polybutylene terephthalate and engineering plastics. SABIC owns 60 world-class plants, 1 Corporate Research & Innovation Center in Saudi Arabia, 12 Technology and Innovation Centers in Saudi Arabia, Netherlands, Spain, USA, South Korea and India, with two under construction in China and India. The company also has 4 Application Centers in Saudi Arabia, USA, South Korea and Japan. SABIC has shown strong financial performance in the recent years, with net profits of SR 25 billion on sales of SR 189 billion, and assets of SR 338 billion.

India, the world's third largest economy in terms of gross domestic product, has shared a strong economic relationship with the Kingdom of Saudi Arabia and SABIC has been playing an important role in promoting that relationship. In February 2010, Indian Prime Minister Manmohan Singh signed the 'Riyadh Declaration' and the two countries willed a mutually beneficial path of growth and development. The trade between the two countries stood at USD 43.8 billion in 2012-2013 and Saudi Arabia is the India's 4th largest trading partner. Saudi Arabia is also India's largest crude oil supplier and provides 19 percent of India's crude imports.

SABIC's association with India began in 1984 when it sent one of its first shipments of methanol. Later, SABIC India was established in 1994 and has been experiencing double digit growth ever since. Today SABIC has 11 offices in major cities of India such as New Delhi, Gurgaon, Mumbai, Bengaluru, Chennai and Pune, and hires over 550 employees. SABIC also has a manufacturing facility in Vadodara, Gujarat, that manufactures solid polycarbonate sheets used in the roofing industry. SABIC recently inaugurated a USD 100 million technology center in Bengaluru that employs over 300 research scientists, engineers and support staff. The company aims to increase the employee count at the facility to 600 over the next 12-18 months.

According to Prince Saud bin Abdullah bin Thenayan Al-Saud, the chairman of SABIC and the Royal Commission for Jubail and Yanbu, India is a rapidly developing nation and an important market for SABIC in Asia, which explains why SABIC has invested significantly in India. During a recent meeting between Indian Ambassador Hamid Ali Rao and Prince Saud, the SABIC chairman was informed about the investment opportunities in India in the petrochemical and infrastructure sectors. Prince Saud was also briefed on the upcoming projects in India that include the OpaL Petrochemical Complex in Gujarat, the petrochemical complex at Mangalore, Karnataka, IOCL's LNG Project at Ennore, Tamil Nadu, IOCL's petrochemical project at Paradip, Orissa, the Kochi Petrochemical Project of BPCL and other upcoming mega projects.

The Indian Union Minister of State for Chemicals & Fertilizers and Statistics & Programme Implemention, Srikant Kumar Jena has formally invited SABIC to invest in the upcoming Petroleum, Chemicals and Petrochemical Investment Regions (PCPIRs) in the Indian states of Tamil Nadu, Gujarat, Andhra Pradesh and Odisha and also to develop a mega plastic park in the country. In response, Mohamed H Al-Mady, SABIC's Vice-Chairman and Chief Executive Officer, said that the company is evaluating the various options and is even eyeing full-fledged manufacturing in India in line with the company's belief of having such facilities where it does substantial business.

SABIC aspires to become the preferred world leader in chemicals and the company's new strategy, SABIC 2025, aims at making the company more integrated, more differentiated and more global by developing competitive feedstock sources around the world, while growing its global presence with a focus on rapidly developing and emerging economies.

India and Saudi Arabia thus look to further strengthen their alliance through ventures that will serve the interests of both countries and contribute to building knowledge and innovation. Prince Saud said that Saudi Arabia believes India is a rapidly developing nation, where partnership and inclusive development is a priority. With its consumer spending estimated to reach USD 3.6 trillion by 2020, India has a promising future and holds the key for companies such as SABIC that aspire to become world leaders in the petrochemical business.

Key Milestones of SABIC in India
1984 – Sent its first methanol shipment from Ar-Razi to India
1994 – Established SABIC India Pvt. Ltd
1995 – Established Application Development Center in Gurgaon, Haryana, and obtained ISO9001 certification
1996 – Started sales of 2-Ethyl Hexanol and MTBE
1998 – Incorporation of SABIC Research & Technology Pvt. Ltd
2007 – Acquired GE Plastics, creating SABIC Innovative Plastics
2008 – Received an award for "Excellence in Telecom Equipment Manufacturing" by the Telecom Equipment Manufacturers Association (TEMA) from the Union Minister for Telecommunications
2009 – Started up SF&S Sheet Plant in Vadodara, Gujarat
2010 – Sent its first shipment of acetone to India. Started construction of a new SABIC Technology Center at Bengaluru, Karnataka
2011 – Announced investment in SABIC Technology Centre in Bengaluru
2012 – Completes acquisition of the 49% minority shareholdings previously held by its two India partners. SABIC now holds the entire issued share capital of SABIC India Pvt. Ltd
2013 – SABIC Technology Centre in Bengaluru fully operational on 15 July 2013

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ABOUT SABIC

Saudi Basic Industries Corporation (SABIC) is one of the world's leading manufacturers of chemicals, fertilizers, plastics and metals. We supply these materials to other companies, who use them to make the products on which the world has come to depend.

Ours is the largest and most reliably profitable public company in the Middle East. This success is the result of our focus on three things: investment in local partnerships, the best research and technology programs, and an ambitious global growth strategy.
As a result, SABIC's brand has become a guarantee of quality to its customers and shareholders alike.

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SABIC in India - A new era of strategic partnership

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