Saudi Basic Industries Corporation (Sabic) will launch its maiden US$1bn corporate bond by early next year.
Mutlaq Hamad Al Morished, vice-president (finance), says that the bond would initially be launched for the local market. “We are also keen to get credit rating as part of the company’s initiative to enter the international market,” he adds.
Al Morished highlights the salient features of the Sabic’s expansion plans.
“There are significant opportunities for the lenders especially in the wake of the rapidly growing petrochemical industry. The GCC has become the best choice for investment in petrochemical industry,” he says.
“Investment in the petrochemical sector at end of 2002 stood at US$37bn with a projection of an additional US$40bn petrochemical investment by 2010. Hence, we are offering a significant opportunity for the lenders to participate in the petrochemical industry expansion.
“The rapid growth in the petrochemical sector offers Gulf states tremendous opportunities to diversify their economies and boost their export revenues. This also means that project finance markets for new and expanded petrochemical ventures in the Middle East are set for major expansion.
“The global petrochemical industry’s centre of gravity is moving towards best-cost areas that have ready access to the world’s high-growth markets. This makes the Middle East the centre of strong growth in this sector. The GCC, in particular, offer current and future feed stock price advantages, as well as strategic location to major trade routes to all of Asia.
“The GCC states also have an established industrial infrastructure, an educated and motivated workforce, and governments that actively encourage industrial expansion and foreign investments. Our region’s production facilities rival modern facilities anywhere in the world, including those in the west, or so-called developed nations.
“For many years now, petrochemical production from Sabic and other producers in the region, has exceeded local demand. Consequently, this surplus production is sold on the world market. Last year, more than 80% of the petrochemical exports from the GCC were shipped from Saudi Arabia.”