Sumitomo Chemical sees finance approval for Rabigh II in early 2014

Updated 28 November 2013
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Sumitomo Chemical sees finance approval for Rabigh II in early 2014

TOKYO: Sumitomo Chemical Co. Ltd. expects to win project finance approval for the $7 billion expansion of a petrochemical project in Saudi Arabia in the first half of 2014 despite a series of problems at the existing complex, its president said.
“The Rabigh II plan is on track with an aim to start operation in 2016. The total investment plan of $7 billion is unchanged,” Sumitomo Chemical President Masakazu Tokura told a news conference.
PetroRabigh, which runs the complex on the Red Sea coast of Saudi Arabia, has annual output capacity of 18 million tons of refined products and 2.4 million tons of petrochemicals. PetroRabigh is a petrochemical joint venture between Japan’s Sumitomo Chemical And Saudi Aramco.
The parent companies agreed last year to go ahead with a $7 billion expansion of the Rabigh project in the Kingdom, but the financing details have not been disclosed.
“We are in negotiations with financial institutions on the project finance for Rabigh II. We expect to get an approval in the first half of next year,” Tokura said.
“Until the project finance is ready, parents companies will be providing money needed to proceed with the Rabigh II project,” he said.
Tokura said part of the construction for the second phase of the project had already begun.
Under Rabigh II, an existing ethane cracker will be expanded and a new aromatics complex will be built using around 3 million tons per year of naphtha to make higher-value petrochemical products.
The two parent companies will make a planned capital injection of about 100 billion yen ($986.19 million) each in PetroRabigh either next year or in 2015, Tokura said. There have been repeated problems with its first phase operation.
PetroRabigh said in October it had started to bring its ethane cracker back into operation after fixing a water leak. That followed a power outage which forced it to shut operations in September.
PetroRabigh shut its complex for about 20 days of maintenance at the start of this year after power and steam supplies were cut temporarily.


HSBC plans more China tech jobs in push for market share

Updated 14 sec ago
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HSBC plans more China tech jobs in push for market share

  • Europe’s biggest bank by assets will boost headcount at its technology centers in Guangzhou, Shanghai and Xi’an by 14 percent
  • HSBC’s expansion plan in China comes amid growing use of technology in the financial sector — from payments to transactions
HONG KONG: HSBC plans to add more than 1,000 jobs this year at its technology development centers in China, as the Asia-focused lender seeks to bolster its presence in the world’s second largest economy.
Europe’s biggest bank by assets will boost headcount at its technology centers in Guangzhou, Shanghai and Xi’an by 14 percent from a current 7,000-strong workforce, said HSBC Chief Information Officer Darryl West.
In recent years the London-based bank has spent $3 billion annually on its group technology operations which employ 40,000 people worldwide, and West said annual investments of $3-$3.5 billion are planned over the next few years.
Many global banks set up low-cost hubs in China and India more than a decade ago to maintain their complex worldwide information technology networks, but these centers have now become a core part of their operations.
The centers develop and implement risk and fraud management technologies, as well as digital applications that make it easier for banks to attract customers and deliver faster and more secure services.
HSBC’s expansion plan in China, a key market for the bank, comes amid growing use of technology in the financial sector — from payments to transactions.
At stake is a bigger share of the billions of dollars worth of retail and corporate banking business in a major financial market with a growing customer base.
“There is a lot more we can do with technology in mainland China. The level of technology adoption and innovation in China is way ahead of other markets,” West told reporters during a tour of HSBC’s technology center in the southern city of Guangzhou last week.
“We see mainland China as a tremendous source of talent, not just for the local market but our technology operations globally. We are hiring very aggressively here,” he added.
About 30 percent of the work done at the Guangzhou center, the largest HSBC tech facility in China with more than 5,000 employees, is for the mainland market and that share is expected to grow over the next couple of years.
HSBC is also using China-based tech centers to develop banking products for its global network, such as the bank’s UK mobile app which was developed in the northwestern city of Xi’an.
Outside China, HSBC employs more than 10,000 people at technology centers in India, with the rest in countries such as Britain, Canada, Hong Kong and the United States.
HSBC has in recent years lifted investment in China, including the prosperous southern Pearl River Delta region. Mainland China and Hong Kong together accounted for nearly 40 percent of the bank’s revenue in 2018.
The bank will invest $15-$17 billion in the next three years in areas including technology and China, its Chief Executive John Flint said last year.
The limited physical presence of foreign banks in China compared to dominant domestic rivals has been a challenge.
HSBC’s losses in retail banking and wealth management (RBWM) in mainland China widened to $200 million last year from $44 million in 2017. The bank aimed to reverse that with its investments in technology.
“Things like that, we see as very important for the next phase of our business growth ... once the major investments have gone in, RBWM will grow bigger and also profitable,” said HSBC Greater China Chief Executive Helen Wong.