RIYADH, 2 May — The Saudi Basic Industries Corporation (SABIC) has signed a three-year deal with South Korea’s Huvis to supply 200,000 tons of mono-ethylene glycol (MEG) annually, the company announced yesterday.
Muhammad H. Al-Mady, vice chairman and managing director of the Saudi Basic Industries Co., who signed the agreement in Seoul, said the deal would make Huvis one of SABIC’s largest international customers.
Ibrahim Al-Shuweir, president of SABIC’s Intermediates Group, also attended the signing ceremony at the Huvis headquarters.
The deal will make up more than half of Huvis’ MEG requirements, Al-Mady said in the statement. “In an environment of increasing global competition, the agreement would strengthen SABIC’s presence in Asia, particularly the Korean market,” he said.
Huvis, Korea’s largest manufacturer of polyster products, was created last year through the merger of the polyster divisions of SK Chemical Inc. and Samyang Corp. SABIC supplies 1.5 million tons of MEG to world markets through affiliates, Eastern Petrochemical Company (Sharq) and Saudi Yanbu Petrochemical Company (Yanpet), which have a combined production capacity of 2.3 million tons, both joint ventures with a Japanese consortium and US ExxonMobil.
Sharq and Yanpet, based in Jubail and Yanbu industrial cities respectively, have five production plants. Two more plants are under construction and will be on stream in 2004 and 2005.
SABIC’s profit in the first quarter of this year plunged 21.6 percent to $193 million from the same period last year, due to an increase in financing costs and a general decline in prices. It has a paid-up capital exceeding $4 billion and total assets of more than $21 billion, and operates 18 giant factories in Saudi Arabia.
