RIYADH: Saudi Basic Industries Corporation (SABIC) will freeze all increments, promotions and bonuses for more than half of its 31,000-strong work force this year to maximize its cash flow in the light of the global financial crisis, Mohamed Al-Mady, SABIC’s chief executive, said yesterday.
This was the first public statement made by a top company that clearly shows the adverse impact of the global financial recession on Saudi companies in particular and on the Kingdom’s economic environment in general.
“Workers at SABIC Innovative Plastics and SABIC Europe will not be affected because they have already been subject to a similar move,” said Al-Mady. SABIC is one of the world’s top five largest petrochemical companies and the single largest producer and exporter of granular urea fertilizer on a global level. “The company looked at all costs and aimed to keep a maximum amount of cash flow,” Mady said.
SABIC this week topped the loser’s list, down 9.7 percent to SR40.20, in Saudi shares market. It is expected to be hit hard again as a global economic slowdown will translate into lower demand for petrochemicals.
Justin Powell Tuck, a media consultant with SABIC, refused comment on the management’s new move.
He, however, said the decision would affect about 20,000 SABIC employees in the Kingdom.
“I have nothing to add to what Chief Executive Al-Mady has said,” Tuck added.
