Prince Saud made this statement while presenting a report on the Royal Commission to Crown Prince Sultan, deputy premier and minister of defense and aviation, during a meeting in Riyadh.
He also highlighted the achievements of Saudi Basic Industries Corp. (SABIC), which has several high-tech petrochemical plants in the two industrial cities.
Prince Saud said SABIC's investments increased, its products won new markets and Saudization rate jumped during the last five years.
"The crown prince commended the contributions being made by employees in both the Royal Commission and SABIC to strengthen the two organizations," the Saudi Press Agency said.
Prince Saud, who was accompanied by Muhammad Al-Mady, deputy chairman and CEO of SABIC, said the industrial cities of Jubail and Yanbu, which accommodate large petrochemical plants, are the results of the Kingdom's strategic planning.
The Royal Commission currently contributes seven percent of the Kingdom's gross domestic product and 60 percent of the gross industrial product. The industrial cities of Jubail and Yanbu account for 70 percent of the Kingdom's industrial exports and 85 percent of nonoil exports.
Prince Saud, who is also chairman of SABIC's board of directors, praised the excellent corporate operating performance last year. He said 2009 saw a total production of 59 million tons, an increase of four percent over the previous year. Sales totaled 46 million tons for the same period, an increase of five percent.
"Net income for the 12 months ending on Dec. 31, 2009 totaled SR9.1 billion, as compared to SR22 billion for the same period in 2008, a decrease of 59 percent," the company said. Total income for the 12 months amounted to SR28.4 billion compared to SR48.1 billion for the same period in 2008.
Prince Saud explained that the decrease of net income in 2009 compared to the previous could be attributed to the sharp decline in the prices of most products, especially for the first half of the year, due to the global financial and economic crisis.
"As new production from SABIC's projects at Sharq, Yansab and our petrochemical complex in China come on-stream during 2010, this will add to total company production and sales going forward. Also, as the global economy improves during the year, we expect to see demand for our products improve," the prince said.
Prince Saud also noted that the company's cost structure continues to be an advantage. "The integration of SABIC's structure into a single global enterprise will offer even further cost advantages as the company leverages its strategic planning, supply chain management, and functional best practices across the global enterprise," he said.
According to a report issued by Alembic Global Advisors, an independent New York-based equity research firm, the Saudi petrochemical giant is set to achieve much stronger profit growth this year. Factors driving profits include production from new capacities as well as global GDP growth. The analysts forecast SABIC's 2010 net income at SR22 billion, compared with market consensus profit estimates of SR17 billion. "We believe that the consensus is neither fully factoring in the start-up of new facilities at SABIC in 2010/2011 nor assigning its earnings much benefit from an improvement in the global GDP picture," the analysts said.
