Saudi Fertilizers Co. (SAFCO), 42.9 percent owned by SABIC, and the chemical makers steel unit, Hadeed, had agreed in 2008 to build a steel plant with an annual capacity of 1.7 million metric tons.
Safco also said it would study the potential for a 1 million ton urea factory in Jubail, which is expected to start production by the second half of 2013.
“SAFCO announces that it has been decided not to proceed with the implementation of this agreement since the results of the final studies were not encouraging,” the firm said in a statement.
“Alternatively, SAFCO will carry out feasibility studies for the construction of a new plant (SAFCO 5) in its complex in Jubail, for the production of urea with an annual capacity of 1 million tons,” it said.
SAFCO announced its quarterly profit on Sunday, almost tripling their profits to SR1 billion ($266.7 million) on higher prices of petrochemical products. Shares in SAFCO closed at 170.8 riyals on Sunday while shares in SABIC, which is expected to post its fourth-quarter profits this week closed at SR110.8.
