Saudi chemical major eyes India

Saudi Basic Industries Corporation (SABIC), the world’s largest chemical company by market value, is looking at setting up shop in India. The state-controlled firm, with nearly US$120 billion of market capitalization, is looking for an Indian partner to jointly build an ethylene and other chemical-products plant by 2007 in the country. The move is part of SABIC’s strategy to hike its capacity by 50% between 2009 and 2015. The growth rate of the petrochemical industry is about 12% and domestic demand currently outstrips supply. Total domestic production is about 2.7 million tons, with Reliance Industries being the largest player, while demand is at 2.8 million tons. SABIC, which is targeting production of 51 million tons of chemicals and steel this year, has a two-pronged strategy to hike its total capacity to 100 million tons by 2015. The company has also lined up acquisitions of companies in Europe and the U.S. It recently bought the European operations of Huntsman Corporation for US$700 million. SABIC is also in discussions with China’s Dalian Shide and China Petroleum and Petrochemical for entering the Chinese market. (December 28, 2006)