Sipchem CEO: SAMAPCO plant shutdown costs SAR 130M in Q4, positive market recovery signals ahead

Argaam

19-03-2025

Sahara International Petrochemical Co.'s (Sipchem) CEO Abdullah Al-Saadoon said that the maintenance work on the Sahara and Maaden Petrochemical Co. (SMAPCO) plant cost about SAR 30 million, adding that the impact on products was much greater, reaching SAR 100 million during the fourth quarter 2024.
In an interview with Al Arabiya TV, Al Saadoun indicated that the Q4 2024 results were affected by the one-month halt of the SMAPCO plant, in addition to impact from acquisition by associates, which had an impact of about SAR 57 million.
He added that 2024 was a challenging year, as product prices decreased by 8% YoY, and sales were affected by maintenance work at several plants.
Al-Saadoun also pointed out that there are positive indicators of market recovery due to the improvement in the prices of some products during 2025, despite the lack of clarity, indicating that some products began to rebound, such as methanol, whose price rose by 8%, and EPA, which increased by 4%, in addition to the improvement in polypropylene prices.
The shutdown of some plants in Asia and Europe may help rebalance supply and demand, which will reflect positively on prices, said the CEO, pointing out that the resolution of geopolitical crises in Europe and the region will positively impact the markets this year.
Regarding the new import tariffs between Europe and the US, he explained that Sipchem may become more competitive in the European market, which accounts for 22% of the company's sales, expecting prices to rise as a result of these developments.
Furthermore, ending the Red Sea crisis will positively affect the company, as shipping costs have increased by about 25-30%, which means that stabilizing the situation will reduce export costs, thus reflecting positively on prices and profitability.
Commenting on the decision to shut down the ethyl acetate plant, Al-Saadoun stressed that Sipchem continuously reviews the viability of its plants, especially those that see poor profitability, noting that the temporary closure came to minimize losses until market conditions improve.
He added that the company imports feedstock for vinyl acetate and ethanol, which witnessed a surge in their prices during 2024, making the continued operation of the plant economically unfeasible.
Regarding the petrochemical sector, Al-Saadoun pointed out that the sector goes through cycles of ups and downs, as is the case with other sectors, but remains one of the essential industries that are part of various aspects of life.
He emphasized that the importance of petrochemicals in providing sustainable economic solutions, which means that the demand for its products will continue in the medium and long term, stressing that Sipchem continues to invest strongly in the future of the petrochemical industry.
Sipchem posted a 64% drop in the 2024 net profit to SAR 426.1 million, compared to SAR 1.17 billion a year earlier. The fourth-quarter net earnings tumbled 88% to SAR 19.9 million from SAR 158.7 million in Q4 2023, according to Argaam 's data.