JEDDAH: Saudi Basic Industries Corporation (SABIC) shut down its only facility in Japan after a devastating earthquake Friday, but the company's operations and sales are largely unaffected, Chief Executive Officer Mohamed Al Mady said Sunday. "We only have a small compounding unit, which we shut down and hopefully we will reopen soon" Al Mady said. "Hopefully, the earthquake will have a limited effect on Japan and the petrochemical industry as it happened in the north." He said Asian countries such as China and India were growth drivers despite the earthquake in Japan, while business in Europe was now slightly improving. "Asia is the biggest growth market for SABIC this year. It is stabilizing in Europe, Europe is the weakest market but I think it is improving," Mady said. "We are very optimistic (that) 2011 will be a good year if not better, in general it will be another good year. Prices are ... improving in Asia, America, Europe," Mady said. Mady added that around 70 percent of SABIC's products are exported, with the majority to Asia followed by the United States and other markets. He said a 260,000 tons-per-year (tpy) polycarbonate plant at a giant complex in Jubail and owned by SABIC's affiliate Saudi Kayan Petrochemicals will start production in the coming months. Plants at Kayan will come on stream this year and early next year, Mady reiterated. There are 16 plants at the complex which will have an annual production capacity of around 6 million tons of petrochemicals including ethylene, propylene and ethylene glycol. Al Mady said the current political turmoil in the Middle East and North Africa won't affect SABIC's earnings and operations. "We had political disturbances in the past like the Gulf war, Iraq and Iran wars, and we have managed to continue to produce and sell during those times. So our predictions for demand this year are still the same," he added. It is too early, however, to assess the effect of the possibility of the EU imposing tariffs against Saudi Arabia and Oman on material used in plastic bottles. The EU, which claims its producers may be affected by subsidies and price undercutting, opened probes into whether Saudi and Omani makers of polyethylene terephthalate (PET), get trade-distorting government aid and sell in the market below cost. "We always get hit by dumping fees and we always defend ourselves. This is still at an early stage," Al Mady said. In January, Al Mady said that SABIC will continue to boost capacities in coming years after output and sales rose in 2010, and the petrochemical giant continues to evaluate possible investment opportunities including in Latin America.
