SABIC CEO warns of overcapacity challenges in polymer sector

Abdulrahman Al-Fageeh, CEO and Executive Board Member of Saudi Basic Industries Corp. (SABIC), said the easing of monetary policies is aiding the recovery of the petrochemicals sector.

However, overcapacity continues to be a challenge, especially in the polymer sector, he added.

Ethylene demand growth remains slower than capacity growth, leading to sustained pressure on capacity utilization rates, Al-Fageeh said in the 2024 financial statement released today,Feb. 26.

Despite these market conditions, SABIC maintained stable earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, demonstrating its resilience amid difficult market conditions, the CEO noted.

The global GDP saw a slight improvement in Q4 2024, reaching 2.83%, despite the ongoing uncertainty in the macroeconomic landscape.

In addition, Al-Fageeh explained that the improvement in the Manufacturing Purchasing Managers' Index (PMI) signals economic stability after four months of contraction.

While these signs point to an economic recovery, interest rates remain a key factor in shaping the global financial outlook, he added.

The company remains strategically focused on enhancing sustainability and operational excellence as it navigates through the evolving market dynamics in 2025 and beyond, Al-Fageeh said.

The company maintained a disciplined approach to managing its capital investments, expecting expenditures to range between $3.5 billion and $4 billion in 2025.

SABIC expects the global GDP growth rate to reach 2.5% in 2025, as it continues to focus on maximizing long-term value creation through operational excellence, selective growth and value creation.

According to data available with Argaam, SABIC swung to a net profit of SAR 1.54 billion in 2024, against a net loss of SAR 2.77 billion a year earlier. The company incurred a SAR 1.89 billion loss in Q4 2024.