In 2018, Sipchem and Sahara Petrochemicals signed a merger agreement. The amount of the contract amounted to 2.2 billion dollars. Sipchem and Sahara Petrochemicals noted that the collaboration would bring profit in the region of 225 million riyals per year before taxes and increase competitiveness.
Companies expect the deal to change earnings for the better, reduce costs, and increase shareholder value. It is also predicted that the contract will benefit not only business partners but also individual shareholders.
Saleh Bahamdan, director of Sahara Petrochemicals Co, said the merger would create a leader in petrochemicals with improved integration into the industry and a more powerful competitive position not only in Saudi Arabia but also throughout the world.
The work of the new company will be aimed at creating a successful private petrochemical business in Saudi Arabia, which is consistent with the goals of a government project called Saudi Vision 2030. The merger is expected to have a positive effect on the combined business. For example, it will strengthen the portfolios of companies, diversify the supply of raw materials and production, expand the value chain.
If you correctly use the competitive advantages and special features of Sahara and Sipchem, you can significantly expand the scale and develop profitability in the petrochemical sector. The merger of these companies will provide many advantages in commercial, operational, and functional terms.
A company with in-depth financial capabilities, free access to capital, and vast experience in the production of petrochemical products will undoubtedly boost local and international economic growth.
In 2018, the company’s profit increased by 13%, which equals 500.8 million riyals. Sahara Petrochemical Co attributes revenue growth to increased earnings from subsidiaries Tasnee and Sahara Olefins, Sahara, and Maaden Petrochemicals. Operating income rose 15% to 557.8 million riyals, while earnings per share reached SAR 1.14.
The CEO of the company, Saleh bin Mohammed Bahamdan, noted that in 2018, Sahara Petrochemicals proved its movement in the right direction, which is in harmony with the strategic plans of the company.
In 2019, the profit of Sahara Petrochemicals Co increased by 1.78%, which corresponds to 142.7 million rials. A report, published by Sahara Petrochemicals Co, linked higher earnings with higher ethylene dichloride prices and lower raw material prices.