SABIC EXPANDING PETROCHEMICAL MARKETING

Saudi Basic Industries Corp. (Sabic) is accelerating its marketing capability to meet a rapidly expanding slate of plastics resins and other petrochemical products in the 1990s.

Included are new foreign affiliates, quality control steps, added overseas storage facilities, and joint ventures for shipping.

The Saudi state petrochemical company has emerged as a major player in world petrochemical markets since its creation in 1976 (OGJ, Jan. 7, p. 19).

NEW SERVICES, FACILITIES

Sabic Marketing Ltd. (SML) and affiliate Sabic Marketing Services Ltd. (SMSL) have launched new services and facilities to handle planned expansions of Sabic's product line. They include establishing wholly owned, full service affiliates overseas, creating a new fertilizer marketing affiliate, and setting up quality control laboratories.

SML formed four wholly owned foreign affiliates providing the full range of services, including sales and marketing, market research, and financial arrangements for shipping:

Sabic Marketing Europe Ltd., established in 1989 in London, serves the European Community as well as the rest of Europe.
Sabic Marketing Americas, established in 1988 in Stamford, Conn., serves North, Central, and South America for all Sabic products.
Sabic Marketing Asia Ltd. and Sabic Marketing Far East/Southeast Asia Ltd. will first act as SML's representatives in, respectively, China and other Pacific basin markets. Eventually they will serve all of Asia, including the Indian subcontinent, and the rest of the Pacific basin. Both affiliates, established in 1990, are based in Hong Kong.

Meanwhile, SMSL has established an office in Tokyo that largely monitors the Japanese market and provides information on Sabic to potential customers.

SML also is increasing sales and marketing staff in Saudi Arabia. Sabic has established a new company, Sabic Fertilizer Marketing Ltd., to handle established products prilled urea and ammonia and new products granular urea and compound and liquid fertilizers.

QUALITY CONTROL

SML's technical services teams provide quality control of products at a new laboratory in Riyadh.

Technical services specialists, working with customers using plastic resins, chemicals, or fertilizers, handle customer feedback on or help develop new applications for Sabic products.

Part of the Sabic industrial complex for research and development, the lab performs physical tests on customers' plastic products and processing tests of plastic resins. It also has standard processing machinery to duplicate customers' processing procedures.

After the complex is complete in 1991, the laboratory will be able to perform tests on Sabic products as well. Included in the complex will be two pilot polyethylene plants where Sabic R&D specialists will develop and test new polyethylene grades.

The R&D complex will:

Have demonstration plants for key processes in Sabic operations and various research laboratories equipped with advanced equipment to support manufacturing and marketing functions.
Provide the capability to simulate worldscale plant processes for improved efficiency.
Supply market testing product volumes for product application development.
Provide hands on operator training.
Serve as a focal point for a corporate technical skill center to maintain and increase competitiveness of Sabic operations.

In addition, Sabic is instituting statistical process control procedures to receive International Standards Organization 9000 series certification. Once this is attained for all polyethylene production by about 1992, other plants will undertake ISO 9000 certification.

At the same time, SML is implementing a 2 year total quality management program to make administrative procedures more efficient and error free.

In the first 2 months of the program, SML has streamlined its procedures for handling customer feedback and standardizing and streamlining internal communications.

SHIPPING VENTURES

SML has reached two joint venture agreements covering shipping and marketing with two other Middle East companies to provide customers with additional options in shipping and trade.

SML is a 20% partner in National Chemical Carrier Ltd. (NCC), a shipping line that owns nine stainless steel lined tankers. The first NCC shipment, a cargo of methanol from Al-Jubail to Europe, was shipped on the NCC Al-Baha tanker last June. The other partner is National Shipping Company of Saudi Arabia (Nscsa).

The NCC tankers total about 250,000 dwt and are operated by their original owner, Stoli of Norway, under a pool agreement to participate in transporting Sabic liquid products.

NCC will provide extra shipping capacity when more products come on stream the next few years.

"We will maintain our good relations with other shipping companies," said SML Pres. Abdullah Nojaidi. "We already use most shipping lines calling at Saudi Arabian ports, providing service to all points. With the large amount of product we export, there will be no reason to change this."

Six shipping companies have contracts to carry Sabic liquid products worldwide, and about 25 companies carry dry products. Sabic shipped about 3.5 million metric tons of liquids and gases in 1989.

Two Sabic manufacturing affiliates have time chartered ships to carry liquid chemical products, also operated by Nscsa. The 41,500 dwt Al-Farabi carries shipments between Al-Jubail and Japan. The 42,000 dwt Uqba Ibn Nafi carries shipments between Al-Jubail and Rotterdam.

An undisclosed foreign partner has time chartered a third ship, the 33,000-dwt Kozumaru, for other Al-Jubail-Japan shipments.

Sabic also has become a 20% joint venture partner in Tunisia Saudi Trading Co., formed to promote and develop trade between Saudi Arabia and Tunisia by financing standard trade or identifying and arranging countertrade possibilities and transactions.

This will help serve the small, but rapidly growing, North African market, Sabic said.

STORAGE, SHIPPING

Sabic products are stored at eight overseas terminals which, in conjunction with overseas marketing affiliates, allow faster shipments to customers in high traffic markets. Dry products are stored in Marseilles, Meer, Belgium, Hong Kong, England, and Tunisia.

Liquid products are stored at Rotterdam, Singapore, Ulsan, South Korea, Jakarta, Jabal Ali, U.A.E., Bayonne, N.J., and Houston.

By land, 23,000 trucks from seven transport companies were used in 1989. Of that number, two companies shipped Sabic products outside Saudi Arabia and the remainder shipped domestically.

In addition, three European trucking firms were used for shipments within Europe, as well as most customer countries' train networks.

SML is seeking arrangements with more shipping firms serving Persian Gulf ports, Nojaidi said, especially those interested in shipping liquid chemicals, gas, and fertilizers.

"We'll be happy to cooperate with any shipping line serving Saudi Arabia or any chemical tankers interested in export cargo," he said.