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|16 October, 2018

Saudi tensions could hit Swiss chemicals group Clariant - CEO

If there is a major trade disruption involving Saudi Arabia, Clariant will be affected and many others, said Clariant CEO

Image used for illustrative purpose. A view of the headquarters of Saudi Basic Industries Corp (SABIC) in Riyadh January 20, 2009.

Image used for illustrative purpose. A view of the headquarters of Saudi Basic Industries Corp (SABIC) in Riyadh January 20, 2009.

REUTERS/Fahad Shadeed

BASEL, Switzerland  - The new chief executive of Clariant, which has Saudi Basic Industries Corp (SABIC) as its anchor shareholder, said rising tensions surrounding the disappearance of a Saudi Arabian journalist could hit the Swiss speciality chemicals maker and its rivals.

"If there is a major trade disruption involving Saudi Arabia, Clariant will be affected and many others I may say even possibly more than Clariant will be affected," Ernesto Occhiello told reporters on Tuesday.

"If there is no trade disruption the competitive scenario will remain untouched. We will see," said Occhiello, who was head of specialities at SABIC before taking charge at Clariant on Tuesday.

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"I wouldn't consider the fact that Saudi Arabia is going through a lively few days in the media as having an impact on the ability of Clariant to compete with other parties."

Saudi Arabia's riyal rebounded against the U.S. dollar after CNN reported Riyadh was preparing to acknowledge the death of dissident journalist Jamal Khashoggi in a botched interrogation.

Clariant and 24.99 percent shareholder SABIC are merging their high-performance materials businesses, a move that will include the sale of some plastics and coatings activities. 

Occhiello is replacing Hariolf Kottmann, who is standing for election as chairman at an extraordinary general meeting on Tuesday at which the Saudi company has proposed four new directors to be elected to the 12-strong board.

Kottmann said SABIC could increase its stake, but had no plans to launch a full takeover of Clariant. "Officially SABIC three weeks ago announced they have no intention to go up to 100 percent and make a takeover," Kottmann said. "Nothing has changed."

(Reporting by John Revill; Editing by Michael Shields) ((John.Revill@thomsonreuters.com; +41 58306 7022; Reuters Messaging: john.revill.thomsonreuters.com@reuters.net))