Sipchem profit falls as Saudi petrochemical sector feels pandemic pain

Net profit retreated to SR175.9 million ($46.9 million) in 2020, from SR299.5 million a year earlier, the company said in a filing to the Tadawul stock exchange.

The pandemic has involved mixed fortunes for Mideast petrochemical giants with the use of plastic packaging rising in some markets as a result of the growth of e-commerce but with consumer demand dropping in many other markets hit hard by job losses.

Surging requirements for plastic visors in the health care sector has helped demand for some petrochemical products like polypropylene.

However Sipchem said that its own production of polypropylene had fallen because of an “unplanned shutdown and turnaround maintenance.”

The petrochemical company also recorded an impairment loss of SR280 million last year which related to International Diol Company and its EVA Films plant.

Global petrochemical companies are also being impacted by a consumer backlash against plastic packaging in many developed markets.

That is encouraging the industry to promote more sustainable business models and products.