BCI mulls option to reinvest Dammam plant, turnaround plan ‘on track’

Ala' Al Shaikh, CEO of BCI

Basic Chemical Industries Co. (BCI) is studying various options to reinvest Dammam plant, which will be a good opportunity for the company, Chief Executive Officer (CEO) Ala’ Al Shaikh told Argaam in an exclusive, adding that any developments will be duly announced.

Dammam plant currently produces 24,000 metric tons of chlorine and 27,000 tons of caustic soda annually. The plant’s production will be reduced if output rates at Jubail factory are maintained at nameplate capacity in a pace that ensures uninterrupted delivery or shortage of supplies to the company’s clients.

The Jubail factory will produce 50,000 metric tons of chlorine and 56,000 tons of caustic soda annually, almost double the current production capacity at Dammam project.

Commenting on the third-quarter results, Al Shaikh attributed the profit decline to an increase in raw materials prices, especially for other shareholders in BCI group, higher shipping costs, and increased provisions for some clients, in light of the management hedge plan.

The company analyzed an opportunity to acquire a stake in Union Chlorine Co., the CEO noted. Although it seemed attractive, the company decided to end talks and scrap the plan for many reasons, mainly due to the availability of other opportunities for expansion and investment, he explained.

BCI continues to study and explore several projects to diversify its income sources, in light of the previously-announced restructuring plan, the CEO said, expecting BCI Group’s agenda to have many initiatives in 2022 and 2023 inside and outside the company. These initiatives will be positively reflected on the returns of investors and shareholders in the medium and long term.

Elsewhere, Al Shaikh affirmed that BCI’s restructuring plan is currently on track. He expected its implementation to speed up in the first and second quarters of 2022, as new cadres were attracted to the company to work hand in hand with its highly-experienced professionals.

Al Shaikh also expected the product selling prices of the chlorine plant to see improvement, noting that there will be a challenge with respect to keeping these prices in tandem with the costs of shipping and raw materials of other shareholders in the group.

BCI posted a 13% drop year-on-year (YoY) in 9M 2021 net profit to SAR 39.2 million. The third-quarter net profit reached SAR 10.1 million, Argaam reported.