Sipchem to mothball 2 plants from January 1

Sahara International Petrochemical Co. (Sipchem) is planning to mothball the Polybutylene Terephthalate (PBT) plant, owned by its affiliate, Sipchem Chemical Co., and Ethylene Vinyl Acetate (EVA) Film plant that is owned by affiliate firm, Saudi Specialized Products Co.

Steps to implement the decision are underway, Sipchem said in a statement to Tadawul, adding that the suspension of both plants will start on Jan. 1, 2021, until further notice.

The company expects a positive financial impact starting from Q1 2021 results.

The move is in line with Sipchem's post-merger strategy to improve profitability and efficiency of operations, and ensure best levels of liquidity and stability, along with maintaining the integrity of the financial structure, considering the investment risks resulting from the current economic conditions and the challenges faced by the markets in general.

Sipchem PBT Plant is located in Jubail Industrial City, and EVA Film plant is located in Hail Industry City.

Sipchem will make announcement on updates and progress in a timely manner.

According to the data compiled by Argaam, Sipchem announced in January 2019 the commercial start of the ethylene vinyl acetate (EVA) film plant, by affiliate Saudi Specialized Products Company (Wahaj), with a production capacity of 4,000 metric tons.

Early July 2018, Sipchem Chemical Co., an affiliate of Sipchem, commenced commercial operations at its polybutylene terephthalate (PBT) plant in Jubail Industrial City.

The total production capacity of the plant is 63,000 metric tons per year.