BCI’s Jubail plant currently at 80% production capacity, says CEO

The plant serves more than 350 local customers, in addition to neighboring countries such as Bahrain, Kuwait, the UAE and Oman, Al-Shaikh said.

He added that BCI is working with the manufacturer of the plant to speed up access to the design production capacity and obtain an operating warranty certificate in late August 2022, according to the current workflow.

Commenting on the company’s H1 2022 financial results, Al-Shaikh said the group’s wholly owned subsidiaries recorded sales growth of 13% year-on-year (YoY) and an operating profit increase of 89% YoY. This was driven by the rise in sales value and volume.

The total sales and operating profit of mixed companies grew YoY by 47% and 25%, respectively, in H1 2022, the CEO said, adding that these companies faced pressure on profitability due to high prices of raw materials and continued rise in freight rates compared to last year, especially as such firms import several raw materials.

The supply chain crisis impacted the basic chemicals unit slightly, but largely affected the mixed companies. Such firms saw a decline in freight and raw material prices, the top executive said.

“We expect stability or a continued slight decline in prices during the remaining period of 2022 unless energy prices increase,” he noted Commenting on product prices, Al-Shaikh said there would be pressures on prices, which the company will work to reduce the impact by increasing the quantities sold. Jubail plant will have the greatest impact in restructuring the operational costs of the basic chemicals unit, due to the start of calculating the plant’s new depreciation costs amid higher sales.

As for Dammam plant’s investment plans, the CEO said the focus in the current period and the next two months is on ensuring production at Jubail plant and operating it at the optimal capacity. He expects to start studying Dammam plant’s investment plans in September or October 2022.

BCI’s land in Dammam is an industrial complex spanning 200,000 square meters (sq m), which is owned by the company and is registered as one of its accounting assets. It includes the chlorine plant that was suspended, in addition to other facilities such as the ferric chloride and contract manufacturing plants, as well as the factories of foreign investment companies (mixed companies), the company's warehouses and headquarters.

The halt of the chlorine plant’s operations does not mean moving all the other factories or vacating the land, Al-Shaikh said.

He indicated that the chlorine and its derivatives is used in several industries, such as oil extraction, refineries, and chemical plants, whether they are used as basic materials in the manufacturing of the end product, like the PVC, or as secondary materials in the maintenance of corporate facilities.

The products are used in the production of detergents, disinfectants, medicines, water desalination, adhesives and dyes, the CEO said, adding that it is noted that reliance on this industry increases when secondary and value-added industries increase, due to the multiplicity and complexity of its use.

BCI reported a net profit after Zakat and tax of SAR 30.5 million for the first half of 2022, an increase of 98% from SAR 15.4 million in the same period a year earlier, according to data available with Argaam.