Chemanol eyes new clients in Africa, South America

Methanol Chemicals Co. (Chemanol) is planning to target more clients in Africa and South America, board chairman Abdullah Al Sanea told Argaam in an exclusive on Thursday.

"The company exports products to 50 markets. Most of our sales, almost 37 percent, focused on the local market in 2018. Our sales in Asia reached 35 percent, the Middle East and Africa (23 percent), Australia, and Europe and America (5 percent)," Al Sanea said.

The board of directors has approved Chemanol's expansion and growth strategy going forward. The new plan will be announced later on.

For Chemanol's Q4 2018 performance, net profit declined quarter-on-quarter as global methanol prices dropped 50 percent between October and December 2018.

Average product selling prices jumped 20 percent year-on-year (YoY) in 2018, Al Sanea said, noting that Chemanol's selling prices are directly linked to prices of methanol – its main feedstock.

"Methanol prices are expected to rise in Q2 2019, after showing signs of recovery in March," he added.

The company has continued implementing its cost cutting plans that began in 2016, reducing expenses by 10 percent YoY in 2018 and by 27 percent since 2015.

The petrochemical producer is looking to have its 15 plants operating with maximum capacity after producing 696,000 metric tons last year with an 89 percent utilization rate.

The lower utilization rate was attributed to sulphonated naphthalene formaldehyde (SNF), which faces dumping risks in the Gulf region by Chinese and Russian producers.

Chemanol has filed an anti-dumping claim against those producers and is waiting for the results.

"Meanwhile, the company will suspend some plants in H1 2019 due to regular maintenance, but this is likely to have zero impact on its overall results," Al Sanea said.

"Chemanol is still in talks with the United States' Varsal Inc. to set up a dimethyl disulfide (DMDS) plant in Jubail Industrial City," he concluded.