A s i a Pa c i f i c NEWS EDITION 23 JANUARY/FEBRUARY 2008 SABIC AND SINOPEC INSIDE CORP SIGN HEADS OF AGREEMENT TOWARDS 02 FORMATION OF Message 50:50 JOINT VENTURE TO 03 ESTABLISH China News ONE MILLION METRIC TONS PER 04-05 YEAR ETHYLENE SABIC IP Pacific DERIVATIVES Commercial Meeting COMPLEX IN TIANJIN SABIC Chairman Prince Saud shaking hands with Sinopec Corp Chairman Su Shulin after the HOA signing ceremony China Petroleum and Chemical 06-07 Corporation (Sinopec Corp.) and SABIC have signed a Heads of Agreement The Heads of Agreement was signed at a ceremony in Beijing by SABIC scale polyolefins complex for SABIC affiliate Yanbu National Petrochemicals SABIC IP Nansha plant (HOA) toward forming a joint venture Chairman, Prince Saud bin Abdullah bin Company in Yanbu, Saudi Arabia. company. Thenayan Al-Saud, and Sinopec Corp. Chairman, Su Shulin. “China is an important market for This 50:50 equal share joint venture SABIC’s global strategy. This Heads of 08 company will invest in a 1 million metric ton per year of ethylene Prince Saud noted: “The new joint venture with Sinopec Corp. will further Agreement is a key milestone towards realizing SABIC’s goal of establishing a Case study – Chongqing derivatives complex (600,000 metric strengthen the links between our two manufacturing centre in Asia. This Stadium tons of polyethylene and 400,000 companies. This will be SABIC’s first facility in Tianjin will serve customers in metric tons of Ethylene Glycol) to be set joint venture in China and we hope this the world’s fastest growing market, and up in Tianjin that will receive all its will lead to more joint ventures and a is an important component in SABIC’s strong relationship with Sinopec in the corporate strategy of being among the 09 ethylene feedstock from an ethylene cracker owned by Tianjin Petrochemical Company, a branch of Sinopec Corp. important China market.” world’s top petrochemical companies by 2020,” said Mohamed Al-Mady, Customer event The total investment will be around SABIC already has a strong relationship SABIC Vice Chairman and CEO. US$1.7 billion, with the complex with Sinopec Corp. and Chinese scheduled to be completed by engineers from Sinopec Corp. are 10-11 September 2009. currently helping to construct a world- News update 12 Corporate News Published by SABIC in Asia Pacific About Sinopec Corp midstream and downstream marketing refined oil products; and operations. The principal operations of producing and distributing chemical Sinopec Corp. and its subsidiaries products. Based on 2006 turnover, Visit our website at Sinopec Corp. is the first Chinese include: exploring, developing, Sinopec Corp. is the largest listed www.sabic.com company that has been listed in Hong producing and trading crude oil and company in China. The Company is the Kong, New York, London and Shanghai. natural gas; processing crude oil into largest crude oil and petrochemical The company is an integrated energy refined products; producing, trading, company in China and Asia. and chemical company with upstream, transporting, distributing and MESSAGE ASIA PACIFIC NEWS 02 With demand for polymers continuing to experience MESSAGE FROM ACTING double-digit growth in China, we foresee China as a GENERAL MANAGER, SABIC critical part of our portfolio and important component in our strategy of being among the ASIA PACIFIC world’s top petrochemicals companies by 2020. Dear Friends The year just past, 2007, was a very good year for SABIC. The company grew strongly, made excellent I would like to wish all our friends, customers, profits, and continued its rapid progress towards its colleagues and their families a Happy New Year and 2020 strategic goals. The acquisitions we have made also Gong Xi Fa Cai! strengthened SABIC in all regional markets and broadened our platforms for future organic growth. The signing of the Heads of Agreement towards the formation of a joint venture in Tianjin between SABIC In just a few years, our global workforce has grown and Sinopec is of extreme significance for us. This from 10,000 people to more than 30,000, with the marks the first step forward for SABIC in establishing formation of SABIC Innovative Plastics. SABIC is now a manufacturing site in Asia. This is indeed a huge truly a global company with a talented, highly achievement and we are excited about making this technically skilled and knowledgeable workforce joint venture a benchmark for our activities in China. capable of innovation and growth around the world. This joint venture will bring us even closer to our We all look forward to working closely with our valued customers. It will also enable us to serve our PE and customers, our colleagues, associates and partners - MEG customers better as we will have more products providing support and resources to one another, available for them when they need it. working in a cooperative and positive spirit, and moving toward our strategic objectives. The Asia-Pacific Region is now the most powerful With warmest regards engine of global economic growth and China is the Our successful partnerships will provide the most important part of the region. SABIC has been momentum for growth for many years to come, and Patrick Chan active here for more than two decades and we look here is wishing all of you a wonderful year 2008! Acting General Manager forward to many more decades of strong growth in China and in the region in general. for their exports by increasing domestic consumption ASIAN ECONOMIES TO and private and public investment. MAINTAIN MOMENTUM IN Vietnam was also able to sustain its growth through 2008 an increase in domestic demand, while Singapore successfully moved to high value-added export. Thailand’s economic growth weakened from 5.0 East Asia’s economic growth is expected to moderate percent in 2006 to 4.5 percent in 2007, as private to 7.7 percent in 2008, a slight decline from 8.4 domestic consumption and investment weakened percent in 2007, according to a United Nations amidst political uncertainties. Thailand’s GDP growth economic report released in December 2007. is expected to grow to 4.8 percent, assuming political uncertainty will dissipate. China, with its 11.4 percent Gross Domestic Product growth, has continued to lead economic expansion in the region through vigorous investment spending and rapid export growth in 2007. Government measures to Inflation has remained in check cool the booming Chinese economy and an expected across the region. Increasing deceleration of export demand is expected to trim import costs caused by rising GDP growth to 10.1 percent in 2008, says the World Economic Situation and Prospects 2008. international oil and food prices have been mitigated by Growth was also robust in other East Asian countries currency appreciation in most in spite of a more challenging external environment stemming from the slowdown of United States economies. Inflation in China economy and the significant appreciation of local nonetheless accelerated from currencies against the dollar and to a lesser extent 1.5 percent in 2006 to 4.9 also against the Chinese renminbi. The currency appreciation and reduced global demand, affected percent in 2007. exports of price-sensitive, labor-intensive manufacturing products, such as textiles and apparel and furniture, as well as of agricultural commodities. While East Asia economies are expected to remain strong, albeit at a relatively moderated GDP growth Many countries have taken measures to reduce their rate of 7.7 percent, the Report warns of possible dependency on fluctuations in world markets. Hong downside risks. The current sub-prime mortgage Kong, Indonesia, Malaysia, the Philippines and Taiwan market in the United States could cause problems for were able to ease the impact of weakening demand credit market and financial institutions in the regions. CHINA NEWS ASIA PACIFIC NEWS 03 PRINCE SAUD MEETS CHINA’S MINISTER OF COMMERCE IN BEIJING SABIC Chairman, Prince Saud bin Thenayan Al-Saud, met with China’s Minister of Commerce, Mr Chen Deming, in Beijing during His Highness’ recent visit to China. Prince Saud briefed Minister Chen on the recent signing of the Heads of Agreement toward the formation of a joint venture with SINOPEC for a one- million ton ethylene cracker in Tianjin. Minister Chen was delighted to be briefed on this development and congratulated Prince Saud on the wonderful achievement. Prince Saud also informed Minister Chen that SABIC is looking toward other opportunities to invest in China, which is SABIC’s largest overseas market. Prince Saud was also accompanied by SABIC Vice Chairman & CEO, Mr Mohamed Al-Mady, board members, several Vice Presidents and other senior personnel. On a separate occasion, Prince Saud and the VIP delegation also met with the Vice-Chairman of the National Development and Reform Commission (NDRC), Mr Zhang Guobao. NDRC studies and formulates strategies for national economic and social development and guides the overall economic system restructuring. Left to right: Mr Mohamed Al-Mady, Prince Saud and Mr Chen Deming, China’s Minister of Commerce Prince Saud meeting with NDRC Vice Chairman, Mr Zhang Guobao SABIC INNOVATIVE PLASTICS – PACIFIC COMMERCIAL MEETING SABIC CHAIRMAN OFFICIATES OPENING OF 2008 PACIFIC COMMERCIAL SUMMIT SABIC Chairman, Prince Saud Bin Thenayan Al-Saud, officially opened SABIC Innovative Plastics’ 2008 Pacific Commercial Summit in Shanghai, China. Prince Saud was accompanied by SABIC Vice Chairman & CEO, Mr. Mohamed Al-Mady, Board Members and other senior executives. The event, which was held on 29 January 2008, was attended by 650 SIP product and marketing personnel from Asia Pacific and the SIP leadership team led by Mr. Brian Gladden, CEO of SIP. In his speech, Prince Saud welcomed all 19,000 staff from SIP to the SABIC family, which is now 30,000 strong. Prince Saud said, “SABIC is very proud to have SABIC Innovative Plastics (SIP) and its 11,000 talented employees as members of the Company’s Global Team. SIP’s high performance polymers both complement and broaden our existing portfolio of polyolefins and other polymers. SIP offers a strong platform for continued growth and innovation that you have demonstrated so successfully in past years. Prince Saud giving the opening speech at the event The formation of SIP was a major strategic step for SABIC and moves the company forward in its goal to grow the specialty segment of our product offerings. Mr. Mohamed Al-Mady said, “We are expecting great Mr. Al-Mady also said, “Our goal for 2008, in a broad The result of a recent extensive strategic planning things from SIP and your culture of innovation and sense, is to build upon our collective existing and new exercise by SABIC established targets for the year growth. SIP’s products and its skilled workforce add a strength and to move forward with our growth 2020 of US$60 billion in revenue with some 18% - 19% totally new dimension and element of strength to agenda increasing our global market share”. coming from specialties. This growth is expected to be SABIC’s growth potential”. achieved by organic growth, additional acquisition and JV formations”. The VIP delegation at the opening ASIA PACIFIC NEWS 05 PRINCE SAUD PRESENTS AWARDS TO SABIC INNOVATIVE PLASTICS ASIA STAFF Prince Saud presented awards to product and marketing staff of SABIC Innovative Plastics in Asia who made outstanding contributions to the company. Prince Saud congratulated the SIP Asia personnel who achieved excellent results in meeting and exceeding their sales targets for 2007. The awards were given out at a gala dinner for 650 Asian personnel who attended the SIP Pacific Commercial Meeting. The event was also attended by SABIC Vice Chairman & CEO Mr Mohamed Al-Mady, SABIC board members, VPs and other senior personnel. Mr Brian Gladden, CEO of SABIC Innovative Plastics was also present. The staff from each SIP office in Asia Pacific also entertained the audience with cultural performances.The dress code of the event was national or traditional costume. Prince Saud and Mr Mohamed Al-Mady, SABIC Vice-Chairman and Mr Khaled Al-Mana, SABIC VP Intermediates, with SIP Japan staff other SABIC VIPs wore the traditional Chinese jacket which was much applauded by all staff. Mr Alan Leung, SIP Asia President & CEO, extending a SIP China team gave an rousing drum performance as the opening number warm welcome to all SIP Greater China outstanding achievers receiving their awards SIP South-east Asian team performed a cross-cultural dance sequence OFFICIAL OPENING OF SIP NANSHA FACILITY PRINCE SAUD OFFICIALLY OPENS SIP NANSHA COMPOUNDING FACILITY After officiating SIP’s Pacific Commercial Meeting in Shanghai, Prince Saud and the VIP delegation travelled to Guangzhou to attend the official opening of SIP’s Nansha compounding facility. The facility is located at Nansha, which is one hour away from Guangzhou by road. Whilst at the plant, Prince Saud presided over the official opening ceremony, which commenced with the ceremony of ‘dotting the lion’s eye’, tree- planting, gathering with the employees and a tour of the plant led by Ms Meggie Wang, GM of Manufacturing at the Nansha facility. The lion dance troupe welcomed the VIP delegation to the plant Prince Saud and Mr Mohamed Al-Mady officially opening the plant Prince Saud dotting the eye of the lion to symbolize good luck in the Chinese tradition Left to right: Ms Meggie Wang, GM Manufacturing Nansha; Mr Alan Leung, SIP Asia The symbolic tree-planting ceremony President & CEO; Mr Brian Gladden, SIP CEO; Mr Mohamed Al-Mady, SABIC Vice Chairman & CEO; Mr Abdulmohsin Al-Fares, SABIC Board Member and Prince Saud waving to the staff upon arrival at the plant ASIA PACIFIC NEWS 07 Prince Saud giving a speech to employees at the Nansha plant Ms Meggie Wang, GM Manufacturing Nansha bringing the VIPs on a tour of the facility The plant employees posing for a photo with the VIPs CASE STUDY ASIA PACIFIC NEWS 08 attractive to us as we could visualize its long-term leave the sheet virtually spotless. SABIC INNOVATIVE PLASTICS’ cost and maintenance benefits”, says Mr. Zhang Feng, LEXAN THERMOCLEAR EASY General Manager, Chongqing Urban Development Co. Ltd. Lexan Thermoclear Easy Clean sheet’s metallic grey color was created on special request of Chongqing CLEAN SHEET GLAZES THE Urban Development Co. Ltd. It was installed at the Most spectators at global sporting events demand a Chongqing stadium in 2004, a project managed by ROOFTOPS OF THE FIRST comfortable viewing experience in all types of the Chongqing Urban Development Co. Ltd. weather. One way of achieving this is by offering OLYMPIC STADIUM IN state-of-the-art facilities, which feature glazing on Furthermore, high-level light transmission and stadium roofs. weatherability enable the stadium roof to withstand CHONGQING, CHINA. long-term exposure to sunlight and harsh weather Lexan Thermoclear Easy Clean sheet is an excellent conditions. The patented technology of Lexan Thermoclear Easy candidate for stadium roof glazing due to its light Clean sheet was chosen by Chongqing Urban weight, multi-wall X-structure configuration, The stadium can be used as a reference for sporting Development Co. Ltd. for the roof glazing of the first providing superb stiffness, improved load stiffness, authorities in China, host country of the Beijing Olympic stadium in Chongqing, west China. With over and high impact strength compared to conventional Olympic Games in 2008. “Chongqing stadium is a 60,000 people to please over an area of around twin-wall products. showcase of SABIC Innovative Plastics’ commitment to 36,000 square meters, this comes as no surprise. supplying quality that meets customer expectations Lexan Thermoclear Easy Clean sheet needs minimal It may also provide customers with significant cost in the building and construction industry in Asia,” said cleaning, provides excellent light transmission, savings. Sanjiv Vasudeva, Pacific Pole Leader of Specialty Film delivers a high stiffness performance, and helps & Sheet for SABIC Innovative Plastics. “We’re proud protect spectators from changing weather conditions. The sheet incorporates SABIC Innovative Plastics’ that this may set an example for the future of Asia’s patented coating technology on its exterior surface, glazing industry.” to create self-cleaning properties when the sheet SABIC Innovative Plastics & comes into contact with water. Patented hydrophobic SABIC Innovative Plastics supports projects in China Chongqing Urban Development coating applied to Lexan Thermoclear sheet with the latest technology and materials, aiming to demonstrates reduced sheet surface tension. This in support the Olympic spirit of being swifter, higher, Co. Ltd. turn increases the contact angle of water to the sheet, and stronger. which typically ranges from 66 degrees for standard “The additional benefit from choosing this novel polycarbonate to 100 degrees for Easy Clean. The grade of Lexan* Thermoclear* sheet was particularly water that forms large droplets wash away dirt and The delegation consists of JAPAN DELEGATION VISIT TO Mr. Hajime Nakashima, Manager, Refinery Technology SABIC HQ Group, Refining & Technology Department, COSMO OIL CO., LTD. A delegation from Japan recently visited SABIC HQ Mr. Takashi Kinno, Corporate Planning Group Leader, and Petrokemya. The delegation included members Corporate Planning Department, KYOKUTO from RING, which is the “Research Association of PETROLEUM INDUSTRIES, LTD. Refinery Integration for Group-Operation”, Japan’s Mr. Kiichi Itoh, Senior Chief Scientist, Research & industry-wide refinery/petrochemical research Consulting Division Department A, MITSUBISHI organization under the leadership of the Ministry of CHEMICAL TECHNO-RESEARCH CORPORATION Economy, Trade and Industry (METI) of Japan, currently focusing on refinery/petrochemical The delegation discussed petrochemical feedstock integration related-development. Its members are diversification as well as briefed SABIC personnel on composed of representatives from major refinery and what RING has already achieved in the refinery and petrochemical integration area. The RING delegation members was hosted by Mr Ali Ali- petrochemical companies in Japan. Khuraimi, VP R&T (2nd from left) CUSTOMER EVENT ASIA PACIFIC NEWS 09 The Fertilizers team led by Regional Manager Ng Boon GOLFING IN BANGKOK Howe and Basic Chemicals team led by Regional Manager Lee Lam Lee, together with their staff The Fertilizers and Basic Chemicals Strategic Business attended the event to build closer rapport and Units hosted a golf tournament and a dinner relationship with their customers. reception for major customers in Bangkok at the end of 2007, to thank them for their wonderful support The golf tournament was won by Mr Manu from Chia over the years. Tai and the runners-up were also all from Chia Tai, Mr Yuwaroj and Mr Thepvit respectively. First runner up of the golf tournament, Mr Yuwaroj Mr Arjaf Al-Senan, Sales Manager Fertilizers presenting the champion trophy to Mr Manu from Chia Tai, with Mr Ng Second runner-up Mr Thepvit Boon Howe (center) looking on. The Fertilizers and Basic Chemicals Teams posing for a group photo with customers VIETNAM UPDATE A S I A PAC I F I C N E W S 10 from Asian countries such as Thailand, China and PLASTICS RAKE IN US$700 Singapore. MILLION IN REVENUES To reduce dependency on imported materials, the industry plans to produce 800,000 tons, or 30 percent Vietnam’s plastics export turnover reached US$700 of the total material needed for plastic production by million, a year-on-year increase of 46 percent, 2010. according to the Ministry of Industry and Trade. In the first 11 months of 2007, the country’s plastics By 2010, the industry hopes to earn US$1 billion export earned US$641 million, surpassing the year’s through the export of 4 million tons of plastics. target of US$600 million. However, it may be difficult to reach the target due to To reach the target, the sector focused on investment the nation’s lack of petrochemical industry – the main in developing plastic materials, high quality supplier of material for plastic production and the production and waste plastic processing, sector is yet to fully exploit waste plastic materials. Domestic producers are building modern factories The Vietnam Plastics Association said the US, Japan, and using alternative channels to source raw materials Switzerland, Norway, the UK, Germany and Cambodia for plastic goods production. were the biggest importers of the country’s plastic products including packaging, canvas and gloves According to the ministry, 90 percent of plastic materials for production are imported, particularly VIETNAM - THE NEXT FRONTIER FOR THE LOGISTICS INDUSTRY Vietnam now conveys the impression of being the next China, in terms of economic progress, investment potential and the dynamism of its people. However, if Vietnam hopes to replicate China's economic miracle, its logistics infrastructure will have to keep up with projected growth in manufacturing and international trade. Vietnam joined the ASEAN (Association of South East Asian Nations) in 1995 and the Bilateral Trade Agreement with the US in 2000 accelerated Vietnam's transformation into a manufacturing-based, export- oriented economy. In 2006, Vietnam became the WTO's (World Trade Organisation) 150th member. According to government figures, Vietnam's GDP growth was 8.5 percent in 2007, the second fastest in Asia (after China) and the fastest in Southeast Asia. What does this mean for the logistics industry? Vietnam is now firmly on the radar screen of international investors. Boosted by its WTO accession, FDI (foreign direct imports has also increased by an average of 20.5 India, the government alone will not be able to fund investment) in Vietnam rose by almost 40 percent to percent annually from 2000 to 2006, which is partly and build up infrastructure quickly enough to meet US$10.2 billion in 2006. due to MNCs bringing in more materials for the demands of the booming economy. manufacturing operations. Intel, 3M, Nike and Canon are some of the big names Under agreements reached during the negotiations moving in. Vietnam's consistent economic growth and At present, the roads and ports in Vietnam are for its WTO membership, Hanoi has agreed to allow political stability during the past 10 years have been becoming choked with cars and ships, with some key drivers in attracting such investors. The so-called reports suggesting that congestion is worse than in foreign businesses to establish joint ventures in "China plus one" strategy of MNCs (multinational China. The lack of air and ocean transportation transport, freight forwarding, and warehouse corporations) to reduce their excessive dependence networks, as well as warehouses and distribution services. After five to seven years, the ventures can be on China is another factor attracting FDI into Vietnam. facilities, is also hampering the growth of efficient converted into foreign-owned companies. logistics practices. For Vietnam, FDI has been akin to importing a ready- The development of Vietnam's logistics industry has made private sector, accelerating economic growth Additionally, most of the local logistics service the potential to considerably improve its and job creation. With the economy set to grow even providers have been operating for less than 10 years, competitiveness by reducing transport and inventory further, the logistics sector in Vietnam will have to with limited capital, coverage, service ranges and IT costs, and improving efficiency. Failure to develop the keep up or else production could shift elsewhere in capabilities. Many do not have representative offices logistics sector, however, could mean that Vietnam Asia. abroad. Hence, logistics costs have become a major may not attain its full economic potential, or worse, contributor to the cost of doing business in Vietnam. lose out to China or its Southeast Asian neighbors in The Economist Intelligence Unit (EIU) found that value the longer term. of Vietnam's exports grew at an average of 18.2 The government hopes to upgrade roads, seaports percent annually from 2000 to 2006. The value of and airports. However, as in the case with China and SINGAPORE UPDATE A S I A P A C I F I C N E W S 11 MARITIME INDUSTRY FORECAST TO GROW IN ASIA- PACIFIC REGION The Asia-Pacific region accounts for 42 per cent of the global market for maritime port operations and services with growth forecast to reach 44 per cent by 2010, a survey said. 'The main areas of growth in ports and terminals are expected in China, India and Korea,' said a report by Fusion Consulting Asia. The 42 per cent, or 43 billion US dollars, is expected to grow to 54 billion US dollars. Asia is also expected to be the main battleground for port supremacy, Fusion said. Singapore, Hong Kong and Shanghai are far ahead of the pack in terms of container traffic. The offshore and shipbuilding and repair sectors are also set for strong growth. The Asia-Pacific's share of the global market for offshore operations is 23 per cent, but likely to rise from 31 billion US dollars currently to 41 billion by 2010, the report said. It handled a record 27.9 million containers or twenty- foot equivalent units - up 13 percent from 2006. The Established repair yards in Singapore, Hong Kong and Singapore Registry of Ships grew by 13.8 percent to Korea are seen as expanding in China through joint reach 39.6 million gross tons as at end 2007. ventures. 'In the long run, the ship repair industry in Singapore is likely to be threatened by the rise of low- The registry of ships also grew by 13.9 percent to cost ship repair yards in China, India, Indonesia and reach 39.6 million tons at the end of 2007. The Vietnam,' the report said. number of international shipping groups operating in Singapore is pushing towards 100. Singapore retains busiest world In a recent World Bank study, Singapore was ranked port title the number one logistics hub out of 150 countries surveyed. The government is expanding the port Singapore handled a record 27.9 million containers capacity to meet growing demand, and PSA is last year, reinforcing its position as the world's busiest equipping all its new container berths with new super port. 2007 was a good year for the maritime sector as post panamax cranes to help with the increased a whole, but going forward, the industry is keeping an overflow. eye on issues related to manpower, environment and security. To stay ahead of the competition, the focus will be on meeting challenges in manpower, the environment The Singapore maritime sector achieved double-digit and security. There are also efforts taken to protect growth across the board last year. Despite intense the environment within the port waters, and to ensure competition from the likes of Hong Kong and the continued flow of goods in times of Shanghai, the port was able to hold its own. heightened threat. At Terminal 3, travellers and airport visitors will also annum to Changi Airport, bringing the airport’s total SINGAPORE CHANGI AIRPORT get to enjoy varied shopping and dining options from annual capability to about 70 million passenger TERMINAL 3 OPENS FOR over 100 retail shops and 40 food & beverage outlets. With the opening of Terminal 3, Singapore Airlines’ movements. Terminal 3 also adds another 28 aerobridge gates to Changi Airport. Among the 28 OPERATIONS long-haul flights will operate out of Terminal 3 and its aerobridge gates are eight gates that are designed to regional flights will operate out of Terminal 2. handle the A380 aircraft. Singapore Changi Airport’s new Terminal 3 commenced scheduled flight operations on 9 January Terminal 3 and its associated works cost S$1.75 2008. billion. It adds a capacity of 22 million passengers per Changi Airports International (CAI) has been selected world's largest airport in terms of airport land – ten SINGAPORE COMPANY as the preferred bidder to manage and operate the percent bigger than the size of Singapore. SELECTED AS PREFERRED King Fahd International Airport in Damman, Saudi Arabia. Negotiations are expected to be finalized in In the Middle East, CAI is currently involved in BIDDER TO MANAGE the next two months as the company was chosen by operating the Abu Dhabi International Airport. It has Saudi Arabia's General Administration of Civil also secured the masterplan contract to develop the DAMMAN AIRPORT IN SAUDI Aviation. King Hussein International Airport in Aqaba, Jordan. ARABIA The King Fahd International Airport is the gateway to the eastern province of Saudi Arabia and it is also the CORPORATE NEWS A S I A P A C I F I C N E W S 12 results of the fiscal year ending December 31, 2007, “The company’s net profits reported for the 4Q 2007 SABIC PROFITS FOR 2007 HIT the operating profits stood at USD10.9 billion amounted to USD1.83 billion compared to USD1.63 UNPRECEDENTED USD7.2 compared to USD8.2 billion in 2006, an increase of 32 percent. billion in the same period last year, an increase of 12 percent.” BILLION Prince Saud Ibn Abdullah Ibn Thenayan Al-Saud, The Prince lauded the efforts of the members of the SABIC reported profits for its operations during 2007, Chairman of SABIC said: “The increase in profits was in board as well as all SABIC and affiliates’ employees, amounting to USD7.2 billion, compared to USD5.4 parallel with an increase in profit per share to the collaboration of shareholders, customers and billion in 2006, an increase of 33 percent. These USD2.88 compared to USD2.16 last year. This increase suppliers. profits included SABIC Innovative Plastics’ results for occurred due to a 15 percent increase in sales and the the last 4 months of 2007. According to preliminary rise of global prices of key products.” Mr Mohamed Al-Mady said that SABIC is expecting great things from SABIC Innovative Plastics in the U.S. and the reduced prospects in the high As Prince Saud has stated, we are counting on a great A LOOK AHEAD income countries. performance from SIP. By Mr Mohamed Al-Mady, SABIC Vice-Chairman & CEO (extract of speech given at SABIC Innovative Plastics’ Pacific The Asia Pacific Region is expected to continue having We are expecting great things from SIP and your Commercial Meeting) strong growth but moderately less in 2008 than in culture of innovation and growth. SIP’s products and 2007. Some analysts suggest that China’s growth may its skilled workforce add a totally new dimension and The year 2007 was a very good year for SABIC overall have peaked in 2007 with a cooling of the global elements of strength to SABIC’s growth potential. and the wind was certainly at our back. expansion and a possible further tightening of monetary policy as well as some slowing in export When SABIC’s existing large polyolefins portfolio, However, the year 2008 promises to present some sales. primarily commodity, is added to SIP’s high significant challenges with the wind in our face. The performance polymers, SABIC now has a portfolio of U.S. has problems with high energy prices, diminished We do have our work cut out for us in 2008. The polymer offerings which has both breadth and depth credit availability and a collapsed housing sector. environment around the world will not be as – with further potential for growth in offerings and Goldman Sachs Investment Bank has forecast that the accommodating. Our goal for 2008, in a broad sense, market share. Certainly this puts us in a position to U.S. economy will be in recession during 2008. is to build upon our collective existing and new provide a broader array of polymer offerings to our strengths and to move forward with our growth customers around the world. On a broader outlook, the World Bank’s most recent agenda increasing our global market share. forecast calls for global growth to moderate to 3.3%, SABIC now has an incredible knowledge based within down from 3.6% in 2007. Fortunately the developing To do this we must move successfully to identify and its workforce and now it is our job to find ways to best economies are expected to have continuing good capture the synergies which exist between SABIC tap into this knowledge pool. growth, partially offsetting the poor growth prospects Innovative Plastics (SIP) and the remainder of SABIC.