Saudis Buying GE Plastics
May 18 2007
LONDON - General Electric is set to sell its plastics division to Saudi Basic Industries, Saudi Arabia's largest industrial firm, an official source told Forbes.com on Friday. GE Plastics had originally been expected to sell for around $10 billion, but reports say the unit could fetch as much as $11 billion. A source close to the situation would not confirm the transaction's value but said the deal would be announced Monday.
SABIC is one of the world's largest makers of polyethylene and polypropylene, materials that are heavily used in consumer products like plastic grocery bags, packaging and bottles. Its first-quarter profits jumped 50% to $1.7 billion, and it saw revenues of $23 billion last year.
The company is 70% owned by the Saudi government and 30% owned by private investors in the Middle East. One cost advantage it has over competitors like Shell Chemicals, Exxon Mobil Chemical and Basell Holdings is the relative ease with which it can get access to cheap and abundant supplies of oil and natural gas in the region.
Its close proximity to fast-growing China and India, where demand for industrial materials is booming, also gives it the upper hand on transport costs.
SABIC in acquiring GE Plastics is apparently setting the stage for more ties to China and India, and is investing in petro chemical and plastics industries there. This will set China up for the increasing use of plastics in automobile manufacture etc., while giving Saudi Arabia a means of using their main resource (oil) for manufacturing their own raw plastics.
This looks like a win win situation for Saudi Arabia and China, but not so good for the US. We will be paying more for oil and plastics both, while trying to put more energy effecient automobiles and trucks on the market. They have allready been invented many years ago, and our Corporate Government will be forced to put them on the market, but if we don't get on track, we'll be buying them from Japan and China.
Sabic plans $1bn China petrochem investment
19th May 2007
BEIJING: Saudi Basic Industries Corporation (Sabic), the world's largest petrochemical firm by market value, may invest just over $1 billion in a petrochemical plant in China, a senior industry source said yesterday.
The deal, likely to be finalised in days, will mark a breakthrough for international companies seeking a foothold in China's fast expanding petrochemical market as it comes at a time when Beijing appeared to be shifting to self-reliance in building the booming sector.
Under the pact Sabic would join its Chinese partner, state-run Sinopec Corporation in building a one million tonne a year naphtha cracker to produce ethylene, a key building block for petrochemicals, in the northern city of Tianjin, the source said.
Sabic would also own a 50 per cent stake in two production lines of polyethylene - raw material for plastics - and one mono ethylene glycol facility, an intermediate for chemical fibre, with total investment worth some $500 million, the source said.
From fuel tanks to wire harness and from instrument panels to exciting new molded windshields, virtually every current and developmental plastic component
for vehicles will be represented by technologies at
NPE 2006: The International Plastics Showcase.