Reuters reported that Saudi Basic Industries Corporation saw profits nearly erased in the fourth quarter due to the global slowdown, saying it would shut plants and cut jobs.

SABIC said in a statement that it made SAR 311 million in the 3 months to December 31st 2009, down over 95% from SAR 6.87 billion riyals in 2007.

Mr Mohamed al Mady CEO of SABIC said that cost cuts would involve layoffs but he did not specify how many.

SABIC results are a yardstick for other petrochemical majors such as Dow Chemical and Germany's BASF. BASF warned that a sharp slowdown in business in December 2008 and January 2009 would force it to step up cost cutting moves.

SABIC had earlier warned in November 2008 that a slowdown in demand for chemicals and a rapid decline in prices would weigh on its fourth quarter profit. It posted its first decline in profit in more than two years in the third quarter.

SABIC also said that it had suspended steel operations in Saudi Arabia and at a plastics plant in Spain.

SABIC produces liquid petrochemicals, plastics and is the Gulf region's largest steel producer.

(Sourced from Reuters)