Reuters reported that Saudi Basic Industries plans to set up resin and engineering plastic compound factories in India and China.

Mr Mohammed Al Mady CEO of SABIC said that "There are no transport costs... and fixed production costs are much lower in China."

In May, SABIC announced a MoU with China Petroleum & Chemical Corporation to build a polycarbonate production plant with an annual capacity for 260 kilo tonnes. The plant will be operational by 2015.

The petrochemicals giant is also looking at opportunities to buy local companies. SABIC already owns a majority stake in Yanbu National Petrochemicals Company. The company made a record net profit of SAR 8.2 billion in the Q3 and says that its projects in China are profitable.

Mr Al Mady said that "SABIC's products in China are competitive and making good profits because of the rapid growth in petrochemical production in China over the last several years."

SABIC, 70% owned by the Saudi government benefits from access to cheap energy giving it a competitive advantage over global rivals such as US chemical giant Dow Chemical Company.

(Sourced from Reuters)