Sipchem achieves synergy targets ahead of schedule by realizing SR 298 mln in 2021

Sahara International Petrochemical Company (Sipchem) has completed a successful delivery among all dimensions through a focus on the accuracy of planning and efficiency of execution, business continuity and rigorous post-merger integration measures, which enabled it to increase the synergy value to Saudi Riyals 298 million in 2021, significantly exceeding three-year targets ahead of schedule.

This is a remarkable achievement relative to other historical business combinations in the chemicals and petrochemicals industry globally.

In 2019, Sahara International Petrochemical Company “Sipchem” committed to delivering a synergy value of Saudi Riyals 175-225 million in recurring EBITDA impact within three years based upon a robust strategic rationale comprising the following:

1. a) Strengthening portfolio and value chain presence
2. b) Increasing scale and resilience of operations
3. c) Building on competitive advantages and capabilities
4. d) Increasing efficiency and productivity
5. e) Creating a solid platform for growth

During this period, Sipchem’s preventive maintenance practices and optimization were enhanced. In addition, Sipchem built on its enhanced marketing capabilities and its strong presence in the global markets through its offices in Europe and Asia to achieve the largest added value for its products.

Sipchem also launched targeted efforts, after the merger, to renegotiate major contracts i.e., maintenance, shipping and logistics, loan facilities, etc., with its vendors and financial institutions to drive procurement and cost savings delivery.

Lastly, Sipchem also underwent a full portfolio strategy refresh whereby the long-term attractiveness of the products was assessed from a market perspective.