The Board of Directors of the Saudi Industrial Investment group is pleased to present the Annual Report for the fiscal year ending 31/12/2004.

 

 

I : Financial Results:

The attached report of the external auditor shows the financial status till the end of 31/12/2004. In a year that is considered to be one of the best years in the Petrochemical business. And especially to the company’s products, which was caused by two major factors:

 a.  An increase in the prices of crude oil which gave Saudi Producers a positive advantage.

  

 

 

 

 

 

 

 

 

 

b.  An improved global economy, particularly the Chinese one, which lead to an increase in demand for Petrochemical products. This can been seen in the following chart that shows the delta between Naphtha and Benzene (one of the companies products):

  

 

 

 

 

 

 

 

 

 

 

 

 

II : Company Projects:

 

1.  Saudi Chevron Phillips Company (SCP):

The company has worked at full capacity with no shut down for the entire year and prices have increased as is shown in the following chart:

 

 

 

 

 

 

 

 

 

 

 

 

 
 

This increase caused total sales to go up from (1,541)Million Saudi Riyal in 2003 to (2,467)Million Saudi Riyal in 2004. With a net profit of (1,129) Million SR compared with (420)Million SR in 2003.

 It is also important to note that the Petrochemical industry is a cyclical business, and 2004 is considered to be a peak in the cycle. It is also expected that the prices of our products will go down as the prices of crude oil decline and as the Chinese economy cools off. And possibly because the Tsunami disaster in Asia.

  

2.  Jubail Chevron Phillips Company (JCP):

During mid 2004 the major EPC contract for the construction of the Jubail Chevron Phillips Company Styrene/Propylene project was signed with JGC. The project is expected to be on stream in the third quarter of 2007.

 

3.  Third Project:

Based on Saudi Aramco’s allocation of enough Ethane and Propane, The Company has already started work on its third project. Which is expected to exceed 11 Billion SR ( 3 Billion USD) in cost. This project is scheduled for startup in 2010.

The Company will finance the initial phases from its own funds. In 2006 the Shareholders will be presented with the options for the remaining financing needed to complete the project.

 The following graph shows the expected increase in company's investments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition to its total investment value, the company’s increase in the number of primary products and derivatives will create the opportunity to consider more projects. The product growth is shown in the following graph: