Bahrain’s GPIC posts $47.5mn profit

Manama / Tribune News Service

Bahrain-based Gulf Petrochemical Industries Company (GPIC) remained profitable last year despite the sharp decline in global prices and other market challenges, it has emerged.
The company, which is an equal stakes joint venture of Bahrain’s nogaholding, Saudi Basic Industries Corporation (Sabic) and the Petrochemical Industries Company (PIC) of Kuwait, uses locally available natural gas for the production of ammonia, granular urea and methanol – its sole products.
The GPIC annual report for 2015 shows that it achieved a net profit of $47.5 million last year on total sales of 1,091,139 tonnes, including 41,210 tonnes of ammonia, 414,805 tonnes of methanol and 635,124 tonnes of granular urea, of which 935 tonnes of bagged urea were sold in Bahrain. The company produced 404,000 tonnes of methanol, 51,000 tonnes of ammonia and 645,000 tonnes of urea. Profit last year was down to about a fourth of $190.2m posted in 2014.
GPIC president Dr Abdulrahman Jawahery said even though 2015 proved a very demanding year, with a paradigm shift in global fertiliser and petrochemical market dynamics, it managed to end the year in positive shape, both in terms of volumes of products exported to world markets and in achieving attractive netbacks on all its three products. Challenges faced by the company last year included increased gas prices in Bahrain and the dramatic decline in global
oil prices which not only impacted
the overall economic situation and life in general, but also resulted in a significant decline in petrochemical product prices.
“During 2015, global market activity showed mixed signs with the pace of growth remaining uneven across major economies around the world, influenced by the sharp decline in
oil prices and lower interest rates, affecting some countries like China which saw a slowdown in economic growth due to lower commodity prices,” he added.
“Also, in response to declining and relatively low crop prices, farmers were forced to reduce the area under cultivation for cereal crops.”
Likewise, said Dr Jawahery, the international oilseed, sugar, cotton and biofuel prices remained weak, which reflected in abundant supplies of all major crop commodities in international markets. Under these circumstances, fertiliser prices in general and urea prices in particular remained under pressure, he added.
Methanol being an energy substitute also could not fare much better with its demand failing to pick up and prices moving in a narrow range for most part of the year, recorded at their lowest since 2011. The US, once again, proved to be the biggest importer of GPIC products during the year, with nearly 421,623 tonnes, or 39pc share of the company’s total exports going there.
The US was followed by Brazil at 15pc and Taiwan at 11pc. The company said it has also enhanced and expanded its presence in new emerging markets like Turkey.
Last year, it was also able to realise its marketing goals and targets by effectively meeting customer expectations, mainly with regard to quality and timely delivery of products. This was also due to close co-operation with marketing partners, Sabic for methanol and PIC-Kuwait for ammonia and urea.
The flow of exports was smooth and continuous, with 1.1m tonnes
of products being shipped on board 57 ships. GPIC’s total product exports have exceeded 29.7m tonnes since its inception to last year’s end. They include nearly 6.5m tonnes of ammonia, 12.4m tonnes of methanol and 10.8m tonnes of urea.
Since 1985, a total of 12.6m tonnes of ammonia and 10.61m tonnes of methanol production was achieved by GPIC last December-end. Urea production since 1998, till last December-end was 12.64m tonnes. Also in 2015, the company completed successfully a comprehensive periodic turnaround of its plants and facilities, said the report.
Also, capacitor banks were installed for substations 1 and 2, increasing the power factor to 0.9, and resulting in a saving of BD100,000 per month in electricity bills.