Saudi Basic Industries Corporation (SABIC) is the world’s second largest diversified chemical company and largest listed company in the Middle East. It is the largest traded company in Saudi Arabia, and employs over 40,000 people in 45 countries.
SABIC engages in the manufacturing of chemicals, plastics, fertilizers, and metals, and is affiliated with 17 additional subsidiaries and companies, including Hadeed. The company was founded in 1976 by King Khalid Al Saud, and is one of the pillars of Saudi industrialization policies and represents the Middle East’s largest, non-oil hydrocarbon-based industrial company.
Chemical production accounts for almost 60% of SABIC’s total production, and is the company’s largest business segment. For some products, SABIC’s world share stands at around 18–20%, and it is a credit to the Kingdom that this was achieved in fewer than 20 years’ time, literally created out of the desert. In 2014, SABIC recorded total assets of over $90 billion and $50 billion in annual revenue.
The Saudi Arabian government owns 70% of the company and private investors (from Saudi Arabia and other Persian Gulf countries) own the remaining 30% of shares that are actively traded on the Saudi stock market. To date, there has been no sign of further government sales of SABIC shares to the public, despite a cabinet approval in principle to sell three-quarters of its 70% share.
The success of SABIC’s share flotation and Saudi Arabia’s relative comparative advantage in petrochemical products has encouraged other private sector companies to enter the petrochemical field, and this would not have been done at the level of investment undertaken if the government had not partially privatized SABIC.