The EQUATE Petrochemical Company, Kuwait's first international petrochemical joint-venture, announced realizing a net profit of USD 1.04 billion for the fiscal year ending 31 December 2014, in comparison to USD 1.245 billion achieved in 2013.
"Taking into consideration that 2014 was filled with challenges and developments, these results are extremely positive with the net profit exceeding USD 1 billion, as well as the company having an excellent financial position as certified by globally accredited organizations," EQUATE President and CEO Mohammad Husain said in a press statement Wednesday.
"In addition, several milestones were achieved, including continuous sustainability at all levels relevant to the company. Reaching such accomplishments was made possible through our human resources, especially nationals, who have realized several world-class achievements as recognized by all local and international entities." He pointed out that in 2014 a number of serious challenges faced the hydrocarbon industry as a whole, including the petrochemical sector.
"For example, the drop of oil prices in global markets by over 40 percent within a three-month timeframe, shortage of feedstock required for the petrochemical industry while being at a hike for most of the year, fluctuating international prices, increasing demand despite drop in prices, as well as not having opportunities for growth and expansion," Husain explained.
"As for developments, which are truly major highlights in EQUATE's history, they included our one-month Turnaround (TA) for our ethylene, polyethylene, ethylene glycol and utilities units. In addition, we finished the first phase of our polyethylene debottlenecking project to increase the current production capacity from 825,000 metric tons annually (MTA) to almost 1 million MTA." Husain added that EQUATE has set a new world record in maintaining and updating petrochemical plants by finalizing the TA and debottlenecking project within 30 days.
"With that said, we must take into consideration that those 30 days did not witnesses any sales or commercial operations relevant to products. At the same time, there were extraordinary costs that had their share from net profits in order to execute the TA and relevant operations to guarantee overall sustainability as per international standards. Based on that, the company dealt with 2014 on the basis on being an 11-month year while meeting the commitments of 12 months," he said. Husain stated that other developments at EQUATE included a total sales value of over USD 2.6 billion, and enhancing its presence in several markets by enforcing its customer-base, both locally and globally.
"EQUATE has contributed to the growth of the local plastics industry by over 400 percent from 1998 to 2014, and has supported Kuwaiti producers of plastics to launch export operations of their products to several countries around the world," he clarified.
"Moreover, the company has introduced several sustainability-based initiatives within and outside Kuwait by establishing sustainable partnerships with many governmental, private and civic organizations in industrial, medical, educational, health, professional development, safety, health and other fields." As for the future of the petrochemical industry, Husain said, "Due to its long-term nature, this industry is known for its multiple high and low cycles once every few years because of several factors, such as crude oil prices, plus supply and demand," he argued.
"Therefore, 2015 and beyond are expected to hold many challenges due to oil prices, commissioning new plants especially in the Gulf, increased supply, feedstock unavailability, the need to develop infrastructure and market fluctuations. All of these matters have an impact, directly or indirectly, on the performance of petrochemical markets, as well as the prices of petrochemicals, locally and globally." Established in 1995, EQUATE Petrochemical Company is an international joint venture between Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC).
Commencing production in 1997, EQUATE is the single operator of a fully integrated world-scale manufacturing facility producing over 5 million tons annually of high-quality petrochemical products which are marketed throughout the Middle East, Asia, Africa and Europe.