Petrochemical Round Up - October 2011

Petrochemicals Round Up
SICO
Research
Sunday, 30 October 2011
News, Update & Analysis

SABIC leads Saudi Petrochemical companies 3Q11 earnings growth
Saudi Arabias petrochemical companies 3Q11 earnings increased 66% YoY and
5% QoQ led by SABIC, reporting SAR 8.2bn in 3Q11 earnings; 2% above
consensus estimate. Overall, performance of regional petrochemical companies
were mixed with APC, Chemanol, SAFCO, SABIC and SIPCHEM reporting better
than expected earnings while other stocks such as IQCD, Sahara, Tasnee, SIIG,
Yansab, Rabigh and Kayan disappointed during the quarter.
Weakness in polymer prices affected QoQ performance of APC, Yansab and
Sahara petrochemicals, and was one of the reasons for lower than estimated
earnings for Tasnee during the quarter.
Exhibit 1: Petchem earnings snapshot versus estimates
(local currency mn)
Company
Sabic
Safco
Kayan
Yansab
Tasnee
Rabigh
Petrochem
SIIG
Sipchem
Sahara
APC
Chemanol
Alujain
Nama
S audi Petc hems
IQCD
M. Cap
(US D mn)
75,996
12,299
7,080
6,615
5,856
5,302
2,752
2,304
1,916
1,494
1,044
375
327
314
123, 673
19,182
3Q11
2Q11
8,185
8,101
1,211
790
(35)
(16)
828
964
725
594
(281)
(402)
(13)
(12)
143
147
208
165
98
209
135
156
27
11
23
(19)
(29)
17
11, 225 10, 703
2,074
2,076
3Q10
5,326
604
(5)
356
373
(237)
(3)
46
84
69
121
(16)
16
13
6, 747
1,425
Y oY
54%
100%
NM
132%
94%
NM
NM
212%
148%
42%
12%
NM
39%
NM
66%
46%
3Q11
QoQ Cons V ar (%)
1%
8,033
2%
53%
1,076
13%
NM
(14)
NM
-14%
902
-8%
22%
749
-3%
NM
198
NM
NM
(13)
NM
-3%
194
-26%
26%
183
14%
-53%
154
-37%
-13%
123
10%
151%
14
94%
NM
NA
NM
NM
NA
NM
5%
0%
2,206
-6%
Source: Bloomberg, SICO Research
CONTENTS
www.sicobahrain.com
Research@sicobahrain.com
News, Update & Analysis

Index Performance
Commodity Price Monitor
Commodity Performance Charts
Price Oil, Gas and Naphtha
Price & Margins Basic Petrochemicals
Price & Margins Ethylene and Propylene Derivatives
Price & Margins Methanol and Derivatives
Price & Margins Vinyls and Derivatives
Prices- Grains & Fertilizers
Prices- Commodity Index and Metals
Monthly Crude Steel production (000 tonnes)
Price Performance- GCC Petrochemical Companies and Indices
GCC Petrochemical Companies- Price Performance Charts
Relative Valuation Chemical Universe
Company Forward Valuation Charts- PE and PBV
Major GCC Listed Petrochemical Companies- Product Portfolio
GCC Petrochemical Industry - Project Monitor
SICO 2011 All Rights Reserved
Attention is drawn to the disclaimer and other information on 18
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2
3
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4
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7
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9
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17
Page 1
Saudi Petrochem Index (SASEPETR) increased 2.2% since our last update on September 15th, 2011 outperforming
both S&P 500 Chemical Index and Tadawul, which increased 0.9% and 0.8%, respectively during this period.
SASEPETRs outperformance was largely led by SABIC, which increased 3.5% during this period after reporting
strong 3Q11 earnings.
Index Performance SASEPETR vs S&P 500 Chemical Index vs Tadawul
250
200
150
100
50
SASEPETR INDEX
S5CHEM INDEX
Source: Bloomberg
Oct-11
Aug-11
Jun-11
Apr-11
Feb-11
Dec-10
Oct-10
Aug-10
Jun-10
Feb-10
Apr-10
Dec-09
Oct-09
Aug-09
Jun-09
Apr-09
Feb-09
Dec-08
Oct-08
Jul-08
Aug-08
May-08
Mar-08
Jan-08
Sep-07
Nov-07
Jul-07
May-07
Mar-07
Jan-07
SASEIDX INDEX
Note: Rebased to 100 as at Jan, 2007
Saudi Chemanol halted operations for 12 days

Saudi Chemanol halted operations in its methanol and dimethylformamide plants for 12 days in order to implement
some technical improvements to boost the two plants' productivity. The company expects the impact on its 4Q11
financials to be limited, as it has enough inventories to meet its commitments. The company restarted operations on
October 24th after successfully finishing improvements.
Saudi Kayan begins commercial production at Jubail plant
Saudi Kayan has begun commercial production at the company's petrochemical complex in Jubail Industrial City.
Most of the production plant's units are now operational, including the companys 350,000 ton-per-year (t/y)
polypropylene plant, 400,000 t/y polyethylene plant, 260,000 t/y polycarbonate plant, and 566,000 t/y ethylene
glycol plant. Once fully operational, the complex will have an overall capacity of 4mn t/y. The move is expected to
have an impact on the company's financial performance in 4Q11.
Borouge III to be fully operational by mid-2014
The third phase of Abu Dhabi-based polymer producer, Borouge, being built at an estimated cost of USD 4.5bn will
be completed on schedule by end 2013 with plant fully operational by mid-2014. The combined production capacity
of Borouge I and II is two million metric tonnes a year. By mid-2014, when Borouge III comes on stream, Borouge's
capacity will increase to 4.5 million tonnes a year, making it the single-largest polyolefins plant in the world.
Petro Rabigh likely to sell more shares to fund expansion
Rabigh intends to sell additional shares to existing and new investors in order to fund a plan to double its
petrochemical output. According to MEED, Rabigh has received all bids for the engineering, procurement and
construction contracts for the USD 5-8bn Rabigh II upgrade project set to double chemical capacity to over 4 mn
tonnes pa. A final investment decision is likely by end-2011 and the financing will be arranged Q1 2012.
Page 2
Commodity Price Monitor

C u rren t
28- O ct- 11
1 week
%
B eg . O f
%
ag o
ch an g e
Q tr
ch an g e
YTD
Perf.
%
1 m th
%
3 m th s
%
1 y ear
%
ch an g e ag o ch an g e
ag o
ch an g e ag o ch an g e
WTI Crude ($/bbl)
93.32
87.2
7.0%
86.5
7.9%
91.4
2.1%
79.2
17.8%
95.7
-2.5%
81.4
Natural Gas( $/mcf)
3.63
3.55
2.3%
4.10
-11.5%
4.23
-14.2%
3.67
-1.1%
4.26
-14.8%
3.35
8.4%
Naphtha($/mt)
877
884
-0.8%
974
-10.0%
877
0.0%
901
-2.7%
999
-12.2%
768
14.1%
985
985
0.0%
1,065
-7.5%
1,145
-14.0%
1,020
-3.4%
1,110
-11.3%
1,015
-3.0%
1,240
1,240
0.0%
1,510
-17.9%
1,220
1.6%
1,380
-10.1%
1,510
-17.9%
1,110
11.7%
Ethylene($/mt)
Propylene($/mt)
Benzene($/mt)
14.6%
980
980
0.0%
1,160
-15.5%
1,030
-4.9%
1,035
-5.3%
1,210
-19.0%
940
4.3%
Butadiene($/mt)
2,010
2,010
0.0%
3,590
-44.0%
2,020
-0.5%
2,640
-23.9%
3,930
-48.9%
1,970
2.0%
HDPE($/mt)
1,315
1,315
0.0%
1,370
-4.0%
1,260
4.4%
1,345
-2.2%
1,405
-6.4%
1,265
4.0%
LDPE($/mt)
1,425
1,425
0.0%
1,530
-6.9%
1,660
-14.2%
1,480
-3.7%
1,570
-9.2%
1,575
-9.5%
LLDPE($/mt)
1,205
1,205
0.0%
1,320
-8.7%
1,360
-11.4%
1,240
-2.8%
1,395
-13.6%
1,325
-9.1%
PP($/mt)
1,375
1,375
0.0%
1,545
-11.0%
1,470
-6.5%
1,460
-5.8%
1,600
-14.1%
1,390
-1.1%
PS($/mt)
1,660
1,660
0.0%
1,810
-8.3%
1,485
11.8%
1,745
-4.9%
1,790
-7.3%
1,450
14.5%
PVC($/mt)
895
895
0.0%
1,100
-18.6%
1,015
-11.8%
970
-7.7%
1,120
-20.1%
1,010
-11.4%
Methanol($/ton)
415
415
0.0%
390
6.4%
355
16.9%
415
0.0%
400
3.8%
345
20.3%
MEG($/mt)
1,120
1,120
0.0%
1,280
-12.5%
1,095
2.3%
1,230
-8.9%
1,230
-8.9%
960
16.7%
Styrene ($/mt)
1,285
1,285
0.0%
1,490
-13.8%
1,360
-5.5%
1,390
-7.6%
1,545
-16.8%
1,245
3.2%
320
320
0.0%
445
-28.1%
485
-34.0%
405
-21.0%
455
-29.7%
565
-43.4%
EDC ($/mt)
VCM ($/mt)
755
755
0.0%
875
-13.7%
915
-17.5%
825
-8.5%
920
-17.9%
875
-13.7%
PTA ($/mt)
1,090
1,090
0.0%
1,305
-16.5%
1,235
-11.7%
1,215
-10.3%
1,225
-11.0%
1,060
2.8%
F ertiliz ers
Ammonia($/ton)
550
545
0.9%
500
10.0%
395
39.2%
540
1.9%
480
14.6%
410
34.1%
Urea($/ton)
510
500
2.0%
506
0.8%
385
32.5%
520
-1.9%
500
2.0%
355
43.7%
DAP($/MT)
630
635
-0.8%
648
-2.7%
595
5.9%
635
-0.8%
670
-6.0%
573
10.0%
Turkey Steel Rebar($/t)
678
679
-0.2%
716
-5.4%
650
4.2%
718
-5.6%
755
-10.3%
573
18.3%
China expt billet($/t)
753
738
2.0%
876
-14.1%
786
-4.2%
798
-5.7%
873
-13.8%
739
1.8%
China Iron ore ($/t)
157
169
-7.2%
185
-15.0%
176
-10.7%
184
-14.6%
182
-13.6%
156
0.3%
2,223
2,104
5.7%
2,400
-7.3%
2,461
-9.7%
2,124
4.7%
2,597
-14.4%
2,316
-4.0%
Metals
Aluminium($/t)
Source: Bloomberg, LME, Polymer update, SICO Research
Page 3
Commodity Performance Charts

Av erage Price: MTD v s. Same Period
L ast Year
18%
REBAR
47%
53.8%
AMMONIA
PP
7%
METHANOL
14.9%
ETHYLENE
-9%
24.2%
9.7%
WTI CRUDE
7%
50%
-50%
100%
0%
METHANOL
33.4%
PP
20.8%
PP
LDPE
LDPE
12.8%
PROPYLENE
PROPYLENE
23.9%
ETHYLENE
8.5%
NAPHTHA
NAPHTHA
35.8%
NYMEX GAS
-2.4%
NYMEX GAS
1%
AMMONIA
44.8%
ETHYLENE
-5.7%
NAPHTHA
20%
0%
43.9%
0.0%
PROPYLENE
15%
58.4% UREA
UREA
AMMONIA
8.7%
LDPE
-3%
REBAR
22.9%
REBAR
39.7%
METHANOL
38%
-50%
17.4%
UREA
33%
Av erage Price: Y TD vs. S ame Period

L ast Year
Av erage Price: QTD v s. Same

Peri od Last Y ear
NYMEX GAS
-10.4%
WTI CRUDE
50% 100%
WTI CRUDE
21.8%
-50%
0%
50%
100%
.
Commodity prices & indicative margins for week ended October 28, 2011
Price Oil, Gas and Naphtha
Sep-11
Jan-11
May-11
Sep-10
Jan-10
May-10
Sep-09
Jan-09
May-09
Sep-08
Jan-08
May-08
Jan-07
May-07
Sep-06
Jan-06
May-06
Sep-05
Jan-05
May-05
Sep-11
Jan-11
May-11
Sep-10
Nov-10
Jan-10
May-10
Jun-10
Sep-09
Jan-09
May-09
Sep-08
Jan-08
May-08
0
Sep-07
0
Jan-07
20
May-07
40
Sep-06
60
Jan-06
10
80
May-06
12
100
Sep-05
14
120
Jan-05
140
May-05
16
Sep-07
NYMEX GAS($/mcf)
WTI CRUDE($/bbl)
160
NAPHTHA ($/MT)
1,400
Naphtha
1,200
1,000
800
600
400
200
Sep-11
Apr-11
Jan-10
Aug-09
Oct-08
Mar-09
May-08
Jul-07
Dec-07
Feb-07
Sep-06
Apr-06
Nov-05
Jan-05
Jun-05
Page 4
Price & Margins Basic Petrochemicals

2,000
Price(LHS)
1,000
500
0
Price(LHS)
Margins(RHS)
Margins(RHS)
Butadiene ($/MT)
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
900
800
700
600
500
400
300
200
100
0
(100)
Propylene ($/MT)
1,500
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
900
800
700
600
500
400
300
200
100
0
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Ethylene ($/MT)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
3,500
3,000
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Margins(RHS)
800.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
0.0
(100.0)
Benzene ($/MT)
1400
2,500
1200
2,000
1000
1,500
800
1,000
600
500
400
200
(500)
Price(LHS)
1600
Jan-05
Jan-06
Jan-07
Jan-08
Prices(LHS)
Jan-09
Jan-10
Jan-11
Margins(RHS)
Page 5
Price & Margins Ethylene and Propylene Derivatives
Page 6
Price & Margins Methanol and Derivatives

METHANOL ($/MT)
700
500
600
400
300
500
200
MTBE ($/MT)
1,600
1,200
1,000
400
100
300
800
(100)
600
(200)
400
(300)
200
(400)
200
100
Price(LHS)
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
800
700
600
500
400
300
200
100
0
(100)
(200)
1,400
Margins(RHS)
Price(LHS)
Margins(RHS)
Price & Margins Vinyls and Derivatives

VCM($/MT)
1,000
800
600
400
200
Jan-05
May -05
S ep-05
Jan-06
May -06
S ep-06
Jan-07
May -07
S ep-07
Jan-08
May -08
S ep-08
Jan-09
May -09
S ep-09
Jan-10
May -10
S ep-10
Jan-11
May -11
S ep-11
Prices(LHS)
Margins(RHS)
350
300
250
200
150
100
50
0
(50)
(100)
(150)
1,400
PVC ($/MT)
350
1,200
300
1,000
250
800
200
600
150
400
100
200
50
Jan-05
May -05
S ep-05
Jan-06
May -06
S ep-06
Jan-07
May -07
S ep-07
Jan-08
May -08
S ep-08
Jan-09
May -09
S ep-09
Jan-10
May -10
S ep-10
Jan-11
May -11
S ep-11
1,200
Prices(LHS)
Margins(RHS)
Page 7
Price(LHS)
Margins(RHS)
1,400
1,200
1,000
800
600
400
200
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Dec-07
Sep-07
2.0
1.0
0.0
1,200
1,000
800
600
400
200
900
800
700
600
500
400
300
200
100
0
(100)
(200)
Nov-07
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Dec-07
Sep-07
Jun-07
Mar-07
9.0
20
8.0
18
7.0
16
6.0
14
5.0
12
4.0
10
3.0
8
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11
Sep-11
Prices- Grains & Fertilizers

CORN($/BU)
RICE($/BU)
WHEAT($/CWT)
1,000
900
800
700
600
500
400
300
200
100
0
AMMONIA ($/MT)
700
600
500
400
300
200
100
0
(100)
(200)
(300)
Price(LHS)
DAP ($/MT)
Price(LHS)
Margins(RHS)
900
UREA ($/MT)
700
800
600
700
500
600
400
500
300
400
300
200
100
200
0
100
(100)
(200)
Margins(RHS)
Page 8
2500
2000
1500
1000
500
Apr-07
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
Dec-07
Sep-11
May-11
Jan-11
Sep-10
Aug-11
Apr-11
Dec-10
Apr-10
3000
Aug-10
ALUMINIUM ($/ MT)
May-10
3500
Jan-10
Sep-09
May-09
Jan-09
Sep-08
0
May-08
50
Jan-08
150
Sep-07
200
Jan-07
STEEL CHINA IRON ORE ($/MT)
May-07
250
Aug-07
Sep-06
100
Dec-06
200
Jan-06
CRB CMDT INDEX
May-06
800
Apr-06
1,000
300
Aug-06
400
Sep-05
500
Dec-05
600
May-05
100
$/MT
Sep-11
Jan-11
May-11
Sep-10
Jan-10
May-10
Sep-09
Jan-09
May-09
Sep-08
May-08
Jan-08
Sep-07
Jan-07
May-07
Sep-06
Jan-06
May-06
Sep-05
Jan-05
May-05
700
Jan-05
Sep-11
Sep-10
Jan-11
May-11
Sep-09
Jan-10
May-10
Sep-08
Jan-09
May-09
Sep-07
Jan-08
May-08
Sep-06
Jan-07
May-07
Sep-05
Jan-06
May-06
Jan-05
May-05
Prices- Commodity Index and Metals
1,800
TURKEY EXP. STEEL REBAR ($/MT)
1,600
1,400
1,200
600
400
200
0
Page 9
Monthly Crude Steel production (000 tonnes)
Qatar
S audi Arabia
200
250%
180
160
200%
140
120
150%
100
80
100%
60
40
50%
500
160%
450
140%
400
120%
350
100%
300
80%
250
60%
200
40%
150
20%
100
0%
20
50
0%
Jan Feb Mar Apr May Jun
-20%
Jul Aug Sep Oct Nov Dec
-40%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Egy pt
700
Turkey
35%
30%
600
25%
500
400
300
200
100
0
50%
2,500
15%
2,000
10%
1,500
5%
1,000
0%
500
Mi ddle East
2,000
60%
3,000
20%
-5%
3,500
40%
30%
20%
10%
0%
World
35%
1,800
30% 140,000
40%
1,400
25% 120,000
35%
1,200
20% 100,000
30%
1,000
15%
80,000
25%
800
10%
60,000
5%
40,000
0%
20,000
1,600
600
400
200
0
-5%
Jan
2009
Feb Mar Apr May Jun
2010
2011
Jul
Aug Sep
Growth(2010/09)
Oct
Nov Dec
20%
15%
10%
5%
0%
Growth(2011/10)
Source: IISI, SICO Research

Note Middle East includes Saudi Arabia, Qatar, and Iran.
Page 10
Price Performance- GCC Petrochemical Companies and Indices

Nam e
Pric e
C rn c y
Pric e c h an g e ( %)
1 Day
1 week 1 m o n th
1 y ear
Pric e ( 52- Week)
3 Mo . Av g Daily
Low
Tu rn o v er ( $m n )
Hig h
Mid d le East
SABIC
98.25
SAR
3.4%
5.6%
6.2%
1.3%
82.5
114.0
185
SAFCO
185.25
SAR
0.7%
1.1%
SIPCHEM
20.05
SAR
2.0%
4.7%
1.8%
27.3%
142.3
194.3
11.1%
-11.4%
15.9
26.1
Ind. Qatar
129.90
QAR
2.3%
3.2%
4.8%
12.0%
113.8
154.5
13
Saudi Kayan
18.10
SAR
2.0%
5.2%
CHEMANOL
11.75
SAR
0.9%
0.4%
6.5%
2.5%
14.0
20.3
25
2.6%
-16.1%
10.1
16.8
PetroRabigh
22.85
SAR
1.1%
0.0%
-6.5%
1.1%
18.3
30.1
12
YANSAB
45.00
SAR
APPC
27.90
SAR
2.0%
2.3%
-0.4%
6.6%
37.5
53.5
18
0.7%
0.0%
-2.8%
7.7%
22.5
35.7
ALCO
17.95
SAR
1.1%
-1.1%
-4.0%
-6.3%
15.5
25.0
NIC
40.40
SAR
2.0%
1.8%
2.5%
42.9%
25.6
45.2
17
SIIG
19.55
SAR
1.6%
0.3%
0.5%
3.4%
15.8
28.0
Sahara Petro.
19.65
SAR
2.6%
3.4%
-6.0%
-15.5%
14.9
27.6
13
Nama Chem.
9.30
SAR
1.6%
1.1%
0.0%
-7.5%
8.2
12.8
Boubyan Petro
560.00
KWD
0.0%
0.0%
-1.8%
1.8%
470.0
620.0
Al Qurain
222.00
KWD
-0.9%
-0.9%
1.8%
-7.5%
166.0
238.0
Westlake
43.14
USD
0.9%
14.6%
25.8%
35.0%
31.3
67.8
20
Dow
29.25
USD
0.5%
7.4%
30.2%
-5.2%
20.6
42.2
367
Eastman
41.92
USD
4.7%
11.9%
22.3%
6.7%
32.4
55.4
94
Methanex
26.59
USD
-0.4%
6.1%
27.6%
-4.2%
19.5
34.9
Ashland Inc.
55.57
USD
1.1%
13.2%
25.9%
7.6%
41.1
69.5
58
Yara
271.30
NOK
-1.5%
6.0%
19.2%
-11.9%
200.5
352.5
119
Akzo Nobel
39.47
EUR
1.1%
5.8%
18.4%
-7.5%
29.3
53.7
32
BASF
54.66
EUR
0.4%
8.5%
19.2%
4.2%
42.2
70.2
233
323,000.0
KRW
1.6%
11.8%
11.0%
30.2%
No rth Am eric a
Eu ro p e
Asia
Honam
218,000.0 475,500.0
103
Sumitomo
306.00
JPY
3.0%
10.5%
1.7%
-12.8%
273.0
472.0
38
Taiwan Fert.
80.00
TWD
2.3%
11.4%
6.5%
-23.4%
66.6
118.0
22
Formosa Plast.
89.30
TWD
1.4%
4.4%
9.3%
1.7%
76.0
117.0
32
6,367.92
2.4%
3.6%
3.5%
6.4%
5,086.5
7,122.0
S5CHEM
314.76
0.1%
5.5%
22.0%
10.2%
245.5
344.5
SASEIDX
6,235.64
1.4%
2.1%
2.0%
-1.9%
5,231.5
6,795.3
DSM
8,535.68
0.8%
2.1%
1.3%
9.4%
7,489.3
9,290.2
In d ic es
SASEPETR
Source: Bloomberg
Source: Bloomberg.
Page 11
GCC Petrochemical Companies- Price Performance Charts
SASEIDX
S5CHEM
SASEPETR
2.0%
DSM
SASEIDX
22.0% S5CHEM
SASEPETR
1.7%
2.0%
22.0%
3.5%
1.7%
2.0%
3.5%
Al Qurain
Boubyan Petro
Sidi Kerir
Nama Chem.
Sahara Petro.
NIC
ALCO
APPC
YANSAB
PetroRabigh
CHEMANOL
1.8%
-1.8%
4.1%
0.0%
-6.0%
2.5%
-4.0%
-2.8%
-0.4%
-6.5%
2.6%
-10%
0%
10%
20%
Y TD performance
QTD performance
MTD performance
30%
22.0%
3.5%
2.0%
22.0%
3.5%
4.1%
0.0%
-6.0%
2.5%
-4.0%
-2.8%
-0.4%
-6.5%
2.6%
0%
-5.8%
DSM
SASEIDX
S5CHEM
SASEPETR
-1.7%
-5.8%
20%
40%
SASEIDX
S5CHEM
SASEPETR
1.8%
-2.3%
DSM
SASEIDX
S5CHEM
SASEPETR
1.8%
-2.3%
18.1%
Al Qurain
Boubyan Petro
-13.0%
Sidi Kerir
-16.6%
Nama Chem.
-17.1%
Sahara Petro.
NIC
ALCO
-19.5%
APPC
-5.5%
YANSAB
PetroRabigh
-27.2%
CHEMANOL
1.8%
-1.8%
-20%
SASEIDX
S5CHEM
SASEPETR
-40%
-20%
3.7%
25.2%
2.6%
1.8%
0%
20%
Al Qurain
Boubyan Petro
Sidi Kerir
Nama Chem.
Sahara Petro.
NIC
ALCO
APPC
YANSAB
PetroRabigh
CHEMANOL
40%
Source: Bloomberg.
Page 12
Relative Valuation Chemical Universe

Nam e
C o u n try
Price ( L C )
EPS
Gro wth ( %)
Mkt
C ap
( $m n )
2010
2011E
2012E
2010
PER ( x )
EV/EB ITDA
P/B V
Div id en d Yield ( %)
2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2009
2010
2011E
2012E
Mid d le East
SABIC
KSA
98.25
78,592
13.7
10.0
10.0
137%
37%
0%
8.2
6.6
6.4
2.4
2.1
1.9
3.1%
3.6%
4.1%
4.3%
SAFCO
KSA
185.25
12,349
14.3
12.6
12.6
79%
13%
1%
15.2
11.9
11.8
6.5
6.0
5.5
6.5%
6.5%
6.6%
6.6%
SIPCHEM
KSA
20.05
1,960
19.5
12.0
11.0
169%
63%
9%
11.0
7.7
7.2
1.5
1.3
1.2
4.5%
4.5%
3.6%
3.6%
Ind. Qatar
Qatar
129.9
19,621
12.8
8.7
8.6
12%
47%
1%
12.5
8.2
7.8
3.3
2.7
2.3
3.8%
4.2%
5.5%
5.7%
Saudi Kayan
KSA
18.1
7,239
NM
64.6
11.2
NM
NM
480%
NM
35.8
11.1
1.8
1.7
1.5
0.0%
0.2%
0.6%
CHEMANOL
KSA
11.75
378
235.0
18.0
11.4
58%
20.1
9.8
8.2
1.0
1.0
0.9
0.0%
1.7%
2.6%
PetroRabigh
KSA
22.85
5,337
95.2
12.5
7.8
NM
662%
60%
22.9
12.1
9.2
2.5
2.1
1.6
0.0%
0.0%
0.0%
YANSAB
KSA
45
6,749
15.1
8.2
8.3
NM
85%
-2%
12.8
8.3
8.2
3.4
2.6
2.0
0.0%
0.0%
1.1%
2.2%
APPC
KSA
27.9
1,052
12.0
8.4
9.3
158%
43%
-10%
8.1
6.6
6.9
2.2
1.9
1.7
3.6%
6.3%
6.3%
5.7%
ALCO
KSA
17.95
331
29.4
NA
NA
NM
NA
NA
19.2
NA
NA
2.2
NA
NA
0.0%
0.0%
NA
NA
NAMA
KSA
9.3
319
34.4
NA
NA
NM
NA
NA
28.0
NA
NA
0.7
NA
NA
0.0%
0.0%
NA
NA
Sahara Petro. KSA
19.65
1,533
17.4
9.4
8.6
223%
85%
10%
NM
18.6
12.9
1.7
1.5
1.3
0.0%
0.0%
2.3%
2.4%
SIIG
KSA
19.55
2,346
21.7
15.3
8.7
32%
42%
75%
32.4
26.0
8.4
1.5
1.4
1.3
2.6%
2.6%
NA
3.1%
National Ind. KSA
40.4
6,005
15.3
9.2
9.3
183%
66%
-1%
9.8
6.9
7.0
2.4
2.1
1.8
1.5%
2.3%
3.4%
3.5%
-72% 1206%
0.0%
-
No rth Am erica
Westlake
U.S.
43.14
2,873
12.9
10.1
10.8
319%
27%
-6%
5.8
4.7
4.9
1.9
1.6
1.4
0.5%
0.6%
0.6%
0.6%
Dow
U.S.
29.25
34,551
16.7
10.7
10.0
447%
56%
8%
9.4
7.0
6.8
1.9
1.4
1.3
2.1%
2.1%
3.1%
3.5%
Eastman
U.S.
41.92
5,886
13.8
9.1
9.3
223%
53%
-3%
5.9
5.2
5.2
3.6
3.1
2.6
2.1%
2.1%
2.3%
2.3%
Methanex
U.S.
26.59
2,478
24.2
13.8
8.1
NM
76%
69%
12.7
7.2
5.1
1.9
1.8
1.5
2.3%
2.3%
2.5%
2.5%
Eu ro p e
Yara
Norway
271.3
14,392
9.0
7.7
8.4
131%
16%
-8%
8.4
5.2
5.8
2.2
1.8
1.5
1.7%
2.0%
2.3%
2.6%
Akzo Nobel
Netherlands
39.465
13,076
12.2
12.6
12.1
163%
-3%
4%
6.3
6.1
6.0
1.0
1.0
1.0
3.5%
3.4%
3.7%
3.8%
BASF
Germany
54.66
71,099
11.0
8.6
9.6
222%
28%
-10%
5.3
5.4
5.6
2.3
2.1
1.9
3.1%
4.0%
4.4%
4.5%
Asia
Honam
S.Korea
323000
9,328
13.1
8.6
7.6
-2%
52%
13%
9.9
6.2
5.5
2.3
1.8
1.5
0.5%
0.5%
0.6%
0.8%
Sumitomo
Japan
306
6,688
34.3
NA
NA
-125%
NA
NA
9.7
NA
NA
0.9
NA
NA
2.9%
2.0%
3.9%
4.0%
Taiwan Fert.
Taiwan
80
2,624
45.5
23.2
19.4
36%
96%
20%
66.7
43.5
26.3
1.6
1.5
1.5
1.8%
2.8%
3.1%
3.7%
89.3
18,291
12.0
11.3
11.0
65%
7%
2%
14.0
12.5
11.9
2.1
2.1
1.9
4.5%
7.6%
7.5%
7.8%
Formosa Plast. Taiwan
Source: Bloomberg, SICO Research.

Note: - Based on Bloomberg Consensus Estimates
Page 13
Company Forward Valuation Charts- PE and PBV

SABIC- PER and PBV charts
35x
29x
23x
17x
11x
5x
SABIC
Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09 May-10 Jan-11 Sep-11
12x
10x
8x
6x
4x
2x
SABIC
Source: Company Data , SICO Research
IQ- PER and PBV charts

28x
24x
20x
16x
12x
8x
IQ
6x
5x
4x
3x
2x
1x
IQ
Page 14
SAFCO- PER and PBV charts

38x
32x
26x
20x
14x
8x
SAFCO
12x
10x
8x
6x
4x
2x
SAFCO
SIPCHEM- PER and PBV charts

28x
24x
20x
16x
12x
8x
Sipchem
Nov-06
Jun-07
Jan-08
Aug-08
Mar-09
Oct-09
May-10
Dec-10
Jul-11
4.0x
3.0x
2.0x
1.0x
Sipchem
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-11
5.0x
Page 15
Major GCC Listed Petrochemical Companies- Product Portfolio

Company
IQ
SIPCHEM
SAFCO
Other major
downs tream
petrochems
LDPE, LLDPE, HDPE,
Qatar
Ethylene, Methanol
MTBE
Acetic acid, Butanediol,
Saudi Arabia
Methanol
VAM.
Country
Saudi Arabia
Bas ic Petrochems
Methanol
YANSAB
Saudi Arabia Ethylene, Propylene
KAYAN
Saudi Arabia
RABIGH
Saudi Arabia
APPC
MAADEN
Ethylene
Saudi Arabia
LDPE,HDPE,PP,MEG,
BTX
HDPE,LDPE,PP,EO,EG,Ph
enol
DRI, Steel
Industrial Gases
Gasoline, Fuel
Oil
Ammonia, DAP
PP,LDPE, HDPE
SAHARA
HDPE,LDPE
Saudi Arabia
Propylene
PP
CHEMANOL Saudi Arabia
Methanol
Source: Zawya, MEED, SICO Research
Urea,Ammonia,
Melamine
PP
TASNEE
Alujain
Other
products
Urea,Ammonia,
Melamine
Ethylene, Propylene,
EPPE, LLDPE, HDPE, PP,
Benzene,Styrene,
PO, EG
Methanol
Propylene
F ertiliz ers
Gold,
Aluminium
Titanium Oxide
Acrylic Acid,
Caustic Soda,
EDC
Pesticides
Urea, Melamine,
Industrial Gases
Formaldehyde
Note - includes major announced expansion projects.
Page 16
GCC Petrochemical Industry - Project Monitor

Company
Saudi
Kayan
QAFCO
QAFCO
Country
L ocation
Saudi Arabia
Jubail
Ethy lene Propy lene

Capacity Capacity
(' 000MT) (' 000MT)
1,350
550
Qatar
Qatar
Petrochem Saudi Arabia
Jubail
1,100
400
Downs tream
products
Cos t
($mn)
Ex pected
/ online
10,000
4Q11
3,000
610
1Q12
4Q12
HDPE,LDPE,PP
5,900
2H 2012
Acrylic Acid
Caustic Soda, EDC
Ethylene
acetate/Butyl
Acetate
670
550
1H14
2H13
Sabic (35%),
Al
Kayan (20%)
IQ (75%)
IQ (75%)
Petrochem(65%),
Chevron(35%)
Basell
Maaden (50%)
110
1H14
Sipchem (100%)
HDPE,LDPE,PP,EO,EG
,Phenol
Urea, Ammoina
Urea
TSOC
Sahara
Saudi Arabia
Saudi Arabia
Jubail
Jubail
SIPCHEM
Saudi Arabia
Jubail
SIPCHEM
Saudi Arabia
Jubail
EVA/LDPE
860
1H14
SIPCHEM
Saudi Arabia
Jubail
Wire/Cable polymers
60
1H14
SABIC
Saudi Arabia
Jubail
MMA,PMMA,Acrylon
itrile,
Polyacrylonitrile,SCN
3,200
2H 2013
20,000
2H15
Sadara
Saudi Arabia
Jubail
PUR, LLDPE, PO,

MEG, LDPE, Amines,
Elastomers, Glycol
Ethers
SAFCO
SAAC /
Aafinuc
Saudi Arabia
Jubail
Urea
Saudi Arabia
Jubail
Polymer
Major
s hareholders
SIPCHEM (75%),
Hanwha (25%)
SIPCHEM (50%),
Hanwha (50%)
Aramco (50%) &

Dow (50%)
1H14
374
3Q13
SAAC (75%) Aafinuc

(25%)
Source: Zawya, MEED, SICO Research
Page 17

NOTES
Contact Details
BMB Centre, 1 Floor
P.O Box 1331,
Diplomatic Area
Manama
Kingdom of Bahrain
st
Investment Research
research@sicobahrain.com
Petrochemical margins reflect the difference between spot commodity

prices and spot prices of major feedstock.
Following benchmarks have been used for prices and marginsGas- Henry Hub spot; Oil- WTI Crude spot; Naphtha- Japan FOB prices;
Urea- Middle East FOB; Ammonia- Middle East FOB; MEG SE Asia CFR;
Methanol- SE Asia CIF; DAP- Tunisia FOB.
For all other commodities- Far East Asia CFR is taken as a benchmark,
unless mentioned.
Grain prices reflect Chicago Board of Trade future prices.
Jithesh K Gopi, CFA

Head of Research
Tel: (Direct): +973 1751 5021
Fadhel Makhlooq
Head of Brokerage
Tel: (Direct): +973 1751 5202
Visit us at
www.sicobahrain.com
Securities & Investment Company BSC

Disclaimer
This report does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer
to buy or subscribe for any securities. The information and opinions contained in this report have been compiled or arrived at from sources
believed to be reliable and in good faith, but no representation or warranty, express or implied, is made as to their accurac y, completeness or
correctness and are subject to change without notice. Investors must make their on investment decisions. Past performance is not necessarily a
guide to future performance. Nothing in this report should be construed as investment or financial advice or as an advice to buy or sell the
securities of the company referred to in this report. SICO and/or its clients may have positions in or options on the securities mentioned in this
report or any related investments, may effect transactions or may buy, sell or offer to buy or sell such securities or any related investments.
Additional information on the contents of this report is available on request.
Securities & Investment Company (SICO) as a full-service firm has or may have business relationships including investment banking
relationships, with the companies in this report.
Copyright Notice
Securities & Investment Company BSC 2011. This report is being supplied to the recipient for information and not for circulation and may
not be reproduced, redistributed or passed on to any other person or published, in whole or in part.
Page 18

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Petrochemicals Round Up

Sunday, 30 October 2011

News, Update & Analysis

Source: Bloomberg, SICO Research

News, Update & Analysis

Sunday, 30 October 2011

Saudi Chemanol halted operations for 12 days

Sunday, 30 October 2011

Commodity Price Monitor

WTI Crude ($/bbl)

Natural Gas( $/mcf)

Turkey Steel Rebar($/t)

China expt billet($/t)

China Iron ore ($/t)

Source: Bloomberg, LME, Polymer update, SICO Research

Sunday, 30 October 2011

Commodity Performance Charts

Av erage Price: Y TD vs. S ame Period

Av erage Price: QTD v s. Same

Price Oil, Gas and Naphtha

Source: Bloomberg, SICO Research

Sunday, 30 October 2011

Price & Margins Basic Petrochemicals

Source: Bloomberg, SICO Research

Sunday, 30 October 2011

Price & Margins Ethylene and Propylene Derivatives

Source: Bloomberg, SICO Research

Sunday, 30 October 2011

Price & Margins Methanol and Derivatives

Source: Bloomberg, SICO Research

Price & Margins Vinyls and Derivatives

Source: Bloomberg, SICO Research

Prices- Grains & Fertilizers

Source: Bloomberg, SICO Research

ALUMINIUM ($/ MT)

STEEL CHINA IRON ORE ($/MT)

CRB CMDT INDEX

Prices- Commodity Index and Metals

TURKEY EXP. STEEL REBAR ($/MT)

Source: Bloomberg, SICO Research

Sunday, 30 October 2011

Monthly Crude Steel production (000 tonnes)

Jul Aug Sep Oct Nov Dec

Jul Aug Sep Oct Nov Dec

Jul Aug Sep Oct Nov Dec

Feb Mar Apr May Jun

Jul Aug Sep Oct Nov Dec

Source: IISI, SICO Research

Sunday, 30 October 2011

Price Performance- GCC Petrochemical Companies and Indices

Pric e ( 52- Week)

Sunday, 30 October 2011

GCC Petrochemical Companies- Price Performance Charts

Sunday, 30 October 2011

Relative Valuation Chemical Universe

2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2009

Sahara Petro. KSA

National Ind. KSA

Formosa Plast. Taiwan

Source: Bloomberg, SICO Research.

Sunday, 30 October 2011

Company Forward Valuation Charts- PE and PBV

Source: Company Data , SICO Research