Mubarak Abdullah Al-Sabah, Chairman of QPIC
Qurain Petrochemicals Industries Company (QPIC) today held the postponed Ordinary and Extraordinary General Meetings at the Ministry of Commerce and Industry building in the Ministries Complex. QPIC reported to shareholders a net loss of KD 1,901,883 and a net earnings of (1.74) fils per share for the year ending 31 December 2010.
Sheikh Mubarak Abdullah Al-Sabah, Chairman of QPIC, said that the company recorded profits from all its investments except from the Kuwait Paraxylene Company (KPPC), whose plant is managed by EQUATE. Sheikh Mubarak clarified that the losses suffered by KPPC were operating losses due to the high cost of raw materials from Kuwait National Petroleum Company (KNPC) and a decrease in the world price of Paraxylene. These losses have been further compounded by the cost of the initial capital investment for setting up the Paraxylene plant.
KPPC is 20% owned by QPIC through its ownership of the Kuwait Aromatics Company, 40% by Kuwait Petroleum Company (KPC) through its interest in Petrochemical Industries Company (PIC), and 40% owned by KNPC.
QPIC’s total assets as of 31 December 2010 were valued at KD 193.22 million, which represents a slight increase of KD 1.87 million on the previous year. During the current year, QPIC’s book value also increased 7%, reaching 174 fils per share. This compares to 163 fils in the previous year and is due to the rise in value of investments available for sale.
Speaking of the company’s future plans, Sheikh Mubarak said: “The year ahead seems to be promising for the petrochemical industry in the region due to lower production costs. QPIC intends to make new investments in 2011 in line with the company’s strategic objectives of sustained growth and returns to its shareholders.”
QPIC's major projects include a 20% initial investment in aromatics and styrene ventures, which produces 400,000 tons of benzene annually, 820,000 tons of paraxylene, and 450,000 tons of styrene. The company is also engaged in additional investments through its 6% stake in EQUATE, producing 800,000 tons of ethylene, 830,000 tons of polyethylene, and 400,000 tons of ethylene glycol. Finally, the company’s investment in the Kuwait Olefins Company, through its 6% stake, operates a 850,000 tons of ethylene cracker annually, and produces 600,000 tons of ethylene glycol annually.
The execution of the Algerian Methanol Project was postponed due to circumstances beyond the company’s management control. QPIC is still waiting for the decision of Sonatrach, the Algerian government-owned company, to specify its position regarding a one-million ton methanol production contract that will cost between US $ 700 and 800 million. QPIC’s management explained that delays will not be in the interest of the project as costs will be on the rise during the upcoming period. It is currently following the developments of the situation with the Algerian government agencies to foresee the future of the project and its potential repercussions.
The United Petrochemicals Company (UPC) was established to build a US $700 million petrochemical plant with a world class production capacity. UPC has obtained all required permits from the Public Authority for Industry to build plants for the production of polyester, purified terephthalic acid (PTA) and polyethylene terephthalate (PET). These plants rely on paraxylene and are the first of their kind in Kuwait. PTA is used in the production of plastic films and polyester fibre products. It is also utilised in the manufacturing of plastic bottles and the packaging of various foods. This project will greatly help redirect the path for the Paraxylene plant.
Both the Ordinary and Extraordinary General Meetings approved all agenda items, including not distributing any dividends for the financial year 2010. The meetings also agreed the recommendation to decrease the company's capital by KD 80,742 (eighty thousand, seven hundred and forty two Kuwaiti dinars), which represents the value of unsubscribed shares. The company's capital has therefore been decreased from KD 110 million to KD 109,919,257.