USSaudiForum - Panel 6 - Mutlaq al Morished - Downstream Petrochemicals

DOWNSTREAM PETROCHEMICALS ….WORLD-CLASS INDUSTRIAL PARKS

Mutlaq H. Al-Morished CFO, SABIC

September 17, 2013Los Angeles

No. 2

► 37 years of solid well-sustained global growth

► Total assets of $ 90 bln, at end of 2012

► 2012 revenues were $ 50 bln

► 2012 net income of $ 6.6 bln

► Record production volume of 72 MMT in 2012

► 40,000 employees in 40+ countries

► 6 Strategic Business Units

► 60 world-class plants worldwide

► 18 Technology, Innovation and Application Centres, globally

SABIC… a global player

No. 3

Exceptionally strong financial profile• Highest rated chemical company (rated A1,

A+, A+ on standalone basis). Only chemical company whose credit ’ratings’ and ‘outlook’ have never been downgraded

• Consistent delivery of high profitability and cash flow generation. Cash flow from operations in H1-2013 was $8.4 bln

• Prudent and conservative record of balance sheet management – total asset base is the largest in global petrochemical industry

Global footprint and diversified operations• Wide range of products across 6 strategic business

units: Chemicals, Polymers, Performance Chemicals, Fertilizers, Metals, and Innovative Plastics

• Around 60% of consolidated sales conducted through international subsidiaries in Europe, Asia and Americas

World-class operational standards• Global supply chain center of excellence• Focus on manufacturing excellence and sustainability• Global marketing network and distribution platform• Strong customer franchise with network in over

100 countries• Focus on safety, environmental standards,

and compliance

Growing focus on technology & innovation• Over 1,500 scientists and researchers at 17 Technology,

Innovation and Application Centers worldwide• Over 3,000 issued patents and over 5,600 pending patent

applications worldwide• Over 1,000 registered trademarks, globally

KSA assets - lowest cost quartile• Economies of scale• Competitively priced feedstock• Proximity to end markets• World-class leading edge infrastructure

Strong and stable shareholder• Kingdom of Saudi Arabia (Aa3/AA-/AA-)• Strategic asset for the Kingdom• Access to competitive funding• Access to competitively priced feedstock

Globally, SABIC is the most profitable petrochemical company

Global leadership positions *• # 1 producer of MTBE and Mono Ethylene Glycol• # 1 producer of Polycarbonate• # 1 exporter of Granular Urea• # 2 producer of Methanol• # 3 producer of Polyethylene and Polypropylene

SABIC… a global player

* Source: IHS & ChemSystems

No. 4

Rubber tire:PBR & Carbon Black

Seats:Polyurethane

Light shield:Polycarbonate

Electrical parts:POM (PolyAcetal Monomer) / DOP

Exterior parts: Carbon Fiber (potential),

Polyurethane

Anti-freezeEthylene Glycol

Lubricants:LAO and Ethoxylates

Paints and coatings: Acrylates, OXO , MMA, Polyurethane & Ethoxylates

Powertrain body & chassis:Metals

Exterior parts:Plastics, Polyurethane

Structural panels: Polyurethane,

Plastics

Rubber:Hoses, belts

Electronics:Acrylonitrile Butadiene Styrene

(ABS), Polyurethane

Exterior parts: Polycarbonate

Light shield:PMMA

Rubber seals:EPDM

SABIC Chemicals and Polymers enable auto industry

No. 5

POWER

Saudi Arabia HYDROCARBON RESOURCES

Enablers

WATER REFINING METAL Basic Chemicals

Downstream ChemicalsSpecialized Industrial

Parks provide materials and

services

Auto industry

Household industry

Non fossil fuel energy industry

Packaging industry

Major industrial footprint in Saudi Arabia

No. 6

Engineering Plastics Park (POM, PMMA, Acrylonitrile Butadiene Styrene (ABS), Polycarbonate)

Metals Park Rubber Park (tire & rubber goods)

Carbon Fiber Park Polyurethane Park (seating & insulation)

Additives Park (fuel, lubricants and construction)

Paints and Coatings Park

The specialized parks will produce parts and finished materials for wide ranging industrial applications in Saudi Arabia for consumption by local, regional and international markets

Personal care and Detergents

Opportunities for specialized industrial parks

No. 7

Middle East (including GCC & Turkey)20%Parks’ finished

products output

Europe12%

AFRICA11%

Local (KSA)57%

Revenue expected to be $2.6 trillion by 2020 - considered an attractive region for future investment (based on EY’s survey, 2011)

Industrial parks to market in the region and internationally

No. 8

RUBBER INDUSTRY OVERVIEW

Tires

Hoses

Seals

Engine belts

Conveyor belts

END APPLICATIONS

Primary raw materials

Utilities

Nat/Syn rubber

CBlack/Fillers

Fine Chem

Process Oil

Electricity

Steam

Machinery

Mixing

Tires

MRG

Steel cord

Fabric

Molds

Wire/Fabric

Metal Inserts

Semi finished rubber (sheet etc)

Testing Institutes

WarehouseDistribution

Scrap and Recycling

New Sales

Service/Repair Mold & Dies Engineering designs (CAD/ CAM)

Info Centers

Trade Association

Sales Marketing

T&I; applications know-how

Rubber park……an example

No. 9

Running Businesses Location    Ethoxylates JubailEthanolamines JubailLAO Jubail2-EH JubailDOP JubailiBAL JubailAcetic Acid Jubail

Projects Location    Natural Alcohols JubailMDI JubailTDI JubailPolyether Polyols-MEA JubailHexene –I Jubailn-Butanol JubailPBR JubailCarbon Black JubailEPDM JubailBR JubailTPE JubailPMMA JubailPOM JubailACN JubailMMA JubailAcrylic Acid JubailButyl Acrylate Jubail2-EH Acrylate JubailMethyl Acrylate JubailNaCN JubailCarbon Fiber Yanbu

SABIC’s Performance Chemicals to support downstream industries

No. 10

Saudi Arabia plans to invest $70 bln to further develop the petrochemcial landscape, including the downstream sectors:

► development of vast chemical complexes next to oil refineries in order to facilitate the downstream sector

► public companies making way for privately held firms in the sector

► Besides world-class industrial cities in Jubail and Yanbu, construction of KAUST, Jazan Economic City, Yanbu, enhancing the infrastructure capacity and resources…..to support the downstream petrochemcials

Jazan Economic City

Future landscape of Saudi downstream petrochemcials

No. 11

► estimate $70 bln investment in the Saudi downstream petrochemicals► broad range of funding opportunities for local and international investor base► lenders favorably look at such robust projects► typical funding mix for petrochemicals downstream projects would entail:

Debt60-70%

Equity30-40%

Capital Markets Local and intl.

Bank Debt Export Credit

AgenciesGovernment

Funds • Public

Investment Fund (PIF)

• Saudi Industrial Development Fund (SIDF)

• Project and country specific

• Local and international banks often participate in syndicate loans

• Project Bond/Sukuk issuances

$70 bln investment in downstream sectors…financing considerations

No. 12

► SABIC products provide leadership in quality and security of supply

► Technology and Innovation capabilities: 18 technology, application and innovation centers worldwide – unmatched T&I capability in the Middle East

► Specialized technical institutes to support specialized parks, such as High Institute for Elastomers Industries (HIEI) and the Higher Institute for Plastics Fabrication (HIPF)

► Strong global connections and relationships with industries and investors

► SABIC itself is a customer for $12 bln of industrial materials and services

► Strong ‘on-ground’ project engineering and execution capabilities SABIC has executed multi-billion $ world-class and best-in-class projects

SABIC inspires investment & partnerships in downstream industries

Diversification into downstream industries ….

a national priority with international opportunities

No. 13

The date of this presentation is September 17, 2013

This presentation has been prepared by Saudi Basic Industries Corporation (SABIC). No representation or warranty is given or to the accuracy or the completeness of the information contained herein. This presentation is confidential and is being submitted to selected recipients only.

If handed out at a physical roadshow meeting or presentation, it should be returned promptly at the end of such meeting/presentation. It may not be reproduced (in whole or in part), distributed or transmitted to any other person without the prior written consent of SABIC.

This presentation contains forward looking statements. The words “believe”, “expect”, “anticipate”, “intend” and “plan” and similar expressions identify forward-looking statements. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding business strategy, plans and objectives, are forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the markets and economy present and future business strategies and the environment in which the investors will operate in the future.

Further, certain forward-looking statements are based upon assumptions of future events which may not prove to be accurate. The forward-looking statements in this document speak only as at the date of this presentation and SABIC assumes no obligation to update such forward-looking statements.

Disclaimer

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