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View Annual Report INSPIRING NEW POSSIBILITIES ANNUAL REPORT 2014 A FUTURE OF CHANGE By 2050, another 2.5 billion people are expected to be living on our planet. It is the equivalent of adding twice the population of India, itself the world’s second most populous country. What’s more, two thirds of all the world’s people will be living in cities, posing unique infrastructure challenges for African and Asian countries, where most of the growth is predicted to take place. This dramatic shift presents the world with many challenges. How do we provide the food, buildings, energy and transportation that people need? How do communities provide clean and safe drinking water? What materials should we use to construct these new megacities? The answer is innovation. It is something that SABIC does every day, all around the world. With new materials, smart solutions and better ways of working, we can provide solutions that help in addressing these challenges to help create a better future for everyone. In 35 years’ time, the world will be a different place. At SABIC, we believe that despite the many challenges THE WORLD IN that society faces today, it can be a better place tomorrow. We have an unshakable faith in the power of human potential and technological innovation to create improved conditions for living. Imagine a world where precision agriculture delivers better crop yields from less land. Where high-tech materials enable clean, renewable energy to be the principal source of power for our cities and homes. 2050 Where low-cost personal transport takes you wherever you want to go, whenever you want. This is the vision that we work towards every day at SABIC. ENERGY CHALLENGES 3 BILLION VEHICLES FREQUENT FLYING MORE PEOPLE HI-TECH FARMING WATER WISE MORE FOOD FAILING INFRASTRUCTURE How do we support the There could potentially We will all fly more. The global population How do we reduce A 55% rise in demand As the population As our cities grow, growing demand while be double the number How can we do will grow to over fertilizer wastage in for fresh water will grows, how do we they will need to become also protecting the planet? of vehicles by 2050 and it sustainably? 9 billion and we’ll challenging climates? require ingenious produce more food more resilient and many will be electric all be living longer. solutions. with less land? more technologically or advanced hybrids. advanced. 4 5 FINDING SOLUTIONS TOGETHER Rail interior provider Monte Meão According to Bombardier Project Director Chris Fifield: “Injection-molded seating is the key to a more visually introduced an innovative design impressive interior, providing the strength to withstand DRIVEN BY and manufacturing concept for the use of hundreds of thousands of passengers the seat banks of São Paulo’s new through time and being lighter in weight to reduce INNOVATION energy consumption. When fully operational, this monorail system. system will transport more than 40,000 passengers Kringlan Composites of Switzerland, per hour per direction, so durability is a key SABIC and other industry participants Developed in association with SABIC, the new seating requirement. This solution will also simplify cleaning solution uses injection-molding methods, making it and part-replacement operations.” worked closely together to advance possible to produce durable, lightweight seating in the development of the world’s first less time and at a substantially lower cost. thermoplastic carbon-composite wheel. Monte Meão chose SABIC’s LEXAN™ FST 3403 resin SABIC’S suPPort truly enabled This ground-breaking innovation leverages SABIC’s for its high-impact resistance, the flexibility required ™ to develop attractive designs and its lightweight us to create A seating system proprietary ULTEM resin and Kringlan’s proprietary “ three-dimensional composite-design capabilities. properties. The resin also complies with the most that deParts from traditional stringent fire-safety regulations in the world. Seats APProaches, ONE that will helP This combination creates a solution that can be used made using SABIC’s resin can be up to 15% lighter, to replace traditional materials, such as metal and to transPort the PeoPle of SÃO aluminum alloy, and can result in reduced weight and helping to reduce the monorail’s CO2 emissions. Unlike thermoset solutions, they can also be Paulo comfortably and safely. emissions, lower manufacturing costs and enhanced recycled at the end of the product’s lifespan. recyclability. While the first application of this new FERNANdo CeRqueiRA technology is being introduced in the automotive CEO, MONte MEÃO industry, its potential reach extends to multiple industries where weight reduction is needed, including aerospace and consumer goods. 6 7 CONTENTS 1 Overview and strategy 12 This is SABIC 14 Chairman’S statement 16 Board of Directors 18 A WORLD OF ACHIEVEMENT 2 Our Core Markets 22 TransPortation 26 Agri-Nutrients 30 Construction 34 Medical Devices 38 Packaging 42 Clean Energy 46 Electrical and Electronics 3 OUR commitment 52 SUSTAINABILITY: A FOUNDATION OF OUR 2025 STRATEGY 53 CORPORATE SOCIAL RESPONSIBILITY 54 PEOPLE WHO CAN 56 TECHNOLOGY AND INNOVATION 58 ENVIRONMENT, HEALTH, SAFETY AND SECURITY (EHSS) 59 COMPLIANCE AND RISK MANAGEMENT 60 SUPPLY CHAIN 61 MANUFACTURING 4 OUR businessES 64 Chemicals 65 Performance Chemicals 66 Innovative Plastics 67 Polymers 68 FertiliZers 69 Metals 70 MANUFACTURING COMPANIES 76 GLOBAL DIRECTORY 8 9 1 OVERVIEW AND STRATEGY 1 OVERVIEW 2 OUR CORE MARKETS AND STRATEGY 3 OUR COMMITMENT OUR 3 EVERY DAY, WE APPLY OUR EXPERTISE “IN CHEMICALS AND MATERIALS TO FIND NEW, SUSTAINABLE SOLUTIONS THAT MEET THE CHALLENGES OF TODAY AND TOMORROW. BUSINESSES OUR 4 1 OVERVIEW AND STRATEGY From humble beginnings, we have grown steadily to become one of the world’s most successful chemical us$ us$ us$ THIS IS companies. Among the top producers of polyethylene, polypropylene, advanced thermoplastics, glycols, methanol, and fertilizers, we are also one of the largest producers of steel in the Middle East. Our size and 6.2 50.2 90.7 success are directly connected to our vision and our mission: to be the preferred world leader in chemicals and to responsibly provide quality products and services NET INCOME SALES ASSETS through innovation, learning, and operational excellence (BILLIONS) (BILLIONS) (BILLIONS) SABIC while sustaining maximum value for our stakeholders. 2 OUR CORE MARKETS 3 OUR COMMITMENT OUR 3 4 OUR BUSINESSES OUR 4 2,000 5 10,640 2ND 40,000 50 SCIENTISTS KEY GEOGRAPHIES WITH Patent Portfolio LARGEST DIVERSIFIED EMPLOYEES COUNTRIES INNOVATION HUBS filings CHEMICAL COMPANY 12 13 1 OVERVIEW AND STRATEGY CHAIRMAN’S STATEMENT 2 OUR CORE MARKETS As this future-focused report shows, the years Our commitment to continuous innovation is underlined In the four decades since we ahead will continue to test our abilities to innovate by SABIC’s global network of Technology and Innovation and compete in a market that is changing and centers. In 2014, our new facilities in Riyadh, Jeddah, were founded, our people have evolving rapidly. Shanghai, and Bengaluru were joined by a new center in South Korea focusing on Electronics and Electrical shown time and time again that The title of this year’s annual report, “Inspiring New & Lighting Science and Technology. In these centers, Possibilities”, is a powerful way of summarizing how we are able to work closely with our customers and a combination of innovation and SABIC views the future. We see the many challenges academic partners to create the best solutions to meet of tomorrow as opportunities to apply ingenuity the demands of tomorrow. dedication can create tremendous and creativity within our businesses. At the same time, we believe that our materials, processes, and We know that achieving the 2025 vision that drives impetus and progress. technologies will themselves inspire new possibilities SABIC’s strategy depends on becoming ever closer to that help improve modern life. our customers. We are building a strong reputation for PRINCE SAud biN AbduLLAH the collaborative innovation that is essential to finding biN THENAYAN AL-SAud In this report, we look ahead to the challenges that new solutions to our customers’ problems. CHAIRMAN 2050 will bring. Many of them – from providing food security for a growing population to building This year, we have also oriented our business around new megacities and improving human health – look our seven core Market Segments: transportation, 3 OUR COMMITMENT OUR 3 insurmountable. But SABIC’s founding ethos was about agri-nutrients, construction, medical devices, packaging, overcoming huge obstacles to achieve what seems clean energy and electrical & electronics. These are impossible. And in the four decades since we were the markets that are both engines for global economic founded, our people have shown time and time again growth and the guarantors of modern, sustainable living that a combination of innovation and dedication can standards. In each one, SABIC products are positioned create tremendous impetus and progress. to make a measurable difference, whether by enabling lighter, more fuel-efficient transport, creating better Throughout 2014 we inspired many new possibilities. buildings, or helping reduce food waste. We completed construction of a plant that will transform waste CO2 into fertilizer. We created new This holistic, market-oriented approach provides SABIC plastics and resins grades that will help many different with a powerful focus on our core priorities and will manufacturing industries to achieve more. And smart help drive our goal to be the world leader in chemicals. use of our manufacturing assets is enabling us to do Our talented, inspired, creative and engaged people more with less. continue to create a more competitive company with a more prominent global presence that differentiates SABIC from its competitors and makes impressive efforts towards achieving this ambition. At SABIC we have a deeply held belief in our own capabilities. We rise to every challenge.
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