Saudi Chemanol announced its intention to acquire significant ownership stakes in two leading chemical firms.
Saudi-based Methanol Chemicals Co., commonly known as Chemanol, has unveiled its strategy to diversify its product portfolio through the acquisition of controlling stakes in two chemical firms. The company aims to expand its presence in the specialty chemicals market and strengthen its business segments that are not influenced by feedstock prices and market cycles.
Chemanol recently announced the signing of a binding offer to acquire 80 percent ownership of Global Co. for Chemical Industries Ltd, as per its disclosure to the Saudi Stock Exchange (Tadawul). Additionally, the company confirmed its plan to acquire 84 percent of ADDAR Chemicals Co. These strategic acquisitions align with Chemanol’s expansion plans and strategic objectives.
The specific financial details of the two deals have not yet been disclosed, as a comprehensive evaluation will be conducted based on the outcomes of the financial and legal assessments. However, the acquisitions signify Chemanol’s commitment to diversifying its business operations and tapping into new growth opportunities within the chemical industry.
The agreement with Global Co. for Downstream Industries follows a previous strategic collaboration between Chemanol and the downstream-focused company, which entailed a significant agreement valued at SAR 500 million ($133 million). This collaboration further solidifies the relationship between the two entities and emphasizes Chemanol’s dedication to expanding its presence in the chemical sector.
Despite a 15.4 percent year-on-year decline in net profits after zakat and tax, totaling SAR 206.4 million in 2022 compared to SAR 244 million in 2021, Chemanol remains optimistic about its financial performance. The company’s revenues for 2022 amounted to SAR 1.07 billion, indicating a 6.66 percent increase compared to the previous year’s revenue of SAR 1 billion, as reported in its annual income statements.
While the financial details of the deals have not yet been disclosed, the final valuation will be determined through comprehensive financial and legal evaluations. Chemanol’s emphasis on conducting thorough assessments underscores its commitment to ensuring that the acquisitions align with its strategic goals and offer value to the company.
The agreement with Global Co. for Downstream Industries builds upon the existing partnership between the two companies. The strategic collaboration, valued at SAR 500 million ($133 million), further solidifies their relationship and sets the stage for future growth and cooperation.
Despite a slight decline in net profits in 2022 compared to the previous year, Chemanol remains confident in its financial performance. With revenues of SAR 1.07 billion for 2022, representing a 6.66 percent year-on-year increase, the company continues to demonstrate resilience and a commitment to sustainable growth.
These acquisitions mark an important milestone for Chemanol as it positions itself as a key player in the chemical industry. By expanding its presence in the specialty chemicals market, the company aims to capitalize on emerging opportunities and strengthen its competitive advantage.
Chemanol’s strategic expansion plans align with Saudi Arabia’s broader vision of diversifying its economy and reducing reliance on oil. As the country seeks to develop its domestic industries, Chemanol’s acquisitions exemplify its contribution to the localization of the chemical sector and the overall growth of the Saudi economy.
Moving forward, Chemanol will focus on integrating the newly acquired companies into its operations, leveraging synergies, and capitalizing on the strengths of each entity. By harnessing the expertise and resources of Global Co. for Chemical Industries Ltd and ADDAR Chemicals Co, Chemanol aims to drive innovation, enhance operational efficiencies, and deliver value to its customers and stakeholders.
With its strategic acquisitions and commitment to growth, Chemanol is well-positioned to shape the future of the chemical industry in Saudi Arabia and further strengthen its position as a leading player in the global market.
With these strategic acquisitions, Chemanol is well-positioned to strengthen its market position, diversify its product offerings, and capitalize on the opportunities presented in the specialty chemicals sector. The company’s expansion plans align with its long-term vision and commitment to sustainable growth within the dynamic chemical industry.
