US Gas Boom Is a Threat: Sabic CEO

Monday, 27 May 2013 | 11:24 AM ET
Mohamed Al-Mady
Nelson Ching | Getty Images
Mohamed Al-Mady

The U.S's gas boom is both a threat and an opportunity, the head of Saudi Basic Industries Corporation (Sabic), one of the world's top petrochemical companies, told CNBC.

(Read More: US Energy Boom Is Great, Unless You're the Saudis)

Sabic CEO: Demand for Petrochemicals Is Weak
Mohamed Al-Mady, CEO of Sabic, tells CNBC that for the last year demand for petrochemicals is not increasing that much.

Speaking from the World Economic Forum in Jordan, CEO Mohamed Al-Mady said the uptick in shale gas production in the U.S. would provide "more severe competition" for Riyadh-based Sabic.

"It is a threat of course, because they will export their product," he said, but added that his company could invest in U.S. shale gas.

(Read More: Shale Gas Could Be UK's New North Sea: Report)

Al-Mady said Sabic was also vulnerable to the slowdown in China, the world's second biggest economy and the main importer of Sabic products. Al-Mady forecast the Chinese economy would increase modestly for two years, after which growth would improve.

As a result, Al-Mady said Sabic was solidifying its position in Saudi Arabia, as well as investigating new markets in western and central China.

However, he added that India does not yet represent competition for China as a market for petrochemicals.

"India has not really succeeded in building a petrochemical industry like China… There is a huge opportunity, but the Indian government has to attract investment and show it is ready for petrochemical manufacturing," said Al-Mady.

(Read More: The Dollar a 'Commodity Currency'? It Just Might Happen)

—By CNBC's Katy Barnato


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