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Basic Chemical Industries Company (BCI), one of the largest privately owned chemical producers in Saudi Arabia, has increased for the second time the cost of building a new chorine and derivatives plant due to high construction costs, the company said in a bourse statement.
Work on the facility in Jubail Industrial City has been significantly delayed due to the operational difficulties posed by the coronavirus pandemic.
The new project cost is now pegged at 750 million riyals ($200 million) up from the previous estimate of 685 million riyals. The cost of implementing the project was previously hiked from 520 million riyals to 685 million riyals.
“The reasons for the increase in costs are due to the addition of some facilities necessary for the project and the high cost of construction,” the company told the Saudi Stock Exchange (Tadawul).
The GCC construction industry has faced some serious setbacks due to the health outbreak.
As of December 2020, around 550 projects in the region, estimated to be more than $60 billion, were believed to have been postponed, delayed or cancelled since March, according to Argus Media, an energy information provider. Most of these projects are in Saudi Arabia and UAE.
BCI’s chlorine and derivatives plant is now expected to complete in November 2021. The chemical producer had earlier set the completion in 2020.
BCI reported a net profit of 14.4 million riyals for the three months ending May 20, 2021, down by 4.3 percent compared to the same period last year.
(Writing by Cleofe Maceda; editing by Seban Scaria)
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© ZAWYA 2021
