Sidi Kerir Petrochemicals Company (Sidpec) is looking to import different grades of polymers for local use.
Sidpec’s Board of Directors has called for an Extraordinary General Assembly on 28 January to amend Article 3 of the company’s bylaws. The new amendment is expected to enable the company to import different grades of polymers.
The company noted that through this, it would take advantage of the ongoing international decline in petrochemical prices.
With regards to capital expenditure, the company has already set up premises to receive and store the imported products.
Naeem Research sees that the investment cost would be minimal. Regarding the underlying business, with international prices for high-density polyethylene (HDPE) having touched $1,100/tonne in December, Naeem Research expects Sidpec to be charged a price of $6.0/mmbtu by Gasco for the feedstock mix.
“According to our calculations, this is inclusive of a base-price of $5.5 plus a $0.5 surcharge for the $100/tonne increase in the price of HDPE above $1,000/tonne,” it said, “For now, we maintain our TP on Sidpec at EGP 11.20/share, however, in the case of product prices continuing to sustain at the current levels, our valuation on the stock would be subject to an upside revision.”
Naeem Research added that its calculations indicate that the factory’s cash-cost margin has now jumped to $680/tonne of output sold, boosted by higher prices and the $1.0/mmbtu cut in the feedstock price implemented by Gasco for 2020.