SABIC Marketing Strategy 2024: A Case Study

SABIC, a global leader in the petrochemical industry, has established a comprehensive marketing strategy for 2024. With over 45 years of experience in defining the future of petrochemicals, SABIC aims to be the preferred world leader in chemicals by delivering exceptional products and services to its customers.

At the core of SABIC’s marketing strategy is a focus on customer orientation, competitor orientation, and technological orientation. By understanding the evolving needs of its customers, SABIC collaborates closely with them to develop innovative and tailored solutions that help them achieve their goals.

In line with its commitment to sustainability, SABIC’s marketing strategy emphasizes the importance of long-term investments and business partnerships. The company aims to create a circular economy by working with partners across the entire value chain to develop plastic ecosystems, promote recyclability, and reduce carbon footprint.

SABIC’s marketing strategy targets industries such as agriculture, automotive, building and construction, consumer goods, electrical and electronics, hygiene and healthcare, industrial, mass transportation, and packaging. The company’s products play a crucial role in making cars and planes more fuel-efficient, conserving water supply, and creating colorful smartphone cases.

As the 6th largest producer in the petrochemical products market, SABIC operates in six strategic business units: polymers, basic chemicals, intermediates, specialty products, fertilizers, and metals. These business units enable SABIC to cater to major industries such as automotive, construction, healthcare, packaging, and consumer goods.

Key Takeaways:

• SABIC aims to be the preferred world leader in chemicals through its marketing strategy for 2024.
• The strategy focuses on customer orientation, competitor orientation, and technological orientation.
• SABIC collaborates closely with customers to understand their evolving needs and deliver innovative solutions.
• Long-term investments and business partnerships are prioritized to promote sustainability and circular solutions.
• The company operates in six strategic business units and targets various industries for market expansion and diversification.

The Vision and Mission of SABIC

SABIC, a global leader in the chemical industry, operates with a clear vision and a strong sense of purpose. The company’s vision is to be the preferred world leader in chemicals, delivering innovative products and solutions that matter. In line with this vision, SABIC aims to transform into a higher growth, sustainability-driven, more resilient, and more agile chemical company.

Aligned with the Saudi Vision 2030, SABIC’s mission is to provide quality products and services through innovation, learning, and operational excellence. The company strives to create value across various stakeholders, including shareholders, customers, employees, regulators, suppliers, and local communities. SABIC’s mission drives its marketing strategy, which prioritizes driving profitable growth, accelerating sustainability and innovation, maintaining financial excellence, enhancing operational resilience, and prioritizing employee well-being and culture development.

As part of its commitment to sustainability, SABIC has set ambitious targets. The company aims for a 30% reduction in absolute greenhouse gas emissions by 2030 to support its Carbon Neutrality pledge. SABIC recognizes the growing pressure on the industry to address plastic waste and reduce greenhouse gas emissions in manufacturing processes.

To achieve its vision and mission, SABIC has implemented strategic initiatives and restructured its business units. In 2015, the company transitioned from six Business Units to three Strategic Business Units (SBU) – Petrochemicals, Agri-Nutrients, and Specialties. This transformation program enables SABIC to focus its efforts on key growth markets and enhance its customer-centric approach.

SABIC’s Petrochemicals SBU targets growth markets such as automotive, construction, healthcare, and packaging. The Agri-Nutrients SBU aims to become the national agri-nutrients champion and a global leader in this industry, while the Specialties SBU focuses on providing specialty plastics with a strong emphasis on differentiation, sustainability, and speed to market.

SABIC’s strategic pillars – Customer Focus, Market Focus, Operational Excellence, Innovation and Technology, Portfolio Management, Transformation, Localization Engine, and Environmental, Social and Governance (ESG) – guide the company’s business strategy. By addressing customer and market needs, delivering innovative products and solutions, advancing technology and innovation, and sustaining a commitment to sustainability, SABIC aims to realize its vision.

Financial Performance

SABIC’s commitment to financial performance is evident in its efforts to drive revenue growth and profitability. Despite facing challenges in the chemical industry and global supply chains, the company has maintained its market share globally, showcasing its resilience and adaptability.

In 2023, SABIC’s full-year revenue amounted to SAR 141.54 billion, reflecting a 23% decline compared to the previous year. This decline can be largely attributed to non-cash losses from non-continuing operations, resulting in a total net income of SAR -2.77 billion, contrasting with the previous year’s achievement of SAR 16.53 billion.

However, SABIC’s financial performance is not solely determined by revenue. The company continues to invest in strategic projects to drive future growth. For instance, it made a positive investment decision of $6.4 billion for the SABIC Fujian Petrochemical Complex, a joint venture in China. This complex is expected to have an annual ethylene capacity of up to 1.8 million tons, further expanding SABIC’s presence in the market.

SABIC’s commitment to innovation is also reflected in its collaborative efforts with industry leaders. The joint project between SABIC, BASF, and Linde aims to develop electrically heated cracker furnaces to reduce CO2 emissions. This project reached a significant milestone with the installation of the last transformers, marking a step forward in sustainable manufacturing.

Furthermore, SABIC has actively contributed to the circular economy by producing the Middle East and North Africa region’s first ISCC+ certified polymers from chemically recycled plastic waste. This demonstrates the company’s commitment to environmental sustainability and responsible resource management.

In recognition of its innovative solutions and ethical practices, SABIC received multiple awards in 2023, including the Edison and R&D 100 awards for its contributions to the industry. Additionally, it earned the Compliance Leader Verification™ for 2024 and 2025 from Ethisphere, further validating its commitment to corporate ethics.

Despite the challenges faced, SABIC’s dedication to financial performance remains unwavering. The company strives to maximize returns through business transformation while addressing market challenges. By integrating its Annual Report, Sustainability Report, and Financial Statements into one comprehensive document for 2023, SABIC emphasizes transparency and accountability to its stakeholders.

For a more detailed look at SABIC’s financial and non-financial performance in 2023, interested readers can access the company’s Integrated Annual Report with a GRI content index at https://www.sabic.com/en/reports.

Customer Satisfaction

A central aspect of SABIC’s marketing strategy is prioritizing customer satisfaction. The company is dedicated to understanding and meeting the evolving needs of its customers, including major players in industries such as automotive, construction, healthcare, packaging, and consumer goods. Through market research and close collaboration, SABIC develops valuable products that address customer pain points and deliver desired results.

Investing in Customer Experience

SABIC recognizes that customer satisfaction is crucial for long-term success and growth. The company invests significant resources in enhancing the customer experience. By aligning its business with the United Nations’ Sustainable Development Goals, SABIC demonstrates its commitment to responsible practices that promote customer satisfaction and sustainability.

In addition to its sustainability efforts, SABIC collaborates with global communities and supports customers with innovative solutions, especially during challenging times such as the COVID-19 pandemic. The company’s investment of over US$ 53 million towards addressing COVID-19 demonstrates its dedication to both CSR initiatives and meeting customer needs.

Delivering Customer-Centric Solutions

SABIC’s goal is to become the preferred world leader in chemicals by engaging new audiences and developing breakthrough solutions. The company’s success in brand recognition and ranking is a testament to its ability to connect with customers and stakeholders in meaningful ways.

Through market research and feedback, SABIC continuously improves its products and services to ensure customer satisfaction. Results of a customer satisfaction survey for SABIC Engineering Services revealed areas for improvement, with complaint resolution being highlighted as the least satisfied factor. Simplified procedures and policies were recommended to enhance service delivery and resolve customer issues effectively.

An Ongoing Commitment

In order to better understand customer needs and measure satisfaction levels more precisely, SABIC plans to conduct further surveys with a wider range of customers. This commitment to data-driven decision-making will enable the company to make necessary improvements and continuously enhance customer satisfaction.

By prioritizing customer satisfaction and leveraging market research insights, SABIC positions itself as a trusted partner and delivers tailored solutions that foster brand loyalty and trust. The company’s dedication to addressing customer needs ensures its long-term viability and solidifies its position as a responsible corporate citizen.

Operational Efficiency

SABIC is committed to achieving operational efficiency in all aspects of its business, driving continuous improvement and delivering cost-effective solutions to its customers. By optimizing processes, improving productivity, and reducing costs, SABIC enhances its competitiveness in the global market.

Through its continuous improvement initiatives, SABIC has made significant progress in streamlining its operations and maximizing efficiency. The company has achieved an overall implementation progress of 48% in its five-year plan to address performance killers. This plan aims to avoid a production loss of 4.6 million metric tons (MMT) by 2026.

One of the key metrics that demonstrate SABIC’s commitment to operational efficiency is the Asset Performance Index (APi). From 2021 to 2022, SABIC has improved its APi by 2.4%, increasing it from 75.5% to 77.9%. This increase in APi has contributed to a 1.4% improvement in plant reliability, ensuring smoother operations and reducing downtime.

SABIC is also actively implementing real-time optimization technology at its olefin plants, with an overall implementation progress of 35% in its three-year program. This technology optimizes processes and enhances efficiency, allowing SABIC to operate at peak performance levels.

Moreover, SABIC places a strong emphasis on developing the right leadership behaviors that drive operational excellence. The company has exceeded its yearly target, achieving an impressive 80% completion rate in establishing these behaviors as of Q3 2022.

To ensure consistency in operational excellence across all its manufacturing sites, SABIC is working towards completing the Integrated Manufacturing Excellence Assessment (IMEA) initiative by the end of 2023. This initiative aligns processes, procedures, and practices to optimize efficiency and improve overall performance.

As part of its commitment to sustainability, SABIC aims to achieve net-zero emissions by 2050 and reduce greenhouse gas (GHG) emissions by 20% by 2030 compared to its 2018 baseline. The company has already achieved an 8% reduction in absolute Scope 1 & 2 GHG emissions since 2018.

Looking ahead, SABIC plans to capture millions of metric tons of CO2 annually, targeting 2 million metric tons annually by 2030. In line with this, the company anticipates a capital expenditure of US$3–4 billion for energy efficiency, renewable energy, and Carbon Capture, Utilization, and Storage (CCUS) initiatives through 2030.

SABIC’s continuous efforts to enhance operational efficiency through process optimization, productivity improvements, and cost reduction strategies demonstrate its commitment to delivering cost-effective solutions to customers while maintaining sustainable and profitable operations.

The Business Strategy of SABIC

SABIC, a global leader in the chemicals industry, has consistently implemented a growth-oriented approach in its business strategy. The company’s commitment to expansion and diversification has resulted in impressive achievements and a strong market position.

One of the key indicators of SABIC’s success is its brand value, which has experienced remarkable year-on-year growth since 2014. By 2024, SABIC’s brand value reached an impressive US $4.719 billion, reflecting a 1% increase compared to the previous year. This growth has positioned SABIC as the world’s second most valuable brand in the chemicals industry and secured its place among the top 500 global brands. These achievements are a testament to SABIC’s positive market perception and strategic business decisions.

Part of SABIC’s business strategy involves the creation of agile operating models to stay competitive in dynamic industries. Project Transfusion, for example, resulted in the establishment of an agile operating model for SABIC Agri-Nutrients Company, showcasing the company’s commitment to the global agri-nutrients market. This strategic move aligns with SABIC’s ambitious growth plans and its aim to cater to diverse markets and customer needs.

SABIC’s business strategy also extends to its marketing efforts. The company’s Global Advertising Campaign is designed to highlight its commitments to customer performance and reliable relationships, reinforcing its brand positioning and value proposition. This consistent focus on customer satisfaction has contributed to SABIC’s growing brand value and positive perception among key stakeholders.

In addition to its marketing efforts, SABIC’s business strategy incorporates a data-driven approach to financial performance. The company continuously monitors and evaluates key financial ratios such as the current ratio, inventory turnover, collection period, debit ratio, return on sales, and return on total assets. These metrics provide valuable insights into SABIC’s financial health and efficiency, enabling the company to make informed decisions and adapt its strategies accordingly.

SABIC’s commitment to growth and development is further evident in its market expansion and diversification efforts. Operating in seventy-two countries, with 85% of its sales being abroad, SABIC has successfully expanded its presence and market share. The company’s acquisition of General Electric’s GE Plastics business in 2007 was a significant milestone, amounting to approximately $11.6 billion. This strategic move solidified SABIC’s position as a major player in the global chemical industry.

With a strong focus on chemicals and specialty chemicals, SABIC has established itself as the world’s fourth-largest chemical company in terms of sales. These sectors constitute a significant portion of SABIC’s sales and profits, highlighting the company’s expertise and competitive edge. SABIC’s growth-oriented approach has enabled it to navigate through highly competitive markets, leveraging its strengths and maximizing profitability.

Overall, SABIC’s business strategy combines customer-centricity, market expansion, and financial performance to drive growth and maintain a prominent position in the chemicals industry. By continuously adapting and evolving its strategies, SABIC continues to demonstrate its commitment to innovation, customer satisfaction, and sustainable business practices.

SABIC’s Focus Areas

SABIC, a global leader in the manufacture of basic chemicals, fertilizers and nitrogen compounds, plastics, and synthetic rubber, prioritizes customer orientation, competitor orientation, and technological orientation in its business strategy. By focusing on these key areas, SABIC strives to deliver exceptional value to its customers, stay ahead of the competition, and leverage technology for sustainable growth.

Customer Orientation

SABIC’s commitment to customer orientation is evident in its efforts to understand and meet customer requirements. By conducting thorough market research and engaging in active communication with customers, SABIC ensures that its products and services align with their needs and expectations. This customer-centric approach allows SABIC to build strong relationships, cultivate loyalty, and consistently deliver superior solutions.

Competitor Orientation

SABIC recognizes the importance of monitoring competitor actions to stay competitive in the market. By analyzing competitors’ strategies, products, and innovations, SABIC gains valuable insights that shape its own business decisions. This competitor orientation enables SABIC to identify opportunities for differentiation, anticipate market trends, and continuously improve its offerings to maintain a leading position in the industry.

Technological Orientation

In a rapidly evolving business landscape, SABIC embraces technological advances to drive innovation and enhance its competitive advantage. With a strong focus on research and development, SABIC stays at the forefront of emerging technologies, allowing it to develop cutting-edge products and solutions. By integrating technology into its processes and operations, SABIC improves efficiency, accelerates growth, and addresses evolving customer demands.

Through its focus on customer orientation, competitor orientation, and technological orientation, SABIC remains committed to delivering value, staying competitive, and driving sustainable growth in the industry.

Market Expansion and Diversification

SABIC, a leading global diversified chemical company, understands the importance of market expansion and diversification in driving sustainable profitable growth. The company aims to strengthen its core businesses in Petrochemicals and Agri-Nutrients while also focusing on the Specialties business to create innovative product offerings for new growth opportunities.

SABIC’s strategic pillars of Customer Focus, Market Focus, Operational Excellence, Innovation, Portfolio Management, Transformation, and Localization Engine enable the company to explore new markets and cater to the unique needs of various industries.

Target Industries

SABIC caters to a wide range of industries, including automotive, construction, healthcare, packaging, and consumer goods. With a mission to be the preferred world leader in chemicals, the company offers specialized polymers for lightweight components in the automotive industry, high-performance materials for building and construction, innovative plastics for healthcare applications, eco-friendly packaging solutions, and advanced materials for consumer goods.

Through strategic partnerships with renowned companies like Mercedes, Volvo, and SAAB, SABIC serves business buyers in the automotive industry and expands its reach within the European car manufacturing regions.

As the 6th largest petrochemical producer globally, SABIC’s market expansion and diversification efforts contribute to its goal of becoming a preferred supplier and world leader in the chemical industry.

Understanding SABIC’s Customers

SABIC, as a leading global chemical company, caters primarily to business buyers in various industries, including automotive, construction, and packaging. Understanding customer behavior and preferences is vital for SABIC’s marketing strategy, ensuring the development of innovative and sustainable solutions that meet the evolving needs of its customers.

Market research plays a crucial role in gathering insights into customer behavior, industry trends, and emerging market opportunities. By conducting comprehensive market research, SABIC gains a deeper understanding of its customers’ requirements, enabling the company to design products that address their pain points and enhance their business performance.

Furthermore, SABIC fosters strong relationships with its customers, emphasizing trust, transparency, and commitment. This buyer-seller partnership approach allows SABIC to collaborate closely with customers, co-creating solutions and providing tailored support to meet their specific challenges and goals.

With over 2,000 Technology and Innovation (T&I) employees working across 20 centers globally, SABIC invests in extensive research and development to deliver cutting-edge solutions. By closely collaborating with customers, SABIC incorporates their feedback and insights into its product development process, ensuring continuous improvement and innovation.

Customer-Centric Approach

SABIC recognizes that customer satisfaction is key to its long-term success. As a result, the company places a strong emphasis on delivering exceptional customer experiences, superior product quality, and reliable service. SABIC aims to exceed customer expectations by providing comprehensive technical support, timely delivery, and effective after-sales services.

Moreover, SABIC’s focus on sustainability aligns with the priorities of its customers. Through its Product Stewardship team, SABIC ensures that every investment deal is approved based on sustainability compliance and safe chemical practices. This commitment to sustainability resonates with customers who seek partners with similar values and priorities.

In summary, SABIC’s understanding of customer behavior through market research, coupled with its customer-centric approach and commitment to sustainability, enables the company to build strong and enduring relationships with its business buyers. By continuously meeting customer needs and investing in innovation, SABIC remains at the forefront of the chemicals industry, securing its position as one of the world’s most valuable brands.

Buyer-Seller Business Relationships at SABIC

SABIC recognizes the significance of fostering strong buyer-seller relationships as a fundamental aspect of its business strategy. These relationships encompass a range of direct and indirect functions that contribute to the success and growth of the company.

• Direct Functions:

Direct functions in buyer-seller relationships involve offering competitive prices, providing timely delivery of products, and ensuring exceptional customer service. SABIC understands the importance of meeting customer expectations by consistently delivering high-quality products at competitive prices. By establishing direct functions, SABIC aims to build trust, loyalty, and long-term partnerships with its customers.

• Indirect Functions:

Indirect functions in buyer-seller relationships include market support and collaborative innovation. SABIC strives to support its customers in various areas, such as marketing assistance, market research, and technical expertise. These indirect functions aim to enhance the overall business performance of SABIC’s customers and strengthen the partnership between the two parties.

SABIC’s emphasis on buyer-seller relationships stems from its commitment to customer satisfaction and achieving mutual success. By prioritizing direct and indirect functions, SABIC ensures that its customers receive the necessary support and resources to thrive in their respective industries.

Through these buyer-seller relationships, SABIC creates a collaborative ecosystem that fosters innovation, enables growth, and drives industry advancements. This interconnectedness benefits both SABIC and its customers, facilitating a mutually beneficial business environment.

SABIC Case Study: Watermanagement Performance and Reliability

SABIC partnered with BWT Wassertechnik GmbH to address the watermanagement challenges faced by the industry. Through a comprehensive case study, SABIC demonstrated its expertise in improving the performance and reliability of water management systems.

During the transition to NORYL FE1630PW resin for softening valve housing, BWT Wassertechnik GmbH experienced failure modes under burst and cyclic pressure testing. Leveraging advanced 3D simulations and testing at the Water Management Center of Excellence, SABIC helped predict two specific locations of part failure under these conditions.

With this valuable insight, SABIC made design modifications to enhance the part’s performance and reliability. By adding a rib to relieve hoop stress, the stress at the original critical failure location was reduced by a factor of 2.5x. This modification enabled BWT Wassertechnik GmbH to meet their quality specifications for lifetime performance, boosting customer satisfaction.

Furthermore, SABIC’s Predictive Engineering Services played a crucial role in improving BWT’s confidence in their part design. By accurately identifying failure modes, SABIC reduced the need for iterative and physical part testing, ultimately decreasing overall engineering design costs.

The success of this case study highlights the effectiveness of SABIC’s predictive engineering capabilities and commitment to delivering superior watermanagement solutions. By collaborating with industry leaders like BWT Wassertechnik GmbH, SABIC continues to push the boundaries of performance and reliability in water management systems.

Cost Savings in Ultrasonic and Electromagnetic Water Meters

SABIC’s dedication to innovation extends beyond softening valve housing. The use of SABIC’s GF Noryl in ultrasonic and electromagnetic water meters has proven to be highly advantageous, resulting in significant cost savings. Compared to incumbent thermoplastics, GF Noryl offers cost-savings of 15% to 20%. Moreover, when compared to metal water meters, the savings soar over 50%.

Longevity and Market Growth

Water meters using GF Noryl have a lifetime expectation of 12 to 15 years, showcasing the durability and reliability of this advanced material. As the market segment for solid-state water meters experiences rapid growth, with some areas reporting Compound Annual Growth Rates (CAGR) of over 10%, SABIC’s GF Noryl is poised to drive further innovation and meet the evolving needs of the water management industry.

Performance Compared to Incumbent Materials

Currently, the main materials used in water meters are brass and premium semi-crystalline materials such as GF PPA, GF PPS, and GF nylon 12. SABIC’s 30% GF Noryl PPO (Noryl WM330G) is positioned as a comparable alternative to these incumbent materials in terms of strength and performance. Through rigorous research and development, SABIC designed a prototype that meets the stringent OEM requirements, aiming to convince industry players that Noryl resin is a suitable material for solid-state water meters.

Optimized Processing for Enhanced Performance

To achieve the best performance with Noryl resin, SABIC recommends optimizing the injection molding process. This includes higher melt and mold temperatures, increased packing pressures, longer packing times, and the use of a hot runner system to prevent voids and achieve strong weld lines. By implementing these processing parameters, SABIC was able to significantly improve the performance of parts made from Noryl resin, enhancing burst and fatigue resistance in water meters.

Contributing to a Circular Economy

SABIC’s commitment to sustainability is evident not only in their water management solutions but also in their approach to PET bottle recycling. As one of the most common types of plastic used in single-serve bottles for water, soft drinks, and juices, PET is globally recognized as a safe and recyclable packaging material. SABIC emphasizes the importance of PET recycling, reprocessing used plastic into new reusable forms and creating new products from recycled materials, contributing to a circular economy.

Investment Opportunities and Profitability

Entrepreneurs looking to invest in the PET bottle recycling business will find promising opportunities for profitability. The PET bottle recycling industry offers profitable projects for small-scale businesses, particularly in countries like India. Starting a PET bottle recycling business not only aligns with the growing demand for sustainable practices but also presents a lucrative investment opportunity.

With its groundbreaking case studies and innovative solutions, SABIC continues to demonstrate its leadership in the water management industry. Through collaborations, advanced simulations, and optimized processing techniques, SABIC consistently delivers on its promise of performance and reliability.

Conclusion

In conclusion, SABIC’s marketing strategy is a testament to its commitment towards driving profitable growth while prioritizing sustainability and innovation. By transitioning from six Business Units to three Strategic Business Units in 2015, SABIC has strategically positioned itself to expand its presence in fast-growing regions and cater to diverse markets such as automotive, construction, healthcare, packaging, and consumer goods.

With Saudi Aramco acquiring a majority stake in SABIC, the company has solidified its position as the national champion in the chemicals industry. Additionally, the consolidation of the Agri-Nutrients division into the SABIC Agri-Nutrients Company showcases SABIC’s dedication to sustainable growth and diversified agrinutrient solutions.

As a standalone entity, SABIC’s Specialties SBU is focused on becoming a leading player in specialty chemicals by providing innovative solutions. The company’s emphasis on sustainability is evident in its commitment to reducing greenhouse gas emissions, implementing renewable energy partnerships, and striving towards a circular economy.

Overall, SABIC’s strategic direction, customer-centric approach, and continuous pursuit of excellence have positioned it among the top companies in petrochemicals manufacturing. With a global reach and a strong financial performance, SABIC continues to drive forward, setting new benchmarks for the industry.