In my capacity as Chairman and Managing Director and on behalf of my fellow Board Members, Deputy Managing Directors and all the employees in the company, it gives me pleasure to introduce for you the Twenty-eighth annual report of Petrochemical Industries Company for the fiscal year 2007/2008 ended on 31 March 2008. Whereas, we brief the most important actions that have been carried out according to KPC’s Strategic directions for the petrochemicals sector which have been approved by the Supreme Petroleum Council. Considering the future expansion of petrochemical industry, the ambition of the company to be One of the leading international player, the importance of this growing industry and to be competitive, the Company has concentrated on the petrochemical products with higher growth rates such as olefins and Aromatics. In addition, we have considered involvement of the private sector in this industry and to capture Benefits of Refinery-Petrochemicals integration with KPC operations inside and outside the State of Kuwait.

The big projects of the company and its new participation have happened as a result of the success that Has been achieved by the company through its different ventures, which are represented by the following:

Participating companies: 

1. The Kuwait Aromatic Company (TKAC)

2. The Kuwait Olefins Company (TKOC)

3. The Kuwait Styrene Company (TKSC)

4. EQUATE Petrochemicals Company

5. Gulf Petrochemical Industry Co. in Kingdom of Bahrain

6. Equipolymers (Headquarter in Switzerland)

7. PIC Canada

8. MEGlobal Canada Inc.

9. MEGlobal B.V. (Headquarter in Dubai)

10. Al-Qurain Petrochemicals Industries Company

The future expansions outside Kuwait:

The future expansion consists of a project for setting up a refinery and petrochemicals complex in China. We have finished the study of the Chinese and international markets, conducted by an international marketing consultant. Further, we have finished the feasibility study for the project which has been conducted by the Chinese engineering companies and we are working to present the final results from the study. Another expansion opportunity consists of an international joint venture for olefins. For this we have signed a Memorandum of Understanding on 13/12/2007 with DOW Chemical Company for setting up an international joint venture in olefins which will be a market leader in the manufacturing and marketing of polyethylene, Ethylene Amines, Ethanolamines, polypropylene and polycarbonates.

 • The net profit of the company is KD 226 million during the fiscal year 2007/2008. During the fiscal year 2007/2008, production of ammonia was 603,000 metric tons, production of urea was 935,000 metric tons and production of polypropylene was 105,000 metric tons.

 • To support our interest in integration between the refinery and petrochemical operations, we have completed a specialist consultant study for establishing a system and mechanism for determining future opportunities in this field. The Study was conducted jointly with KPC and our associate companies.

 • In the field of safety, health and environment, the company has continued its efforts by carrying out many purposefulprojects such as implementing a project for separation of waste paper in the company and reducing the solid wastes by more than 30%. The numbers of environmental accidents have been reduced by more than 30%. We have achieved 8 million safe work hours till the end of March 2008.

 • Efforts have been continued in the field of information technology, by carrying out several improvements in the services introduced to support the different activities of the company and to eliminate any obstacles in achieving these objectives.

• Considering the future direction of our business expansion in petrochemicals, through local and international ventures, it was decide to adopt the product based organization structure for Head Office. The transition to the new structure was made in November 2007 for the Planning, Financial and Administrative Affairs Sectors and new SBUs created for Olefins, Aromatics and Fertilizer Sectors.

• The company has continued its efforts to complete some important internal projects such as the Enterprise Risk Management System. Formation of risk assessment service has been completed for the new organizational structure of the company. The risk catalogue is prepared, containing all the risks that may be faced by the company and giving its available solutions. Business Process Improvement (Six Sigma Project) is considered as one of the important projects which has lead to increasing the company profits, reducing the cost, achieving job satisfaction for the employees and improving the services introduced for them. 

• With regard to manpower development, the training participation for the year 2007/2008 has a noticeable increase as the number of training participants was 1671 in 435 training programs. This participation is 13% higher than the 1477 planned. As a result of reorganizing in the company the number of actual manpower has become 614 employees, including 464 Kuwaiti employees comprising 75.6% of total manpower. The company is following with great attention the plan of replacement and 10 jobs have been replaced during this year.

• The company has continued its media awareness campaign about petrochemicals industry development inside Kuwait through participation in special exhibitions inside and outside Kuwait, as well as the periodical publishing of Kemya magazine.

• At the end of this report, I and my fellow Board Members, Deputy Managing Directors and all the employees in the company convey their great appreciation and thanks to

His Highness the Amir of Kuwait,

His Highness the Crown Prince

And

His Highness the Prime Minister,