Kuwait-based Equate Group, a global producer of petrochemicals, has announced a total net profit of $679 million for the fiscal year ending December 31, 2016.

The Equate Group combines Equate Petrochemical Company, its subsidiaries, and The Kuwait Olefins Company.

“At all levels, 2016 was an extremely difficult year with prices dropping by more than 14 per cent and the feedstock was limited during the first half of the year for our Group as a whole,” said Mohammad Husain, Equate Group’s CEO.

“Despite these difficulties, the group made several achievements; we became the world’s second largest producer of Ethylene Glycol (EG) with a total production capacity of 2.4 million metric tonnes annually (mtpa). We made excellent progress on our new 750,000 mtpa EG plant in the US Gulf Coast (USGC) with advantaged feedstock. Construction commenced in the fourth quarter of 2016. The project is on time, on budget, and will be ready to start our operations during 2019.”

“The petrochemical market witnessed several challenges during 2016. Despite those developments, the Group, with strong focus on operational efficiency and cost control, was able to maintain its solid profitability and cash flow, achieving $1.2 billion Ebitda and an Ebitda margin of 33 per cent,” noted Husain.

On the outlook for the petrochemical industry in 2017, Husain said, “Despite high feedstock limitation in some of our locations and fluctuating oil prices, impacting all other business sectors, we expect demand for our products to increase 4.5 per cent for PE and 4 per cent for EG.”

“Our two main focus areas are completing our USGC EG plant on time in 2019, and achieving maximum operational efficiency through the holistic integration of MEGlobal,” Husain said, commenting on Equate Group’s current strategic focus.

“These steps are critical for our strategic expansion plans as an international petrochemical enterprise with operations in Kuwait, the Americas and Europe. In addition, towards the end of 2017, we will have a major turnaround for our Kuwait-based plants, which will include ethylene, ethylene glycol and other units. It will be one of the biggest TAs for petrochemicals in the Middle East & Africa,” he added.