GPIC Annual Report ar 2017 eng

‫التقـــــــــــــــــــرير الســـــــــــــــــنوي ‪2 0 1 7‬‬

‫�شركة اخلليج ل�صناعة البرتوكيماويات �ش م ب (مقفلة)‬

‫‪2 0 1 7‬‬ ‫‪R E P O R T‬‬

‫‪ANNUAL REPORT‬‬

‫‪2017‬‬

‫‪A N N U A L‬‬

‫‪Reflecting a commitment to excellence‬‬

‫اإللـــــــتــــــــــزام بـــــاإلمــــــتـــــــيـــــــــاز‬ ‫التقرير السنوي‬

‫‪2017‬‬

Towards a prosperous tomorrow and a promise of sustainability

P.O. Box 26730, Manama, Kingdom of Bahrain, Tel: (+973) 17 731777 Fax: (+973) 17 731047, E-mail: gpic@gpic.com • www.gpic.com

Gulf Petrochemical Industries Co. BSC (C)

H.M. King Salman bin Abdulaziz Al Saud Custodian of the Two Holy Mosques Kingdom of Saudi Arabia

H.M. King Hamad bin Isa Al Khalifa The King of the Kingdom of Bahrain

H.H. Sheikh Sabah Al Ahmed Al-Jaber Al Sabah Amir of the State of Kuwait

Gulf Petrochemical Industries Co. BSC (C)

Enhanced Performance Driven by a Shared Vision

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2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

CONTENTS

The Chairman’s Message The Board of Directors The Board of Directors’ Report to the Shareholders Corporate Governance Executive Management President’s Foreword GPIC’s Vision, Mission & Corporate Values

4-5 6 7-8 9 - 10 11 12 - 13 14

Sustainability

15 - 16

Safety, Security, Health and Environment

17 - 19

Management Systems

20 - 22

Production

23 - 25

Technical Services Support

26 - 30

Plants Maintenance

31 - 32

Sales and Exports

33 - 34

Human Resources Development

35 - 37

Summer Camp Programme

38 - 39

Social Events & Activities

40 - 42

Corporate Social Responsibility

43 - 45

Ladies Working Committee

46

Exhibitions

47 - 48

Official Visits to GPIC Complex

49 - 51

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Gulf Petrochemical Industries Co. BSC (C)

The Chairman’s Message

H.E. Dr. Ahmed Bin Ali Al Sharyan Chairman

The Gulf Petrochemical Industries Company (GPIC) continued its

Along with this success and excellence, and in light of the global

path towards progress in 2017 with more local, Arab, regional and

economic challenges, the company continued to maintain its level

international achievements.

of interest and care for its human capital. GPIC provided its employees with all that was needed to create an ideal work

Thanks to God Almighty, 2017 saw many different and distinct

environment.

achievements, the most important being a new record in terms of the number of working hours without any lost time accident. This

In 2017, the company was able to record the highest annual

amounted to more than 27 million hours for company workers and

production since its inception, producing 1,604,725 metric tonnes

contractors and ensured the company an accident-free record since

of Ammonia, Urea and Methanol. Through integrated coordination

May 2002. The company was awarded the Queen Elizabeth II

with the marketers of its products, the company achieved profits of

Safety Award in the Gold category presented by the Royal Society

US$ 32.07 million in 2017.

for the Prevention of Accidents (RoSPA) and coincided with RoSPA celebrating its 100th anniversary.

All this success and achievements would not have been possible without the support and guidance of Bahrain’s wise leadership,

In addition, the company won the Saudi Arabia Award for

which paved the way for the company to achieve all success.

Environmental Management in the Islamic World for 2017 for best practices in the private sector for its project, "Unique

We extend our sincere thanks, appreciation and gratitude to His

Environmental Applications in the Gulf Petrochemical Industries

Majesty King Hamad bin Isa Al Khalifa, King of the Kingdom of

Company". The company's outstanding achievements, combined

Bahrain, His Royal Highness Prince Khalifa bin Salman Al Khalifa, the

with its commitment to the principles of social responsibility, and

Prime Minister and His Royal Highness Prince Salman bin Hamad Al

its continued interest in the environment, enabled it to win two

Khalifa, the Crown Prince, Deputy Supreme Commander and First

prestigious awards from the Arabia CSR Network, the Arab CSR

Deputy Prime Minister for their continued support.

Excellence Award and the Best Partnership Project Award.

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2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

In 2017, the Company recorded the highest annual production since its inception, producing 1,604,725 metric tonnes of Ammonia, Urea and Methanol. Through integrated coordination with the marketers, the company achieved profits of US$ 32.07 million

Thanks also to all of Bahrain’s government institutions and the shareholders - Bahrain Oil & Gas Holding Company, the Saudi Basic Industries Corporation and the Petrochemical Industries Company of Kuwait for their continued support and encouragement.

I would also like to thank the Board of Directors, Executive Management and all the employees of GPIC for their dedication, efficiency and professionalism, and their sincere dedication to elevating the company locally and internationally.

Dr. Ahmed Bin Ali Al Sharyan Chairman of the Board of Directors

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Gulf Petrochemical Industries Co. BSC (C)

The Board of Directors

Mr. Yousef Abdulrahman Alzamel

H.E. Dr. Ahmed Bin Ali Alsharyan Chairman

Managing Director

Deputy Chairman

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Mr. Ibrahim Mohammed Almusaiteer

Shaikh Fahad Bin Salman Al Khalifa

Mr. Ahmed Mohammed Alumar

Mr. Ghanim Nasser Alotaibi

Mr. Abdullah Saeed Almutairi

Mr. Shafi Taleb Alajmi

Board Member

Board Member

Board Member

Board Member

Board Member

2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

The Board of Directors' Report to the Shareholders

The Board of Directors of Gulf Petrochemical Industries Company

Bahrain’s Department of Ports and Maritime Navigation Affairs at

is pleased to present to its shareholders the Annual Report, including

the Ministry of Communications. This was done after the completion

the company’s outstanding achievements during 2017, as well as its

of a strict external audit of the company's port.

activities related to occupational safety and health, the environment, finance, technical, administrative and marketing. Thanks to God

On the production level, the company produced a total of 1,604,725

Almighty, 2017 was characterized by many different achievements.

metric tonnes of ammonia, urea and methanol.

During the year, the company was able to achieve a new record in terms of the number of hours without a work-related accident. This

The close cooperation with marketers of its products – the Saudi

amounted to more than 27 million hours for the company’s workers

Basic Industries Corporation (SABIC) and the Petrochemical

and contractors. The company has, therefore, been free of accidents

Industries Company of Kuwait - contributed to the smooth and

since May 2002.

continuous export of the company's products. 1,204,485 million metric tonnes of the company's products were exported on

As a result of the company continuously developing its management

board 71 ships, which is the highest annual export quantity since

and operational systems, it has won the Queen Elizabeth II Safety

the GPIC’s establishment. As a result of its record of continuous

Award in the Gold category presented by the Royal Society for the

and safe operations and strict measures to ration expenses and

Prevention of Accidents (RoSPA). This recognition was given to GPIC

continuously develop its workforce, taking into account the global

for its successive achievements in safety and was the first time to

economic challenges, the company has been able to achieve a net profit

be given out in the history of RoSPA in celebration of its 100th

of US$ 32.07 million.

anniversary.

GPIC has become the focus of attention for the petrochemical The company also won the Saudi Arabia Award for Environmental

industry not only locally, but globally. This would not have been

Management in the Islamic World for the year 2017 for the best

possible without the guidance and support from Bahrain’s top

practices in the private sector. In addition, the company won

leadership.

prestigious awards from the Arabia CSR Network, the Arab CSR Excellence Award and the Best Partnership Project Award.

On this occasion, the Board of Directors is pleased to take the opportunity to extend its sincere thanks and gratitude to His

As a result of the firm and consistent regulations of the company's

Majesty King Hamad bin Isa Al Khalifa, King of the Kingdom of

industrial complex, the GPIC was granted a two-year license by

Bahrain, His Royal Highness Prince Khalifa bin Salman Al Khalifa, the 2017 Annual Report

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Gulf Petrochemical Industries Co. BSC (C)

The Board of Directors' Report to the Shareholders

As a result of its record of continuous and safe operations and strict measures to ration expenses and continuously develop its workforce, taking into account the global economic challenges, the company has been able to achieve a net profit of US$ 32.07 million Prime Minister and His Royal Highness Prince Salman Bin Hamad

The Board of Directors also wishes to thank its shareholders –

Al Khalifa, the Crown Prince, Deputy Supreme Commander and

the Bahrain Oil & Gas Holding Company, Saudi Basic Industries

First Deputy Prime Minister, for their continued support and their

Corporation and the Petrochemical Industries Company of Kuwait

constant efforts to provide everything that would help develop the

for their continued commitment to the company’s success and its

oil and gas industry and its derivatives in Bahrain.

operational and marketing operations.

The Board of Directors appreciates the dedicated efforts and work of the Executive Management and all employees, who have cooperated as a team to maintain the company's entity and its distinguished name in the petrochemical industry.

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Gulf Petrochemical Industries Co. BSC (C)

Corporate Governance

The Company won the Saudi Arabia Award for Environmental Management in the Islamic World for the year 2017 for best practices in the private sector. In addition, winning prestigious awards from the Arabia CSR Network, the Arab CSR Excellence Award and the Best Partnership Project Award GPIC's

Corporate Governance system is based on three fundamental components namely Principles, Code of Conduct and Policies. The system is based on our shareholders aspirations to conduct the company's business within the acceptable international and local guidelines and standards to ensure full protection of the interest of the shareholders and our key stakeholders.

GPIC Corporate Governance Principles were developed primarily from the company's Memorandum and Articles of Association, the Bahrain Commercial Companies Law and Bahrain’s Code of Corporate Governance. These Corporate Governance Principles are responsible for providing a basis and a system for goal-setting; effective decision-making and ethical actions, with the objectives of establishing a fundamental corporate entity that provides - on a long term basis - added value to the company's shareholders and in line with the principles outlined in the company's Articles of Association.

The Corporate Governance Policy of the Gulf Petrochemical Industries Company resulted in the formation of a high level Audit, Finance and Risk Committee to assist the Board of Directors in the effective performance of their governance and oversight responsibilities.

Audit, Finance and Risk Committee Composition The Audit, Finance and Risk Committee is comprised of three Directors. Each Director is nominated by Saudi Basic Industries Company (SABIC), Petrochemical Industries Company (PIC) and NOGA Holdings.

Role of the Audit, Finance and Risk Committee The purpose of the Committee is to assist the Board of Directors in independently ensuring and maintaining oversight of Gulf Petrochemical Industries Co. (“GPIC”).

The Committee is tasked with overseeing such responsibilities as financial reporting, internal control and risk management, internal audit, external audit, compliance, governance and other matters as enumerated in the Audit, Finance and Risk Committee Charter.

Internal Audit Function GPIC’s Internal Audit is an independent, objective, assurance and consulting activity designed to add value and improve GPIC's operations. The internal audit function helps the Company accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal controls and governance processes.

It contributes to a sound control environment through monitoring the prescribed control procedures. An effective internal audit function can assist all members of the Management in effectively discharging their responsibilities by providing them with analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed. In addition, it can provide constructive suggestions for improving the systems. The internal audit function can play a prominent role in enhancing the overall control environment within the Company.

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Gulf Petrochemical Industries Co. BSC (C)

Corporate Governance

An effective internal audit function can assist all members of the Management in effectively discharging their responsibilities by providing them with analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed

When an organisation reaches a certain size or complexity such as GPIC, it becomes a challenge for Senior Management to ensure that all the sections within the business are being effectively managed to achieve the Company’s objectives and are performing economically, efficiently and effectively.

The internal audit function, effectively provides reasonable assurance to the Board and Management of GPIC on whether the controls

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2017 Annual Report

to manage key risk areas are designed and operating effectively or identify important improvement opportunities where Management actions are necessary.

The GPIC Internal Audit Function reports directly to the Audit, Finance and Risk Committee. For logistical reasons, the Internal Auditor reports to the President for matters relating to time and attendance, leave, travel and other administrative requirements.

Gulf Petrochemical Industries Co. BSC (C)

Executive Management

Inspirational Leadership and the highest standards of professionalism Sitting from left to right

Standing from left to right

Mr. Fadhel Malalla Al Ansari General Manager - Manufacturing

Mr. Ahmed Mahmood Abdulghani Marketing Manager

Dr. Abdulrahman A. Hussain Jawahery President

Mr. Bader Mohammed AlMansoori Maintenance Manager

Mr. Yasser A. Rahim Alabbasi Plants Operation Manager

Mr. Adnan A. Razzaq Al Mahmood Information Technology & Knowledge Manager Mr. Zuhair A.Aziz Tawfiqi Corporate Communications Manager Ms. Najat Mohamed Sharif Human Resources Manager Mr. Adel Ahmed A. Malik Finance Manager Mr. Khalid Yusuf Al Bin Ali Technical Services Manager Mr. Jassim Ahmed Darwish Safety, Security, Health & Environment Manager 2017 Annual Report

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Gulf Petrochemical Industries Co. BSC (C)

President’s Foreword

Dr. Abdulrahman Jawahery President

It has been another year of uncertainty, complexity and volatility for our industry around the globe and we have faced many challenges given the extremely difficult market conditions and economic volatility underpinning our markets. But, our resilience to overcome these challenges, is down to our incredible GPIC team. The ideas, the skills and the dedication of our workforce, continues to make GPIC a pioneer in best practice and sustainability – and has done so for the past 38 years.

Throughout 2017, our entire business has continued to implement and seek out new opportunities in optimizing costs, enhancing safety and, operating our plants with the utmost efficiency and effectiveness in production and quality of product. We know and understand that our future lies in our continued pursuit of operational excellence and in creating innovative new ways of working.

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2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

GPIC received the Queen Elizabeth II British Royal Society for the Prevention of Accidents (ROSPA) Award to commemorate the 100th anniversary of the founding of the Society, this year

Some of the many highlights of this year have been the awards and

At the community level, everyone at GPIC recognizes the importance

recognition we have received in the areas of occupational safety

of a sustainable and effective Corporate Social Responsibility strategy.

and, GPIC continues to be an exemplary beacon of best practice in

Our employees have remained fully engaged in developing, sharing

this regard.

knowledge and sponsoring key initiatives to support and build our great country.

GPIC also received the Queen Elizabeth II British Royal Society for the Prevention of Accidents (ROSPA) Award to commemorate the

We ask Almighty God to enable us to continue succeeding as an

100th anniversary of the founding of the Society, this year. The

organization and as a country and, we thank our Kingdom’s wise

World Health and Safety Magazine produced by the National Safety

leadership which has enabled us to achieve all of our tremendous

Council of the United Stated, also bestowed our President with the

success.

title of “CEO of the Year 2018” in recognition of his contribution and dedication to international safety standards.

GPIC continued to maintain its strong investment in people development throughout 2017, structuring effective training sessions and courses to build the capability of the company’s future leaders.

Dr. Abdulrahman Jawahery President

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Gulf Petrochemical Industries Co. BSC (C)

GPIC's Vision, Mission & Corporate Values

We have always achieved our excellence through upholding our vision, mission and values

VISION

MISSION

VALUES

To be a world-class petrochemical and fertilizer company of choice, recognized for excellence.

• To produce high quality

• Excellence • Integrity • Respect • Transparency • Safety • Professionalism • Social Responsibility • Creativity • Team Work

petrochemical and fertilizer products

• To grow through successful

partnerships and joint ventures

• To optimize the business in a safe, sustainable and cost effective manner

• To embrace knowledge, harness innovation and utilize best applicable technologies and practices

• To boost Stakeholders share value • To train and develop the Human Capital to realize their full potential

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Gulf Petrochemical Industries Co. BSC (C)

Sustainability

Making the SDGs a Reality at GPIC

This year has been challenging for sustainability in many respects, but there have also been exciting developments in the sustainability landscape. We look back at GPIC’s efforts in mainstreaming the UN’s 17 SDGs in the Company’s Business Functions.

In September 2015, the UN General Assembly agreed to 17 global Sustainable Development Goals (SDGs) to reach by 2030. The goals and specific targets under the goals seek to end poverty, protect the planet, and ensure prosperity for all.

GPIC’s triple bottom line business approach aligns strongly to the UN SDGs. GPIC is a proud supporter of the global goals and has contributed in all the phases, right from the participatory process of My World to setting up meaningful indicators, sharing best practices on SDG aligned projects and programs through the UN Global Compact and KPMG’s Industry Matrix, aligning corporate goals both short term and long term with the relevant SDGs, mainstreaming SDGs in business functions, sharing our sustainability performance publicly through GRI sustainability reports and encouraging others to do the same. Our most recent initiative is linking our Capex projects and modification to the relevant SDGs and all this is done through an automated MOC process.

Utilizing the globally established GRI framework we have conducted the second most extensive stakeholder engagement to ascertain the materiality of the sustainability issues we advocate. All the members of our Sustainability Reporting Committee received GRI certified training on the new GRI standards that will enable them to effectively prepare and publish the GPIC Biennial Sustainability Report in Q1 2018.

As a committed member of the UN Global Compact, we have issued our Communication on Progress (COP) report in May 2017 qualifying the advanced level criteria. This Report also serves UN’s signature issue platforms such as the Women’s Empowerment Principles and the Food and Agriculture Business Principles.

As an outcome of our deep commitment to Climate Change action in relation to COP21, GPIC’s Climate Change Committee, whose

GPIC is not only a market leader in business but a well-known champion in sustainability. Through the years we have scaled up our sustainability practices and initiatives and currently lead in a number of ways. GPIC's current focus is on the key sustainability initiatives of leadership; collaboration; innovation and, accelerating youth empowerment.

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Gulf Petrochemical Industries Co. BSC (C)

Sustainability members are certified trained on IPCC GHG inventory software have issued the Company’s 2016 GHG Inventory report in 2017 and the next report will be issued in March 2018.

GPIC’s leadership commitment and support for sustainable agriculture, food security and poverty eradication and its engagement with international organizations such as UNGC, UN Environment, FAO gained further significance and further momentum throughout 2017 as GPIC’s President continues to serve the International Fertilizer Association (IFA) as its President. GPIC’s President is also an active member of UNEP’s HLG for GEO 6 and provides guidance and policy position on regional assessments.

Sustainability in the MENA region. Winning the Arabia CSR award for the sixth time is a testimony to GPIC’s successful strategy of building a culture that has extended far beyond the traditional understanding of corporate philanthropy. It has taken on the form of proactive, hands-on engagement, to assist in meeting the myriad of social sector needs, in education, health, skills development, poverty alleviation, women empowerment and infrastructure improvement.

We ultimately know and believe that, through CSR leadership, innovation collaboration and accelerating youth empowerment we can guarantee a more prosperous and sustainable future for societies and our planet.

We continued to benchmark ourselves with the best in class and won the Arabia CSR Award 2017 in the Large Organizations Category and the Partnerships and collaboration category for our outstanding achievements in Corporate Social Responsibility and

“For GPIC, sustainability has evolved to a strategic imperative that focuses on economic, environmental and social risks and opportunities.”

Dr. Abdulrahman Jawahery – President

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2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

Safety, Security, Health and Environment 2017 was another extremely successful year for GPIC in terms of Safety, Security, Health and, Environmental (SSHE) excellence.

At GPIC, we fully appreciate how complex the interdependency is when it comes to the relationships between a Company’s risk portfolio and the way it does business. The leadership at GPIC is fully committed in making the link between the way of doing business and the Safety, Security, Health and Environmental (SSHE) management even stronger and robust so that doing business and Safety, Security, Health and Environment are, one and the same process. With this commitment, throughout the year, GPIC continued to enhance and strengthen its Safety, Security, Health and Environmental (SSHE) management systems including training, capacity building, table-top exercises and testing of its emergency response and preparedness These continual improvement efforts further enhanced our behavioral safety culture and has culminated in us achieving a record 27 million working hours for its workforce and contractors without any lost time accident, exceeding 7,639 days. All our operations are managed responsibly and on a sustained basis throughout the year without any reportable environmental incident. GPIC maintained its process safety performance through operational excellence, robust risk management, training and lessons learned and, by ensuring no Tier 1/ Tier 2 process safety incidents in 2017.

With regard to its excellence in occupational health, safety and the environment, GPIC was recently awarded with the coveted Her Majesty Queen Elizabeth II Gold Category (RoSPA) Award. More recently the Company also received, the Saudi Arabia Award for Environmental Management in the Private Sector. GPIC continued with its leadership role in SSHE excellence at both the regional and global level and has been actively involved and engaged with Regional and Global organizations such as the National Safety Council, Royal Society for the Prevention of Accidents and UN Environment. GPIC’s President is in the UN Environment‘s HLG of GEO 6 assessment and provides advice on regional assessment. GPIC has engaged actively with governmental bodies such as on the National level strategy formulation and legislation revision regarding environmental issues covering the Paris Climate change agreement COP 21 and associated greenhouse gas inventory reporting; Role of Industries and private sector in the implementation of UN 17SDGs, National Energy Efficiency and National Renewable energy action plan, Carbon capture and potential future scenarios, Ozone depletion and the Montreal Protocol national level initiatives.

In its quest for continual improvement and as an outcome of the PSM assessment that was carried out by auditors from Process Improvement Institute (PII)-USA, GPIC implemented additional recommendations, including the updating of its mechanical integrity related PSM critical equipment list and its life cycle requirements.

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Gulf Petrochemical Industries Co. BSC (C)

Safety, Security, Health and Environment

staff for maximum knowledge retention, including full testing and risk analysis of employees. All courses are SCORM (Sharable Content Object Reference model) compliant and CPD (Continuing Professional Development) certified, with majority now achieving RoSPA accreditation.

The following is a list of significant SSHE achievements during 2017:

•

•

Safety training continued to be provided for both Operations and Non-Operations personnel. During 2017 there were 27 Modulised Emergency Response Training (MERT) sessions, attended by plants operation and maintenance personnel.

•

GPIC’s First Aid training and Community outreach programme with National Safety Council (NSC)-USA which started in 2012 is continuing and to date we have trained more than 400 employees, contractors, industrial and university students, summer camp children, employees’ wives and others.

•

GPIC hosted the ASIS Middle East 2017 conference with the theme "Securing Economic Diversification. The conference was held in Bahrain in November. The ASIS International is the leading organization for security professionals worldwide and it is dedicated to increasing the effectiveness and productivity of security professionals. GPIC SSHE Manager is a member of Middle East Regional Advisory Council of ASIS International.

•

The SHE Family Night is one of the main annual events of the company and was organized this year in the month of June with the Theme “Protecting Our Environment”. This event is held at the Gulf hotel with the intent to motivate and promote awareness amongst employees and their families of safety concerns and enhance a culture of responsible care both at home and in the workplace. A “drawings and essay writing competition” was organized before the event in order to develop and further enhance creativity and SHE awareness within the large number of talented children and wives of the employees and SHE awareness within the large number of talented children of the employees.

•

As part of Responsible Care we provided fire and safety training to personnel from Civil Defense, BDF, Bahrain Society of Engineers, Royal Court, industrial trainees, contractors, etc.

•

GPIC is constantly outreaching and engaging contractors for SSHE training certification with IMIST (International Minimum Industry Safety Training). This certified learning training tool is being used at GPIC to enhance the safety knowledge and capacity building of contractors. The certification is based on the OPITO (Offshore Petroleum Industry Training Organization) guideline, U.K. To-date 108 number of contractors have been certified which includes all levels such as, safety officers, site engineers, site supervisors / foremen and different crafts to ensure that safety is well understood and implemented at all times.

•

208 employees have attended Safety Media e-learning courses and 238 hours of Safety Media e-learning were completed in 2017. These courses are instructionally designed to engage

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2017 Annual Report

GPIC revamped and enhanced its risk management procedure and the new IT based platform was enabled. In addition to this the new GPIC Incident management system (GIMS) has been rolled out and the Company’s Permit to Work ( PTW) procedure has been further improved.

Gulf Petrochemical Industries Co. BSC (C)

Safety, Security, Health and Environment •

Replacement of existing conventional lights in process areas, non-process areas, buildings and street lights with energy efficient LEDs. 455 LED light fittings were installed in 2017, with an energy saving of 272 MWH/year and a total reduction in carbon emissions by 157 tons per year.

•

As part of Post COP 21 requirements, GPIC in collaboration with NOGA provided training to its Greenhouse gas (GHG) inventory reporting team members on the use of IPCC GHG Inventory software and issued its second GHG Inventory Report in 2017.

•

•

•

GPIC in cooperation with UN Environment and Ministry of Education continued with the Green Wave initiative that was launched in 2015. Through this program we sponsor and facilitate the planting of local trees at public schools in order to promote biodiversity awareness and encourage environmental stewardship. At each school a variety of local tree saplings, such as pomegranate and olive, are planted by the students. The campaign for the 2017/2018 academic year is now concluded, with a total of 20 primary, intermediate and secondary boys and girls schools participating. Furthermore, during October and November, 800 local sapling trees were planted at the participating schools. It is worth mentioning that since the launch of the program in 2015, 50 schools have benefited from the program with the distribution of 2,000 sapling trees in total.

To date we have recycled 111 tonnes of plastic, paper, metal cans and card board. Additional waste recycling points were introduced in employee’s car park areas and the GPIC Club. This has resulted in a reduction of our carbon emissions by 190 tonnes.

Publicizing environmental awareness amongst future generations progressed as planned. Our engineers presented a number of

environmental lectures in both public and private schools. The total number of students benefiting from this program has crossed 27,500 since 2001. From 2015 Responsible Care awareness is also being imparted in addition to environmental awareness.

•

For the fourteenth consecutive academic year, GPIC sponsored the Ministry of Education/GPIC Environmental Research Program for the GPIC Environment Award for secondary school students.

•

New Marpol compliant, urea marine terminal waste handling procedure was introduced and GPIC’s Marine oil spill plan was revamped in accordance with Bahrain’s Supreme Council for Environment recommendations.

•

As part of the health awareness program GPIC’s Medical Center arranged several lectures to increase the employees’ health awareness on subjects like Key skills to improve focus and memory, Colorectal cancer, Mental health, Diabetes Mellitus etc.

Additionally, various health campaigns took place such as GPIC Smoke-Free Campaign, Beat the heat campaign and Obesity Management Program.

•

More than 358 employees were screened at GPIC Medical Centre as part of the periodic medical examination during 2017.

•

As part of corporate social responsibility more than 194 GPIC employees donated blood 177 units of blood during 2017.

•

Being a Responsible Care (RC) Company, GPIC actively participated in all the planned RC related initiatives, committees, conferences and workshops spearheaded by GPCA. Additionally RC metrics were reported as planned.

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Gulf Petrochemical Industries Co. BSC (C)

Management Systems

GPIC’s Executive Management Team emphasizes the alignment of all business operations to the company’s overall vision and its drive for Sustainability

To

enhance competitiveness in the Oil and Gas industry, which is witnessing rapid developments, it is necessary to keep pace with changing operational and management processes so that the industry becomes more efficient and effective.

For this to happen, companies should improve and develop practical strategies and management systems to enable them to achieve positive results at the lowest cost and in the shortest possible time.

Therefore, evaluating and continuously monitoring the performance of management systems is a key requirement for companies at a time when pressures are ever-increasing and business activities becoming more complex.

GPIC’s Executive Management Team emphasize the alignment of all business operations to the company’s overall vision and its drive for Sustainability. This is achieved also through the relevant committees who steer the sustainable alignment of the company, defining responsibilities and framework conditions. All of our Business Operations are managed using defined targets and performance indicators in areas such as innovation, supplier management, safety, product stewardship and environmental protection. On the basis of stringent internal auditing and analysis, GPIC has established relevant Management Systems, Committees, Reporting Structures and Standard Operating Procedures which undergo regular internal audits and they are continuously improved and aligned to the specific requirements at any given time.

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2017 Annual Report

GPIC’s Management and Committees hold periodic management meetings to review and monitor the performance and efficiency of its Integrated Management Systems (PAS 99), Responsible Care Management System (RC 14001), Information Security Management System (ISO 27001), Business Continuity Management System (ISO 22301), Energy Management System (ISO 50001) and others.

The outcome of these meetings creates a roadmap for the future aimed at further improving and developing management systems as an ongoing process.

Gulf Petrochemical Industries Co. BSC (C)

Management Systems In this context, the company succeeded in, and surpassed the process of tripartite periodic review for the Integrated Management Systems (Quality / Health & Safety / Environment) conducted by certifying company. The Integrated Management Systems certificates were renewed for upcoming three years.

GPIC’s Resilience Committee is responsible for following up on the progress of these matters and also responsible for reviewing Enterprise Risks and activities related to the revisions and validations of the standards specifications.

The Resilience Committee ensures that the company is aligned to the required standards; the current situation of the company; the chemical industry and, the region in general. One of the most important activities of the committee during the year was to consolidate and integrate into a process all basic requirements of the Business Continuity System (ISO 22301) by revising business risk and impact analysis forms and incorporating them in standardized formats discussed by all departments and approved prior to their being issued.

The Committee has also worked diligently to develop clear and welldefined goals for all departments and sections to introduce a periodic review of all possible business threats. The purpose of these reviews is to help the company to proactively discover any potential hazards in advance and, in case of any adverse event occurring, to trigger the required implementation plans to ensure no negative impact is experienced in the general conduct of day-to-day operations. In so doing, the Resilience Committee safeguards the company’s ability to fulfil its obligations to shareholders, clients, customers, employees, society and all of its stakeholders, in the shortest time possible and at the lowest realistic associated costs.

There were approximately 73 internal audits conducted during 2017, covering various standards and requirements of different management systems. These audits were, and continue to be, one of the most important instruments used by GPIC towards its journey in continuous improvement. In addition, different certified bodies also conducted 11 external and independent audits on various standards during the year.

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Gulf Petrochemical Industries Co. BSC (C)

Management Systems

There were approximately 73 internal audits conducted during 2017, covering various standards and requirements of different management systems

All external audits concluded that the company was committed to implementing these management systems and fully compliant with Bahrain’s laws and legislation. The Management Systems Section is proud to confirm that all internal and external audits have been successfully concluded on schedule.

All the members of the distinguished internal auditors’ team were honoured during the company’s annual celebration, in the presence of the company’s management and the Board of Directors, for their efforts and achievements. This was a boost to morale for the team and confirmed how important their work and roles are in establishing the strict adherence to the application of the management systems requirements. It also reflects their role in ensuring GPIC conforms to the required laws and regulations, organizational internal procedures at all stages and sections of the company’s business and, contributing to the organization’s continuity of workflow and desired goals.

22

2017 Annual Report

Gulf Petrochemical Industries Co. BSC (C)

Production PRODUCTION PERFORMANCE HIGHLIGHTS

All

Plants were operated in a reliable, safe and efficient manner whilst maintaining specified standards in terms of quality for all products.

2017 highlights:

• • •

•

The average daily production achieved over the full year is 1,273 tonnes/day of Ammonia, 1,931 tonnes/day of Urea and 1,216 tonnes/day of Methanol.

The monthly Urea production of 62,300 tonnes for January 2017 was the highest ever achieved.

As part of GPIC’s commitment to encouraging and supporting the Bahrain economy, Methanol tanker loading was started on 25th December 2016, for local sales. It progressed very well during 2017 and a total of 1,632 MT of Methanol was sold this year. The Methanol sold in Bahrain will be used in downstream industry and will help boost the sustainable development of the country.

As a part of enhancing the efficiency and reliability of the complex, important projects were carried out successfully, namely:

1. Refurbishment of one of the Utilities boiler.

2. Installation of additional demin water tank to enhance water inventory.

3.

4.

5.

Utilizing surplus low-pressure steam from Urea Plant to Methanol Plant.

Installation of Urea Formaldehyde Unit (UF85 unit).

Installation of New Nitrogen Unit.

6. Procuring one set of Ammonia & Methanol Loading Arms.

1. Our combined products were 1.4% higher against budgeted figures.

2. The plants accomplished an excellent running cycle during 2017.

The Urea plant completed 934 days of continuous production run.

The Ammonia plant completed 804 days of continuous production run.

The Methanol plant completed 576 days of continuous production run.

• • •

3. Since 1985 and cumulative to end December 2017, 13.56 million tonnes of Ammonia and 13.32 million tonnes of Methanol production was achieved.

4. Since 1998 and up to the end of December 2017, 12.3 million tonnes of Urea production was achieved.

2017 Annual Report

23

Gulf Petrochemical Industries Co. BSC (C)

Production The table below summarizes various budgets vs. actual production figures.

Urea Formaldehyde Project:

Product

GPIC has never stopped exploring ways to preserve important raw materials and GPIC’s Board has approved the building of a Urea Formaldehyde (UF-85) plant which will fulfil the company’s requirement of 22 MTPD.

Budgeted (tonnes)

Actual Variance (tonnes)

Ammonia

454,860

464,573

2.1% Higher

Methanol

444,030

442,154

0.4 % Lower

Urea

684,000

697,988

2.0 % Higher

Ammonia to Urea

389,880

393,667

1.0 % Higher

Total production

1,582,890

1,604,725

1.4 % Higher

Saleable production

1,193,010

1,211,058

1.5 % Higher

1,800,000

A detailed feasibility study was conducted by GPIC and an external consultant prior to floating the inquiries. Technical and commercial evaluations were carried out to ensure that the most economic and energy-efficient technology was chosen. The bid was finally awarded to Japan Gas Corporation Gulf “JGC Gulf” on 14/02/2017 as the engineering and procurement contractor who is bonded with “Haldor Topsoe” as the technology licensor.

1,200,000

Turnaround 2018:

Production Performance 2017 (Production) Production (tonnes)

600,000 0

Ammonia

Urea

Budget

Methanol

Total

Saleable

Actual

2018 is our major turnaround year and is scheduled to commence on 1st April 2018 and expected to be completed by 24th April. All the necessary provisions have been made to ensure an effective and successful turnaround and the process of shutting down and commencing normal production will take place as follows:

Performance factors 1. Ammonia Plant will be shut down for 21 days (from 1st April, Production will resume by 22nd April).

2. Methanol Plant will be shut down for 18 days (from 3rd April, Production will resume by 21st April).

3. Urea Plant will be shut down for 23 days (from 1st April, Production will resume by 24th April).

4. Utilities Plant will be shut down on 5th April for 9 days.

Onstream Factor %

150

100

50

0

2013 Ammonia

2014 Methanol

2015* Urea

2016

2017

* Turnaround years

Capacity Utilisation %

150

100

50

Management systems:

0

2013 Ammonia

2014 Methanol

2015* Urea

2016

2017

•

* Turnaround years

Utilisation factor % 150

100

50

0

2013 Ammonia

24

All planned inspections, required repairs, equipment replacement and necessary corrective & preventive maintenance will be carried out during the Turnaround. The implementation of our scheduled CAPEX projects will also be completed during this period. This will improve the performance, safe, reliability and efficiency of the plants.

2014 Methanol

2017 Annual Report

2015* Urea

2016 * Turnaround years

2017

Our Integrated Management system, Energy Management system, Enterprise Risk Management system and Process Safety Management system were followed rigorously throughout the year by the Plants Operation Department. The department was also audited by both internal and external auditors and our performance judged highly satisfactory at all levels.

Gulf Petrochemical Industries Co. BSC (C)

Production

Energy consumption figures during 2017.

Product Handling & Exports:

• •

•

The Product Handling & Export section provided uninterrupted support by loading the cargoes within the allocated time throughout the year.

Throughout the year Ammonia, Methanol and Granular Urea were produced to the highest quality specifications, for the premium market. A total of 1.2 million tonnes of product was exported during the year, 2017.

As per new regulations, all companies operating private jetties in the Kingdom of Bahrain must acquire a license from the Bahrain Government. GPIC successfully acquired this license in July 2017. GPIC must also further demonstrate solid waste handling capability to the Supreme Council for the Environment as part of the MARPOL 73/78 regulation. All necessary documents in this regard have been submitted.

1. Ammonia Plant cumulative energy consumption for the year was 8.91 GCal/t.

2. Methanol Plant cumulative energy consumption for the year was 9.01 GCal/t.

3. Urea Plant cumulative energy consumption for the year was 6.48 GCal/t.

4. Overall cumulative energy consumption for the complex for the year was 7.56 GCal/t against a budget of 7.77 GCal/t.

Export (no. of ship)in 2017

Export 2017, tonnes

21

800,000

44

600,000

7 400,000 200,000 0.00 Ammonia

Urea

Methanol

Ammonia

Methanol

Urea

Total ship loaded : 72

2017 Annual Report

25

Gulf Petrochemical Industries Co. BSC (C)

Technical Services Support

All of our Business Operations are managed using defined targets and performance indicators in areas such as innovation, supplier management, safety, product stewardship and environmental protection LABORATORY

During 2017, the Laboratory Section extended its support to the smooth and reliable running of all GPIC plants through successfully meeting all analytical requirements of Operations Department. Approximately 52,000 samples from various sections of the entire plant were collected and analysed for 177, 000 parameters. In addition to the routine samples, approximately 2,700 special samples were also analysed for 9,000 parameters. The break-

26

2017 Annual Report

up of the samples and the parameters analysed are shown in the figures given on the next page.

To ensure the excellence of our final product, monitoring the quality of the raw materials and analysing samples at various intermediate stages of the process is conscientiously performed. The quality of all our final products is also checked before being shipped/loaded

Gulf Petrochemical Industries Co. BSC (C)

Technical Services Support

into the trucks/tankers. Approximately 250 Quality Certificates for Ammonia, Methanol and Urea were issued by the Laboratory Section this year. Monitoring of environmental parameters is also regularly carried out by our Laboratory as part of the requirements of Bahrain’s “Supreme Council for the Environment”.

Laboratory is regularly participating in “Proficiency Tests” conducted by world renowned agencies i.e. M/s Laboratory Quality System International-USA (LQSi) for Urea product and M/s Institute for Inter-laboratory Studies –Netherland (IIS) for Methanol product, in line with ISO 17025 requirements. The performance of the Laboratory in these tests has been ranked satisfactory by both agencies mentioned above.

Staff training is considered paramount to the Laboratory’s proficiency and exceptional standards. Staff are regularly given “InHouse” training as well as training provided by external specialized agencies on the various analytical techniques to enhance our team’s analytical skills.

Sample Breakup 60000 50000 40000 30000 20000 10000 0

Ammonia

Urea

Routine Samples

Methanol

Utilities

Parameters

Sample Breakup 6000 5000 4000 3000 2000 1000 0

Ammonia Special Samples

Urea

Methanol

Utilities

Misc.

Parameters

2017 Annual Report

27

Gulf Petrochemical Industries Co. BSC (C)

Technical Services Support

ENGINEERING SECTION 2017 was a challenging year for the Engineering Section as preparations were underway for the installation of major approved Capex Projects during the forthcoming Turnaround 2018. The Procurement process for major long-lead equipment is also underway. These approved Capex projects will facilitate in enhancing the safety and reliability of our process plants. Some Capex Projects have been implemented with a view to improving the security of our Complex. This year, the Engineering Section completed the study of around 147 modifications. All plant modifications undergo a rigorous Process Hazards Assessment before being operational to ensure the safety and reliability of GPIC plants.

During 2017, 16 Capital Projects were processed equalling US $ 29.4 million. Some of the critical Capex projects under implementation are listed below:

• • •

Procurement and installation of new Nitrogen package unit Replacement of Ammonia & Methanol Loading Arms Upgradation of obsolete Honeywell Experion DCS Hardware for all Operating Plants Replacement of number of critical High Pressure Heat Exchangers including Waste Heat Exchanger E-0801, Carbamate Condenser E-8202B, Urea CO2 Compressor Third Interstage Cooler E-8103, Cold Exchanger E-0804, Gas Coolers E-0803B/C/D.

•

Completed Modifications 250

Capital Expenditure (in USD) 60,000,000 50,000,000

200

40,000,000 150 30,000,000 100 20,000,000 50

10,000,000

0

0 96 997 998 999 000 001 002 003 004 005 006 007 008 009 010 011 012 013 014 015 016 017 2 2 2 2 2 2 2 2 1 1 2 2 2 2 2 2 2 2 2 2 1

19

Budgeted Figure

28

2017 Annual Report

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Budgeted Figure

Gulf Petrochemical Industries Co. BSC (C)

Technical Services Support • •

Replacement of Switchboard 61MMS4-1 with a modern type Replacement of existing 415V Switchboards 61PC2-1A/B and local switchboard in sea water intake area 31SWR2-1/2 with a modern type Installation of new Security Fence with CCTV cameras and Infrared Detection System along GPIC Maintenance Causeway Replacement of Catch Pot F-1501 in the Methanol Plant and Ammonia Separator F-0801 in the Ammonia Plant.

Upgrade & Enhancement of Field Instruments & Control Valves

• • •

Materials & Procurement Section During 2017, GPIC received materials with an approximate value of BD 15 Million which were required to support the maintenance and reliability of plant equipment and cater to all operational requirements. Approximately 1,200 Purchase Orders for materials and services were issued in 2017 with an approximate value of BD 22 Million.

The Warehouse effective service levels continued to score more than 99% throughout the year, indicating the ready-availability of materials required by the plants. It is also a clear indication of the close and effective expediting and coordination with suppliers and contractors, both local and foreign.

12% of total purchases negotiable value. Efforts were also taken in consultation with the end users, to procure only essential spares. In addition, the Section has finalized offers based on competitive offers from multiple bidders for some Original Equipment Manufacturer’s spares which has resulted in another saving of BD 33,000/-.

As part of GPIC’s corporate strategy to ensure reliability and safety in the operation and maintenance of critical rotating machinery , a multi-outage 10 year Plan Agreement was entered into with General Electric – Oil & Gas, on April 9, 2017. This Agreement covers all critical compressors, turbines and pumps, supplied by General Electric that are in operation. This includes maintenance and services of machines; outage and, other spare parts at the most optimum price and agreed deliveries.

The ordering of all main materials & services required for Turn Around 2018 project which is scheduled for 1st April 2018 have been completed and most of the major equipment and materials have been received on site, indicating full readiness of the Company for the upcoming Turnaround.

Keeping with the company’s Cost Optimization Strategy for 2017, whilst ensuring the reliability and safety of the Plants, emphasis was given to stronger commercial negotiation with vendors. The endeavour resulted in a saving of BD 1,152,000/- which is around

2017 Annual Report

29

Gulf Petrochemical Industries Co. BSC (C)

Technical Services Support INSPECTION SECTION: GPIC’s Inspection Section continued with its proactive approach toward enhancing the reliability and mechanical integrity of its assets. Preventive Maintenance (PM) schedules for plant equipment and regulatory requirements which were developed based on the industry best practices and as per latest revisions of codes and standards, are being regularly followed and implemented. To ensure the mechanical integrity, all listed equipment are thoroughly inspected at a specified periodic intervals.

In 2017, the Inspection also issued a total of 274 Reports. The Breakdown per facility is shown in the figures below.

In addition, more than 20 of our piping corrosion loops were subjected to Risk Based Inspection Studies and revalidated after the completion of the 2015 Turnaround.

The inspection Section was again certified for ISO 17020:2012 accreditation conformity assessment with the requirements for operation of various types of bodies performing inspection.

Currently we are preparing for the upcoming 2018 Turnaround which will see the utilization of professional services and expert contractors from all around the world to ensure the reliability of our Plants.

Total Prevenative Inspection Report issued in 2017 34

30

42

26

22

274

120

In line with GPIC’s policy to enhance and build the skills of our employees, three Inspection Engineers were certified through the American Petroleum Institute (API) Certification Program.

The Inspection Section continued its integrity program and brought in international inspection agencies for the follow up inspection of CAPEX items being manufactured by internationally recognized workshop facilities, to ensure compliance with quality assurance requirement.

30

2017 Annual Report

Ammonia

Methanol

Product Handling

Mis

Urea Total

Utilities

Gulf Petrochemical Industries Co. BSC (C)

Plants Maintenance

In

2017 the Maintenance Department continued its consistent efforts to enhance safety and reliability throughout the complex, placing special emphasis on the process plants. Accordingly, the Objectives and Key Performance Indicators for the department were set and monitored closely on a quarterly basis, resulting in the achievement of nearly all objectives.

In addition, the department has completed the following routine maintenance activities: I. Process Performance Effectiveness

• • • • • •

• • • • •

97.2 % of CMRT Completed [Including Priority: 1, 2, 3].

98 % of PMRT & INRT Completed [Including BOPA].

100% Execution of Emergency Orders [2017 Target: Zero (0) pending, Total attended: 100 % (Attended: 106).

100% Execution of Urgent Orders [2017 Target: Zero (0) pending, Total attended: 100% (Attended: 495).

Maintenance Index [PM/CM ratio] achieved: [Target: 65/35] 81/19 97.6 % Maintenance Orders completed during year 2017 (Order Type: PMRT/CMRT/INRT).

Received : 6,277 Completed : 6,125 PM Records Reviewed - 1,233 Rework: Maintenance Orders - 6 Slippage to Scheduled jobs - 33 Production Orders completed - 9 Saving of In House Spare Parts Manufacturing for GPIC Warehouse - BD. 52,934 until the end of November 2017.

II. Major Jobs Executed during 2017

• • • • • • • • • • • • •

Employee Car Park Extension at south of Mosque: all activities are completed.

Desalination Plant I: All maintenance activities are completed.

Desalination Plant II: All maintenance activities are completed.

Installation of new tank T-4201C: Overall construction activities completed.

Fin Fan Coolers: All PM maintenance activities are completed as per Winter Schedule.

Installation of Marine Floating Barrier at Urea Jetty.

Biological Treatment Plant Unit Shutdown Maintenance activities are completed.

Painting of Methanol Plant Structures for 15 & 18 areas completed.

Ammonia Export Vapor line repair works are completed.

Replacement of 415V Switchboard at Substation#3.

Replacement of R-1102 Catalyst.

Constructing of a new Nitrogen Plant Project [In progress] Refurbishment of Boiler B-5201B [In progress] Routine Maintenance Orders (completed) 1%

21%

75% 3%

Corrective Maint.

Inspection

Preventive Maint.

Mod/Capex

2017 Annual Report

31

Gulf Petrochemical Industries Co. BSC (C)

Plants Maintenance III. Contract Services

VI. Turnaround Preparation Status for 2018

• • • • • • • •

• •

Purchase Requisitions (PRs) raised = 24 Purchase Orders (POs) issued = 10 Term Contracts PRs raised = 113 Term Contracts POs issued = 123 Contractors & Suppliers engaged (Total) = 112 Contractors & Suppliers engaged (Term Contracts) = 102 Software Licenses = GPR’s raised = 1

• • •

IV. Material Status

• •

•

•

• • • • •

Number of Service Purchase Requisitions initiated - 108 Number of Maintenance Orders Assessed to date - 3,113 / 3,222 Number of Modifications listed to date - 96 Number of Capex Packages received to date - 46 Number of Turnaround Audits Conducted to date - 12 Periodic Audits + 1 Shareholder Audit + 2 Readiness Assessments + 8 Turnaround Management Audits.

Materials Ordered for Turnaround - 658 Items.

Job-list Review Meetings conducted to date - 1st Round, 22 Meetings conducted.

Number of New Suggestions / Lessons implemented - 228 out of 339 total Suggestions.

Total number of Spares reserved – 9,323

Stock Items (Spares) Consumed. – 4,730 items (BD 795,682.482) Direct Use Material procured. - BD. 56,972 No of SPIRs initiated - 163 Estimated Cost of SPIRs – BD. 869,567 No of Items (Spares) Withdrawn – 5,604 items (BD 607,894) No of Items (Spares) Returned - 874 items (BD 799,683)

•

V. Training & Development

• • • • •

Maintenance Employees involved (100 %); including SHE Training.

Training Hours achieved - 5,043 Hrs. Training Courses attended - 161 Employees were awarded with Certificate Courses - 36 Training Hours per Employee - 62.3 Hrs/employee

In-house Spare Parts Manufacturing Actual Savings (2001 - 2017) in BD BD 450000 400000 350000 300000 250000 200000

184,015 179,917

234,015 213,638

304,501 265,536

420,878 387,208

239,552 203,364

286,447 259,470

274,184 247,806

131,799 116,343

183,398 169,327

247,458 238,650

289,598 277,316

229,125 203,957

316,220 282,999

150,058 119,009

249,742 220,970

50000

121,543 107,662

100000

54,654 52,934

150000

0 2001 (From July) Actual

32

2002

2003

2004

Savings

2017 Annual Report

2005

2006

2007

2008

Actual Cuml.

2009

2010

Savings Cuml.

2011

2012

2013

2014

2015

2016

2017 (As on Sept)

Gulf Petrochemical Industries Co. BSC (C)

Sales and Exports Methanol Exports by Country 2017 9%

Ammonia Exports by Country 2017

8%

9%

15%

76%

6%

45%

21%

11% USA Taiwan

UAE

China

Korea

India

China

Turkey

Thailand

A modest strengthening of global economic activity continued in 2017. Revival of industrial production especially in developed economies and recovery in global trade driven primarily by rising import demand from East Asia generally helped in strengthening the overall market sentiment.

During 2017, the nitrogen fertilizer industry was once again seen struggling through its cyclical trough, confronted with oversupply and falling margins. The final quarter of 2017 however, saw the global economy stabilize and perform at a higher level through a combination of improved conditions in emerging market countries as well as stronger growth in developed economies.

A similar trend was experienced in the fertilizer industry, which witnessed a surge in demand during the final months of 2017, this in turn supported the stabilization and performance level of the industry.

On the petrochemicals side, Methanol largely regarded as an energy substitute and having a strong correlation with international oil prices saw a noticeable recovery during 2017, after a dismal showing during 2016 which saw methanol prices touch new lows. After the major Methanol capacity additions in the USA during 2015-16, the global markets slowly re-adjusted themselves, with prices seeing steady improvement driven by healthy global demand growth coupled with a recovery in crude oil prices. Methanol prices were aptly supported by supply tightness globally, growth in traditional downstream derivatives at or near global GDP levels and surge in demand for Methanol to Olefins (MTO) in China.

During 2017, GPIC’s exports of Ammonia, Urea and Methanol totaled 1,206,623 MT, which is 1.1% higher than the budgeted figures for the year.

2017 Annual Report

33

Gulf Petrochemical Industries Co. BSC (C)

Sales and Exports

Total ammonia exported for the year was 73,494 MT, while methanol exports totaled 455,379 MT and granular urea exports in bulk totaled 676,791 MT. The company’s total exports of all three products were delivered on 71 ships. In addition, 959 tons of bagged urea was sold in the local Bahraini Market. Taiwan proved to be the biggest importer for GPIC products during the 2017, with 17% of the total exports for the year, followed by India and USA both at 14% and 13% respectively.

This brought the total GPIC ammonia and methanol exports to world markets since the company’s inception in 1985 to nearly 6.6 million MT of ammonia and 13.3 million MT of methanol. GPIC’s urea exports since the takeoff of its urea operations in 1998 now total around 12.2 million MT, while the cumulative total of all products exported from GPIC now exceed 32.1 million MT.

Despite of all the challenges faced during the year, GPIC successfully concluded the year on an upbeat note, both in terms of the total products exported to world markets and in realizing improved netbacks on all its three products namely ammonia, methanol and granular urea.

During 2017, the company was again able to accomplish all its marketing goals and targets by effectively meeting all customer expectations and requirements, mainly with regards to the quality and timely delivery of its products. The positive outcome is a result of intense dedication, hard work, joint efforts and mutual coordination between the GPIC and both its Marketing Partners, SABIC-Saudi Arabia and PIC-Kuwait.

Urea Exports by Country 2017

Cumulative Exports by Country 2017

4%

3% 16%

17% 2% 2%

7% 17%

4%

2% 2%

9%

13% 9%

4% 6%

7%

USA

Argentina

7%

14%

Thailand South Africa

Uruguay

2017 Annual Report

17%

10%

3%

Turkey

Mozambique

4%

18% 2%

34

1%

Brazil India

Tanzania Australia

USA

China

Korea

Thailand

Taiwan

India

Turkey

UAE

Tanzania

Uruguay

South Africa

Australia

Argentina

Brazil Mozambique

Gulf Petrochemical Industries Co. BSC (C)

Human Resources Development The training and development of Bahraini employees is a major priority for GPIC management and 2017 marks 38 years of this commitment as the Academy of Leadership and Learning, previously the Training Centre, celebrated its 33rd anniversary. To keep pace with the development of its strategies and the future trends of training and development, the previous Minister of Oil and Gas Affairs and President of the National Oil and Gas Authority, HE Dr. Abdul Husain Bin Ali Mirza inaugurated the Academy of Leadership and Learning on November 8, 2010.

Number of Trainees Annual 100

88

90 80 60 50 40

74

71 64

70 49

54 47

48

43

63

65

49 40

39

32

30

The Company's training policy posits the full development of Bahraini employees, both new and existing, as its ultimate objective.

To achieve this goal, employees undergo training courses arranged and designed by the Academy of Leadership and Learning as a part of their continuous training and development, encompassing both practical and soft skills competencies through in-house, local and overseas training events.

In addition to the awards in training and developments GPIC has received in previous years, the company was also awarded several times as an outstanding institution in training and human resources development from the Ministry of Labour. This achievement comes in recognition of the Company's role in the development of Bahraini human resources, through the provision of prolific opportunities for staff to participate in specialised courses inside and outside the Company and the support and encouragement for employee participation in relevant petrochemical industry workshops, forums and conferences in order to achieve the Company’s sustainable development objectives.

27

20 10 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

The Academy of Leadership and Learning utilizes Competency-Based Training (CBT) in its approach to the training and development of staff. This scheme is considered as a qualitative step in the development of training with a view to enhancing staff skills, boosting their capabilities, achieving equal training opportunities, improving productivity and developing skills to bridge any competency gaps.

This pioneering project assists in the creation of individual training plans for company employees in addition to the annual training plan and leads to the development of each and every person in the company.

The Academy of Leadership and Learning is also currently overseeing the development of 16 employees to qualify them for taking senior supervisory positions in the future.

2017 Annual Report

35

Gulf Petrochemical Industries Co. BSC (C)

Human Resources Development Number of e-Learning Users

Total Training Events 441

450 400

350 323

350 284

300

97

100

308

2015

2016

320

251 177

172

2011

2012

150

81

100

34

50 0

0 2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Apart from the training of new graduates, the Academy conducted a number of training and development courses to meet the requirements of both the Company and its employees. This process involved the organization of 147 training courses held in the Academy and GPIC Club, attended by a total of 1,638 employees.

This is in addition to 82 training courses and conferences held in Bahrain with 359 employees in attendance and a total of 91 training courses outside Bahrain attended by 228 employees. These courses represented a total of 320 courses attended by 2,225 employees and trainees.

36

296

210

200

150

150

288

250

173

200

338

335

300

299

217

250

50

400

2017 Annual Report

2008

2009

2010

2013

2014

2017

GPIC has also recently adopted a Company-wide mentoring programme to provide guidance from all managers and superintendents to junior staff members. A total of 42 employees benefitted from this guidance and counseling process. This is in addition to the development and awareness programmes held by the Company for all new employees in the areas of health, safety, environment and quality.

GPIC has a separate scholarship scheme that strives to encourage employees to complete their academic studies. In addition to this scheme, scholarships are offered to employees' children.

Gulf Petrochemical Industries Co. BSC (C)

Human Resources Development

In 2017, GPIC trained 193 students from various local and overseas universities, institutes and schools in various departments of the Company under the supervision of qualified employees. This came as part of the management's keenness to play its role towards the community and provide training opportunities for upgrading the technical, leadership, communication, planning and team work skills of young people engaged in their academic studies. This is a part of GPIC's commitment to the community and the development of a generation of young people who have enhanced skills and abilities to contribute to the country's growth and development.

GPIC has also recently launched the electronic library through the Company's intranet. The new library has more than 1,800 titles covering a wide range of topics. In addition, the electronic library contains more than 190 e-books on different subjects, numerous magazines, journals, periodicals and valuable publications.

The eLearning Centre provides support to the training and development plans in GPIC as it offers 55 training programmes in a wide range of topics such as communication skills, self development skills, computer applications, leadership skills and project management skills. There are 18 technical programmes on offer for the upgrading of technical skills and knowledge for workers in the technical departments such as the Maintenance Department, Plants Operation Department and other technical areas in the Company. In addition, the Centre constitutes 113 comprehensive training courses in the areas of safety, health and the environment.

2017 Annual Report

37

‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة)‬

‫النشاط الصيفي‬

‫‪51‬‬

‫التقـريــر السـنـوي ‪2017‬‬

‫)‪Gulf Petrochemical Industries Co. BSC (C‬‬

‫‪Summer Camp Programme‬‬

‫‪2017 Annual Report‬‬

‫‪38‬‬

Gulf Petrochemical Industries Co. BSC (C)

Summer Camp Programme

39

2017 Annual Report

Gulf ‫ب‬ Petrochemical Industries Co. BSC (C) )‫(مقفلة‬ ‫البتروكيماويات ش م‬ ‫الخليج لصناعة‬ ‫شركة‬

‫النشاط الصيفي‬

2017‫السـنـوي‬ Annual ‫التقـريــر‬ Report 2017

39 50

‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة)‬

‫)‪Gulf Petrochemical Industries Co. BSC (C‬‬

‫األنشطة والفعاليات اإلجتماعية‬

‫‪Social Events & Activities‬‬

‫حفل تد�شني كتاب جيبك يف ال�صحافة املحلية‬ ‫‪Launching GPIC in Local Press Book‬‬

‫دورة داخلية لكرة ال�سلة‬

‫فعاليات عيد الفطر بنادي ال�شركة‬

‫‪Interdepartmental Basketball Tournament‬‬

‫‪Eid Al Fiter Celebration at GPIC Club‬‬

‫�سباعيات البرتوكيماويات لكرة القدم‬ ‫‪7-A-Side Football Tournament‬‬

‫‪49‬‬

‫التقـريــر السـنـوي ‪2017‬‬

‫‪2017 Annual Report‬‬

‫‪40‬‬

‫)‪Gulf Petrochemical Industries Co. BSC (C‬‬

‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة)‬

‫األنشطة والفعاليات اإلجتماعية‬

‫‪Social Events & Activities‬‬

‫�إحتفال العيد الوطني املجيد‬ ‫‪National Day Celebration‬‬

‫حملة املوجة اخل�ضراء ( يونيب)‬

‫حملة التربع بالدم‬

‫‪Green Wave (UNEP) Campaign‬‬

‫‪Blood Donation‬‬

‫حفل تكرمي �أبناء املوظفني املتفوقني‬ ‫‪Employees’ outstanding children honouring ceremony‬‬

‫‪48‬‬

‫التقـريــر السـنـوي ‪2017‬‬

‫‪2017 Annual Report‬‬

‫‪41‬‬

‫)‪Gulf Petrochemical Industries Co. BSC (C‬‬

‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة)‬

‫األنشطة والفعاليات اإلجتماعية‬

‫‪Social Events & Activities‬‬

‫احلفل ال�سنوي الثامن والثالثني‬ ‫‪38th Annual Day Celebration‬‬

‫حملة تنظيف ال�شواطئ‬ ‫‪Beach Cleaning Campaign‬‬

‫�إحتفال ال�صحة وال�سالمة العائلي‬ ‫‪Family Safety, Health & Environment Celebration‬‬

‫‪47‬‬

‫التقـريــر السـنـوي ‪2017‬‬

‫‪2017 Annual Report‬‬

‫‪42‬‬

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫المسؤولية اإلجتماعية‬

Corporate Social Responsibility

)‫مركز البحرين للدرا�سات اال�سرتاتيجية والدول ّية والطاقة (درا�سات‬ Bahrain Centre for Strategic, International and Energy Studies (Derasat)

‫املجل�س الأعلى للمر�أة‬ Supreme Council for Women

‫نادي البحرين للتن�س‬ Bahrain Tennis Club

43

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

46

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫المسؤولية اإلجتماعية‬

Corporate Social Responsibility

‫هيئة �ش�ؤون الإعالم‬

‫امل�ؤ�س�سة اخلريية امللكية‬

Information Affairs Authority

Royal Charity Organization

‫الإحتاد البحريني لكرة الطاولة‬ Bahrain Table Tennis Association

‫نادي را�شد للفرو�سية و�سباق اخليل‬ Rashid Equestrian and Horseracing Club

44

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

45

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫المسؤولية اإلجتماعية‬

Corporate Social Responsibility

‫مركز عي�سى الثقايف‬

‫الإحتاد البحريني لكرة ال�سلة‬

Isa Cultural Centre

The Bahrain Basketball Association

‫برنامج ويل العهد للمنح الدرا�سية العاملية‬ The Crown Prince International Scholarship Programme

‫جمعية عايل للعمل اخلريي‬ A'Ali Charity Work Society

45

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

44

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫لجنة المرأة‬

Ladies Working Committee

‫م�ست�شفى امللك حمد اجلامعي‬ King Hamad University Hospital

‫مركز املحرق للرعاية االجتماعية‬ Muharraq Social Welfare Centre

46

‫اجلمعية البحرينية لتنمية املر�أة‬

"‫التربع بحقائب مدر�سية لطلبة "مدر�سة بدر الكربى االبتدائية للبنني‬

Bahrain Women Development Society

School bag distribution to "Badr Al Kubra Primary Boys School"

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

43

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫المعارض‬

Exhibitions

‫معر�ض ال�شرق الأو�سط الع�شرين للنفط‬

‫معر�ض ال�شرق الأو�سط الرابع لل�صيانة واالعتمادية‬

20th Middle East Oil Conference and Exhibition

Fourth Maintenance and Reliability Conference

‫املعر�ض البحريني امل�صري امل�شرتك‬ 1st Bahraini Egyptian Exhibition

47

‫املعر�ض الزراعي التعليمي الثاين‬

‫يوم املهن بجامعة البحرين‬

2nd Educational Agricultural Exhibition

University of Bahrain Career Week Exhibition

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

42

Gulf Petrochemical Industries Co. BSC (C)

)‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة‬

‫المعارض‬

Exhibitions

‫م�ؤمتر ومعر�ض م�صر الدويل ل�صناعة الأ�سمدة‬ Egypt International Fertilizer Industry Conference and Exhibition

‫معر�ض البحرين الدويل للحدائق‬ Bahrain International Garden Show

‫امل�ؤمتر املهني الثاين ع�شر للجمعية الأمريكية ملهند�سي ال�سالمة العامة املهنية‬ )‫( فرع ال�شرق الأو�سط‬ 12th Professional Development Conference & Exhibition for Safety (Middle East)

)‫املنتدى ال�سنوي الثاين ع�شر للإحتاد اخلليجي للبرتوكيماويات والكيماويات (جيبكا‬ 12th Annual Gulf Petrochemical and Chemical Association (GPCA) Forum and Exhibition

48

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

41

Gulf Petrochemical Industries Co. BSC (C)

Gulf ‫ب‬ Petrochemical Industries Co. BSC (C) )‫(مقفلة‬ ‫البتروكيماويات ش م‬ ‫الخليج لصناعة‬ ‫شركة‬

‫الزيارات الرسمية لمجمع الشركة‬

Official Visits to GPIC Complex

‫رئي�س الإحتاد العام لنقابات عمال ال�سودان‬ Chairman of the Sudanese Labor Union

‫وفد املجل�س الأعلى للمر�أة‬ Supreme Council for Women delegation

‫طلبة وطالبات جامعة مو�سكو‬ Moscow University students

49

2017 Annual Report

2017‫السـنـوي‬ Annual ‫التقـريــر‬ Report 2017

49 40

‫شركة الخليج لصناعة البتروكيماويات ش م ب (مقفلة)‬

‫الزيارات الرسمية لمجمع الشركة‬

‫�سعادة ال�سفري التون�سي لدى للمملكة البحرين‬ ‫‪H.E. the Tunisian Ambassador to the Kingdom‬‬

‫)‪Gulf Petrochemical Industries Co. BSC (C‬‬

‫‪Official Visits to GPIC Complex‬‬

‫معايل الدكتور ال�شيخ عبداهلل بن �أحمد �آل خليفة‬ ‫رئي�س جمل�س الأمناء ‪ -‬مركز البحرين للدرا�سات اال�سرتاتيجية والدول ّية والطاقة‬ ‫‪H.E. Dr. Shaikh Abdullah bin Ahmed Al Khalifa,‬‬ ‫‪Chairman of the Board of Trustees at DERASAT‬‬

‫‪39‬‬

‫نادي روتاري املنامة‬

‫نادي روتاري ال�سلمانية‬

‫‪Rotary Club of Manama‬‬

‫‪Rotary Club of Salmaniya‬‬

‫وفد �شبابي من جمهورية م�صر العربية‬

‫طاقم العالقات العامة والإعالم بال�شركة ال�سعودية لل�صناعات الأ�سا�سية (�سابك)‬

‫‪Egyptian youth delegation‬‬

‫)‪Saudi Basic Industries Company (SABIC‬‬ ‫‪Corporate Communications Team‬‬

‫التقـريــر السـنـوي ‪2017‬‬

‫‪2017 Annual Report‬‬

‫‪50‬‬

Gulf Petrochemical Industries Co. BSC (C)

Official Visits to GPIC Complex

Gulf ‫ب‬ Petrochemical Industries Co. BSC (C) )‫(مقفلة‬ ‫البتروكيماويات ش م‬ ‫الخليج لصناعة‬ ‫شركة‬

‫الزيارات الرسمية لمجمع الشركة‬

‫ وزير العمل والتنمية الإجتماعية‬- ‫�صاحب ال�سعادة الأ�ستاذ جميل بن حممد حميدان‬

‫ املبعوث اخلا�ص بالديوان امللكي‬- ‫�صاحبة ال�سعادة الأ�ستاذة �سمرية �إبراهيم بن رجب‬

H.E. Mr. Jameel Humaidan, Minister of Labour and Social Development

H.E. Ms. Sameera bint Ibrahim Rajab, Special Envoy at the Royal Court

‫نائب رئي�س جمل�س �أمناء مركز عي�سى الثقايف‬

‫وفد من الربملان الرو�سي‬

Deputy Chairman of the Board of Trustees of the Isa Cultural Centre

Russian Parliament Delegation

51

‫وفد الإحتاد العام لنقابات العمال العرب‬

‫اللجنة ال�صناعية بغرفة جتارة و�صناعة البحرين‬

International Confederation of Arab Trade Unions Delegation

Bahrain Chamber of Commerce and Industry’s Industrial Committee

2017 Annual Report

2017 ‫التقـريــر السـنـوي‬

38