GPIC Annual Report 2019 English

2019

Annual Report

YEARS OF SUSTAINABLE EXCELLENCE Gulf Petrochemical Industries Company Kingdom of Bahrain

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

GPIC Annual Report 2019

IN 2019, THE COMPANY WAS ABLE TO RECORD THE HIGHEST ANNUAL PRODUCTION SINCE THE OPENING OF ITS FACTORIES, REACHING 1,503,808 TONS OF AMMONIA, UREA AND METHANOL DR. AHMED AL SHARYAN - GPIC CHAIRMAN

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GPIC Annual Report 2019

CONTENTS Chairman’s Message

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The Board of Directors

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The Board of Directors’ Report to the Shareholders

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Corporate Governance

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Executive Management

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President’s Foreword

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GPIC’s Vision, Mission & Corporate Values

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Sustainability

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Safety, Health and Environment

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ERM and Business Excellence

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Production

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Technical Service Support

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Plants Maintenance

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Procurement & Warehousing Department

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Sales and Exports

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Human Resource Development

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Corporate Social Responsibility

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Educational & Community Visits

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Conferences & Exhibitions

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Official Visit to GPIC Complex

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GPIC Annual Report 2019

THE CHAIRMAN’S MESSAGE

During 2019, GPIC was awarded the RoSPA International Safety and Chemical Sector Awards by the Royal Society for Prevention of Accidents (RoSPA) from the UK for its excellence in occupational health, safety and the environment, as well as the Arab Award for Social Responsibility for 2019, granted by the Arab Network for Social Responsibility in institutions. These awards were presented to GPIC for its outstanding application of SHE standards and for undertaking a leading role in this area. In addition, due to its responsible and safety reputation GPIC has been exempted from monitoring by the Supreme Council for the Environment when importing and clearing chemicals during the standard customs clearance operations, this means it has been put on the White List.

GPIC was also chosen as one of the distinguished workplaces for 2019, specifically in the field of occupational safety and work environment safety and several of its prominent employees were honoured.

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

We have ended 2019 with remarkable achievements not only for GPIC but also for the Kingdom of Bahrain. Our 2019 turnaround was successfully completed in a safe, secure, efficient and productive manner and our new Urea Formaldehyde plant was effectively commissioned and started operations at the end of December.

With the passing of 2019, and the celebrations of its 40th anniversary, GPIC has been able to remain unique in its leadership in the fields of industry and the environment, thanks to God Almighty and to wise management of GPIC’s Board of Directors.

This has contributed to Bahrain becoming a prominent player in the petrochemical industry.

In recognition of its efforts, GPIC continued to attain distinguished and diverse achievements. These were not just in Bahrain but also the Arab world and beyond. In relation to Health and Safety GPIC’s constant efforts to improve culminated in achieving a record +32 million working hours for its workforce and contractors without any lost time accident, which exceeds 16 years of safe work.

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Continuing on their wave of success, the company won the IFA 2019 Industry Stewardship Champion Gold Medal, an award given by the International Fertilizer Association. It was also presented with the Procurement Risk Management Award in recognition of its successful managing of procurement risks and using advanced solutions, while providing services efficiently and with speed and accuracy.

In acknowledgement of its targeted initiatives and various programmes to support the economy, the company won three awards. These included the Best Performance Award for 2019, the Mohammed bin Rashid Al Maktoum Business Award 2019 and the Mohammed bin Rashid Al Maktoum Award for Business Innovation 2019. It also won the Dubai Chamber of Commerce and Industry Award for Corporate Social Responsibility, awarded for excellence in implementing its innovative programmes in community service and sustainability.

We also celebrated the total production in 2019, as it was not only higher than the previous year but it has been the highest ever production and export achieved since inception. GPIC produced a total of 1,644,590 tons of ammonia, urea and methanol, its highest annual production. The urea plant also achieved its highest production ever at 727,244 tons.

Due to the ongoing unpredictable global economic conditions, prices have fallen sharply for the GPIC’s products in the second half of 2019, however GPIC was still able to achieve profits that amount to 33.98 million dollars by the end of the year.

GPIC Annual Report 2019

GPIC has continued to work hard to build on these successes and has received praise and recognition from its Shareholders for its relentless and driven attitude to sustainability, corporate social responsibility and beyond excellence results. This stewardship has helped charter GPIC’s course safely through the current volatile market and economic conditions that are affecting the industry. We have continued to build on the enhancement and streamlining of our internal processes, as well as our focus on cost optimization and business continuity.

This outstanding performance, and continuous achievements, would not have been possible without the grace of God Almighty and the support and guidance of the wise leadership that has steered it to create a fertile investment environment.

We express our gratitude to His Majesty King Hamad bin Isa Al Khalifa, may God protect him, His Royal Highness Prince Khalifa bin Salman Al Khalifa, the Prime Minister, may God protect and preserve him, and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister, may God protect and preserve him. We ask God Almighty to make them an asset and a support for this country and the loyal people and to perpetuate the blessings of security and safety for all.

Our thanks also goes to all government institutions in Bahrain and our honorable shareholders – the Bahrain Oil and Gas Holding Company in Bahrain (Nogaholding), the SABIC Agri-Nutrient Investments Company and the Petrochemical Industries Company (PIC) of Kuwait for their continuous support and encouragement.

Sincere appreciation also for all the efforts made by the members of the Board of Directors. Their wise policies, inspired opinions and high levels of professionalism that have had a significant impact on the company’s success and prosperity.

Finally, my sincere thanks and deep gratitude goes to the President of GPIC, members of the Executive Management and all our Employees for their loyalty, dedication to work and their efforts, which made all of these achievements a reality.

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

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GPIC Annual Report 2019

THE BOARD OF DIRECTORS

1. H.E. Dr. Ahmed bin Ali Alsharyan Chairman

5. H.E. Mr. Ahmed M. Alumar Board Member

2. H.E. Mr. Hamad Dekheel Alsubaie Deputy Chairman

6. H.E. Mr. Shafi Taleb Alajmi Board Member

3. H.E. Mr. Samir bin Ali Al-Abdrabbuh Managing Director

7. H.E. Mr. Salem Ali Alazmi Board Member

4. H.E. Shaikh Fahad bin Salman Al Khalifa Board Member

8. H.E. Mr. Ali Ahmed Alghamdi Board Member

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GPIC Annual Report 2019

BOARD OF DIRECTORS’ REPORT TO SHAREHOLDERS

At the outset, GPIC’s Board of Directors would like to extend its sincere congratulations to the Shareholders, the President, members of the Executive Management and all Employees on its 40th Anniversary, during which it has achieved many significant milestones and cemented itself as one of the leading petrochemical companies.

The year 2019, has been marked by many successes at both local and international levels. GPIC achieved +32 million working hours for its workforce and contractors without any lost time accident, exceeding 16 years of safe work since May 2002.

The Board of Directors is delighted to present to the shareholders its annual report for 2019, this year’s annual report includes the achievements made by the company, as well as activities related to the fields of occupational health, safety and the environment and financial, technical, administrative and marketing activities.

On the production front, the company produced 451,429 tons of methanol, 465,917 tons of ammonia, and 727,244 tons of urea. The close cooperation with the marketers, the SABIC Agri-Nutrient Investments Company and the Petrochemical Industries Company of Kuwait contributed to the smooth and continuous export

At the outset, GPIC’s Board of Directors would like to extend its sincere congratulations to the Shareholders, the President, members of the Executive Management and all Employees on its 40th Anniversary. of the company’s products. These were loaded onto 62 ships throughout the year. The company won numerous awards during 2019, including two global awards in the field of occupational safety and health from the Royal Society for the Prevention of Accidents (RoSPA) and the IFA 2019 Industry Stewardship Champion Gold Medal granted by the International Fertilizer Association. In addition, the company was chosen to be amongst the distinguished workplaces of 2019 in the field of occupational safety and work environment safety. A number of the company’s notable employees were also honoured. In spite of the challenges faced throughout the year, the Board of Directors are delighted to report, GPIC achieved a net profit totaling $ 33.98 million.

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GPIC Annual Report 2019

BOARD OF DIRECTORS' REPORT TO SHAREHOLDERS

There is no doubt that GPIC’s status and the respected reputation it enjoys would not have been possible without the grace of God Almighty and the guidance and support the company always takes pleasure in from the wise leadership of Bahrain.

The Board of Directors is pleased to express its sincere thanks and deep gratitude to His Majesty King Hamad bin Isa Al Khalifa, may God protect him, His Royal Highness Prince Khalifa bin Salman Al Khalifa, the Prime Minister, may God protect and preserve him, and His Royal Highness Prince Salman bin Hamad Al Khalifa, Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister, may God protect and preserve him, for all their support and guidance over the last year.

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The Board of Directors also extends its thanks and gratitude to the Shareholders, the Bahrain Oil and Gas Holding Company in Bahrain, the SABIC Agri-Nutrient Investments Company and the Petrochemical Industries Company (PIC) of Kuwait for their close cooperation, high professionalism and eagerness to ensure success of the company by providing continuous support to operational and marketing operations.

The Board of Directors also commends the sincere efforts of the company President, members of the Executive Management and all the Employees who have worked as a team and as a family to preserve the company’s position and its profits.

GPIC Annual Report 2019

CORPORATE GOVERNANCE

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 various other stakeholders.

The company’s Corporate Governance principles have been 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 of principled goal-setting, effective decision making and ethical actions, with the objectives of establishing a fundamental corporate entity that - on a long term basis - drives value creation to the company’s shareholders and promotes sustainable business conduct in line with the principles outlined in the company’s Articles of Association.

The Corporate Governance Policy of Gulf Petrochemical Industries Company and Bahrain’s Corporate Governance Code resulted in the formation of three high level Committees; the Audit, Finance and Risk Committee, the Remuneration, Nomination and Governance Committee and the company’s Strategy Implementation Committee – 2030. These three committees are created to assist the Board of Directors in the effective performance of their governance and oversight responsibilities.

Committees’ Composition All Committees are comprised of at least three Directors. Each Director is nominated by Sabic Agri-Nutrients Investments Company (Sabic), Petrochemical Industries Company (PIC) and The Oil and Gas Holding Company (Nogaholding), representing the three shareholders.

Role of the Remuneration, Nomination and Governance Committee The Committee is responsible for overlooking the overall remuneration and nomination process, as well as ensuring the strength of the organization’s governance. The Committee’s main task is to ensure compliance with the Kingdom of Bahrain’s Corporate Governance Code regulations and mandates.

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, such as; the integrity of the company’s financial statements and financial reporting, internal control and risk management process, internal audit function, independence and performance of the external auditors, compliance with ethics policies and legal and regulatory requirements, governance and other matters as enumerated in the Audit, Finance and Risk Committee Charter.

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GPIC Annual Report 2019

CORPORATE GOVERNANCE

Role of The Company’s Strategy Implementation Committee – 2030 The purpose of The Company’s Strategy Implementation Committee – 2030 is to conduct a full review and studies of all major projects, as well as reviews and studies of all investment opportunities. The creation of this Committee will help ensure no major projects or investment opportunities have been overlooked and that the company has an optimum investment portfolio.

Internal Audit Function GPIC’s Internal Audit Section 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 Management in effectively discharging their responsibilities by providing them with

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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.

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 Section, effectively established and resourced, provides reasonable assurance to the Board of Directors and Management of GPIC on whether the controls to manage key risk areas are designed and operating effectively or identify important improvement opportunities where Management actions are necessary.

The GPIC Internal Audit Section 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.

GPIC Annual Report 2019

EXECUTIVE MANAGEMENT

1. Dr. Abdulrahman A. Hussain Jawahery President

7. Mr. Jassim Ahmed Darwish

Maintenance Manager

2. Mr. Fadhel Malalla Al Ansari

General Manager Corporate Support

8. Mr. Bader Mohammed AlMansoori

Technical Services Manager

3. Mr. Yasser A. Rahim Alabbasi

General Manager Manufacturing

9. Mr. Ahmed Mubarak Aarabi

Procurement & Warehousing Manager

4. Mr. Adnan A. Razzaq Al Mahmood

Information Technology & Knowledge Manager

10. Mr. Jehad Ali Khalfan

Finance & Marketing Manager

5. Ms. Najat Mohamed Sharif

Human Resources & Corporate Communications Manager

11. Mr. Jamal Ali Al Shawoosh

Safety, Security, Health & Environment Manager

6. Mr. Khalid Yusuf Al bin Ali

Plants Operation Manager

12. Mr. Omar Naser Al Bastaki

Chief Internal Auditor and Secretary to the Board

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GPIC Annual Report 2019

PRESIDENT’S FOREWORD

Some of the many highlights of this year have been the awards and recognition we have received. We are immensely proud to receive awards, such as; the UK’s Royal Society for the Prevention of Accidents (RoSPA) International Safety and Chemical Sector Award and the Arabian CSR Award. The Dubai Chamber also awarded GPIC a CSR Label, and I was extremely honoured to receive the International Diploma from the British National Council for Occupation Health and Safety Examinations (NEBOSH) and received Special Recognition for 10 Years of GPCA Responsible Care. GPIC was also awarded the Mohammed bin Rashed Al Maktoum Business Aware Certificates and the Industry Stewardship Champion Award from IFA. We also received the Corporate Social Responsibility Award in the Arab States from the Regional Social Responsibility Network, the RoSPA HSE Award, Procurement Risk Management Award and Maintenance Excellence Certificate.

Dr. Abdulrahman Jawahery President

Throughout 2019, GPIC has also invested extensively into building the capabilities of the Kingdom’s future generations through its various educational programmes and partnerships. Our employees have remained fully engaged in developing, sharing knowledge and sponsoring key initiatives to support and build our great country.

We have been through many developments during 2019, in sometimes less than favourable circumstances and the year was quite a year for all of us at GPIC. We continue the uncertainty, complexity and volatility of our industry around the globe and we have faced many challenges given the extremely difficult market conditions and economic volatility underpinning our markets.

However, our resilience to overcome these challenges is, as always, 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 40 years.

Notwithstanding this, we have also accomplished a huge amount.

Safety is always our number one priority and of paramount importance to us, and this year we have had no LTA for either our employees or contractors, which adds up to 32 million man hours without LTA.

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GPIC continued to maintain its strong investment in people development throughout 2019, structuring effective training sessions and courses to build the capability of the company’s future leaders.

Throughout 2019, GPIC also invested extensively into building the capabilities of the Kingdom’s future generations through its various educational programmes and partnerships. The company has also continued to pass on its knowledge and expertise across the industry and across the region, in sustaining the environment and ensuring the adoption of sustainable technologies and processes.

At the community level, everyone at GPIC recognises the importance of a sustainable and effective Corporate Social Responsibility strategy. Our employees have remained fully engaged in developing, sharing knowledge and sponsoring key initiatives to support and build our great country. We ultimately know and believe that, through CSR leadership, innovation, partnerships and accelerating youth empowerment we can guarantee a more prosperous and sustainable future for societies and our planet.

We ask Almighty God to enable us to continue succeeding as an organisation and as a country and, we thank our Kingdom’s wise leadership, which has enabled us to achieve all of our tremendous success.

Dr. Abdulrahman Jawahery President

GPIC Annual Report 2019

THROUGHOUT 2019, OUR ENTIRE BUSINESS HAS CONTINUED TO IMPLEMENT AND SEEK OUT NEW OPPORTUNITIES IN OPERATING COSTS, ENHANCING SAFETY AND, OPERATING OUR PLANTS WITH THE UTMOST EFFICIENCY AND EFFECTIVENESS IN PRODUCTION AND QUALITY OF PRODUCT. DR. ABDULRAHMAN JAWAHERY - GPIC PRESIDENT

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GPIC Annual Report 2019

GPIC’S VISION, MISSION & CORPORATE VALUES

We move ahead, drawing strength from our vision, mission and values Vision

Mission

Values

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

• To produce high quality petrochemical and fertilizer products • To grow through successful partnerships and joint ventures • To optimise the business in a safe, sustainable and cost effective manner • To embrace knowledge, harness innovation and utilise best applicable technologies and practices • To boost Stakeholders share value • To train and develop the Human Capital to realise their full potential

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

GPIC Annual Report 2019

SUSTAINABILITY

40 Years of Sustainable Excellence This year is very special for GPIC as we celebrate 40 years of sustainable success and it marks the eighth anniversary of our commitment to the United Nations Global Compact (UNGC).

Whilst much has changed in the world and in our Company over the past years, our commitment to Sustainability and Sustainable Development remains firm.

These years have 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 scaling up sustainability efforts and 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.

same. Our most recent initiative is linking our Capex Projects and modifications to the relevant SDGs and all this is done through an automated MOC process.

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

Utilising the globally established GRI framework we have conducted the third most extensive stakeholder engagement to ascertain the materiality of the sustainability issues we advocate. All the members of our Sustainability Reporting Committee are trained on GRI standards enabling them to effectively prepare and publish the GRI Sustainability reports and GPIC’s Fifth GRI Sustainability Report is due in Q1 2020.

GPIC’s triple bottom line business approach aligns strongly to the UN SDGs. We have moved from the traditional three P’s (People, Planet and Profit) to the five P’s (People, Planet, Prosperity, Peace and Partnerships) model of Sustainable Development. GPIC a proud supporter of the global goals, 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 programmes 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

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GPIC Annual Report 2019

SUSTAINABILITY

As a committed member of the UN Global Compact, we have issued our Communication on Progress (COP) report in March 2019 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 members are certified trained on IPCC GHG inventory software have issued the Company’s 2018 GHG Inventory Report and the next 2019 report was issued in February 2020.

GPIC’s leadership commitment and support for sustainable agriculture, food security and poverty eradication and its engagement with international organsations such as; UNGC, UN Environment, and FAO continued to be significant.

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We continue to benchmark ourselves with the best in class and were awarded the Arabia CSR Award 2019 in the Large Organisations Category and the Partnerships and collaboration category for our outstanding achievements in Corporate Social Responsibility and Sustainability in the MENA region. Winning the Arabia CSR Award for the fifth consecutive year 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, partnerships and accelerating youth empowerment we can guarantee a more prosperous and sustainable future for societies and our planet.

GPIC Annual Report 2019

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GPIC Annual Report 2019

SAFETY, HEALTH AND ENVIRONMENT

We are successful at GPIC because Health, Safety and Environmental (HSE) management systems is not just a programme; it is a way of life for us. As a forward-looking petrochemical and fertiliser company, GPIC recognises that our commitment to HSE is the foundation for building and maintaining trust and public confidence.

It is part of being a good citizen, a good neighbour and a good partner.

HSE excellence drives our commitment to sustainable business and defines who we are and what we stand for. By instilling a culture that ensures the well-being and safety of our employees, we empower them to focus on the details and to do what is right, first time, every time. This leads to improved performance and reliable, consistent and predictable delivery of our high-quality products.

At GPIC, safety, health and environmental performance is at the top of our agenda and is measured, reported, evaluated and continuously improved upon. It is part of our company’s regular review process and we have set stringent, clear and visible goals with leading and lagging indicators throughout all levels and processes of the organisation. We focus and apply measures to all of the elements of safety culture; Systems and Processes; Skills and Knowledge of Individuals; Behaviours; Attitudes, Perception and Leadership. We have long realised and recognised that there is no single reliable measure of health and safety performance. What is required is a variety of measures providing information on a range of health and safety activities.

As a forward-thinking company, GPIC understands the worker safety dimension of sustainability and has started proactively leveraging the OHS and sustainability connection. With the launch of the UN’s 17 Sustainable Development Goals (SDGs), GPIC is using these global strategies to underpin its sustainability efforts.

In 2019 the biggest achievement was to maintain our excellent HSE achievements through visible safety leadership, focused risk management, enhanced safety and emergency response training, audits and benchmarking. Some of the noteworthy initiatives and programmes of 2019 include the weekly safety summary highlighting the incidents, root cause analysis, positives and focus areas. Fire plans for high-risk scenarios were also prepared enhancing the emergency response preparedness. OHSAS 18001 was successfully transited to ISO 45001. In 2019 we rolled out a comprehensive Safety Related Training plan for 2019-2021 focusing on Emergency Response. Specialised Training including Fire Fighter and Hazmat Training. Certified training courses such as NFPA Fire Code and NFPA 101 Living Safety Code and Authorised Gas Tester and Radiation Awareness Courses were provided.

These continual improvement efforts culminated in achieving a record +32 million working hours for its workforce and contractors without any lost time accident, exceeding 16 years of safe work.

Moreover, we did not have any Tier 1 and Tier 2 process safety incidents, zero reportable environmental incidents and zero security breaches and incidents.

With regard to its excellence in occupational health, safety and the environment, GPIC has been awarded the RoSPA International Safety and Chemical Sector Awards from the Royal Society for Prevention of Accidents (RoSPA) from the UK. These awards were presented to GPIC for its outstanding application of SHE

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standards and for undertaking a leading role in this area. GPIC also successfully completed the construction and commissioning of its new Urea Formaldehyde (UF-85) Unit of the Urea Plant with no lost time injury.

We also won the Ministry of Labor award for the “Excellence in the Occupational Safety and Safe Working Environment”.

The following is a list of significant Safety, Security, Health and Environment (SSHE) achievements during 2019: • Safety training continued to be provided for both Operations and Non-Operations personnel. During 2019 there were 55 Modulised Emergency Response Training (MERT) sessions, attended by plants operation personnel.

• GPIC’s First Aid Training and Community Outreach Programme with the 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.

• Walk the Procedure initiative launched. The first of its kind, with a related Standing Instruction. Ten SOPs are selected related to fire equipment maintenance, emergency response etc. and the concerned fire operator demonstrates practically to the safety supervisor all the steps as articulated in the SOP. • 172 employees have attended Safety Media e-learning courses and 60 hours of Safety Media e-learning were completed in 2019. These courses are instructionally designed to engage 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 the majority now achieving RoSPA accreditation.

• Fire & Safety and Process Safety Campaigns through safety moments, process safety beacons and flashes were enhanced in 2019. One hundred and twenty flashes, videos, and safety moments. Twelve process safety beacons and 10 EPSC Lessons learned. Main campaigns were; on hand safety, safety glasses, near miss reporting, speeding, safety culture; safety complacence. Similarly Environmental, Sustainability and SDG campaigns through +100 flashes, videos + newsletters. Main

GPIC Annual Report 2019

campaigns were on; Zero plastic, paper consumption reduction, recycling, responsible consumption and production, climate change, SDGS Awareness and GRI Reporting etc.

• The SHE Family Night is one of the main annual events of the company and was organised this year in Ramadan with the Theme “The future of Safety”. This event was 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 organised 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.

• Replacement of existing conventional lights in process areas, non-process areas, buildings and street lights with energy efficient LEDs has been ongoing since 2013. In 2019 2312 LED light fittings were installed, with an energy saving of 365.97 MWH/year and a total reduction in carbon emissions by 200 tons per year.

• As part of Post COP 21 requirements; GPIC’s Climate Change Committee used IPCC GHG Inventory software 2006 and issued its fourth GHG Inventory Report in 2019.

• GPIC in cooperation with UN Environment and Ministry of Education continued with the Green Wave initiative that was launched in 2015. Through this programme 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, the students plant saplings, such as; pomegranate and olive. Since the launch of the programme in 2015, 90 schools have benefited from the programme with the distribution of 3,600 sapling trees in total.

• To expand further green areas within GPIC a new Neem Tree Garden was inaugurated in 2019. This garden has 150 Neem Trees, famous for its medicinal benefits.

• To date we have recycled 150 tons of plastic, paper, metal cans and cardboard. Additional waste recycling points were introduced in employees car park and the GPIC Club. During 2019 through an effective waste recycling programme 17 tons of waste was recycled.

• Publicising 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 programme is over 42,000 since its inception in 2001. From 2015, Responsible Care Awareness is also being imparted in addition to Environmental Awareness.

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

• As part of the Health Awareness programme GPIC’s Medical Center arranged several lectures to increase the employees’ health awareness on subjects like Breast cancer, Diabetes, Cupping Therapy etc. Additionally, various health campaigns took place such as; GPIC Smoke-Free Campaign, Beat the Heat Campaign and Obesity Management Programme.

• More than 320 employees were screened at GPIC Medical Centre as part of the periodic medical examination during 2019.

• As part of corporate social responsibility more than 181 GPIC employees donated 141 units of blood during 2019.

• 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.

• In 2019 advanced Security Training on ISPS, Maritime Security, Physical Security and Asset Protection was conducted.

• GPIC continued to chair the Bahrain Chapter of ASIS (American Society of Industrial Safety).

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GPIC Annual Report 2019

ERM AND BUSINESS EXCELLENCE

In order 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 emphasse the alignment of all business operations to the company’s overall vision and its drive for Sustainability. This is achieved 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 are continuously improved and aligned to the specific requirements at any given time.

GPIC’s Management and Committees hold periodic management meetings to review and monitor the performance and efficiency of its dual Integrated Management Systems (PAS 99). These include Quality Management Systems ISO 9001; Occupational Health & Safety Management Systems ISO 45001; Environmental Management Systems ISO 14001; Responsible Care Management System (RC 14001); Information Security Management Systems (ISO 27001); Business Continuity Management Systems (ISO 22301); Energy Management Systems (ISO 50001) etc.

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

In this context, the company was able to deservedly obtain the newest certificate for OH&S - ISO 45001:2018 after completing the evaluation and review process by the certified external auditor on all GPIC’s systems related to occupational health and safety.

The company has also been successful in achieving and fulfilling all the requirements of the certification system related to general requirements for the competence of testing and calibration laboratories ISO 17025, which is the most up to date version - 2017.

This certificate covers both the Laboratory and the Maintenance Instrument Sections. Gulf Petrochemical Industries Company (GPIC) is considered one of the first companies operating in the oil and gas field in the Kingdom of Bahrain to obtain this certificate, started in 2016.

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



 





   





   



   

      

                           

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           









   





   



 

  

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  

  

  

  

  











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

 

 

 

 

 

 

 

 

 

 

 

 





 

       



                       

   

     

     

     

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           

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20

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GPIC Annual Report 2019

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

safeguards the company’s ability to fulfil its obligations to shareholders, clients, customers, employees, society and all of its interested parties, in the shortest time possible and at the lowest realistic associated costs.

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.

There were approximately 70 internal audits conducted during 2019, 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 of continuous improvement. In addition, different certified bodies also conducted 7 external and independent audits on various standards during the year. All external audits concluded that the company was committed to implementing these management systems and fully compliant with Bahrain’s laws and legislation. The ERM and Business Excellence Section is proud to confirm that all internal and external audits have been successfully concluded on schedule.

One of the most important activities of the Committee during the year was to establish a comprehensive and thorough review of all corporate risks. This review resulted in a reformulation and classification of potential corporate risks to which the company might be exposed to.

The ERM and Business Excellence Section presented during 2019 a new and different work methodology for the Business Continuity Management System ISO 22301, which was built on the basis of the direct impact of the disruption in electronic services and products produced (ammonia, urea and methanol) on the users and customers of the company.

The Committee has also worked diligently to develop clear and well-defined 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

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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, organisational internal procedures at all stages and sections of the company’s business and, contributing to the organisation’s continuity of workflow and desired goals.

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        

                          

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           

      

        

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           









 

              

 

         





 

 

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

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  

  

 

  

   

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

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   

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  

 

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      

 

 



 

 

 

  

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                       

   

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      

      

 







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   

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      

 

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                  

                 

            



       



 





      

 



  

   

  



 

  





   





        

  



21

GPIC Annual Report 2019

PRODUCTION

2019 was another successful year, all Plants operated in a safe, reliable and efficient manner whilst maintaining specified standards in terms of quality for all products.

All plants registered excellent records in regards to performance factors (On stream factor, Capacity Utilisation and Utilisation Factor).

Year 2019 Main Highlights: • The average daily production achieved during 2019 were: o 1,273 tones/day Ammonia, Year total Ammonia production 465,917 tones o 1,989 tones/day of Urea, Year total Urea production 727,244 tonnes o 1,233tones/day of Methanol, Year total Methanol production 451,429 tonnes • Urea Plant registered on 4th March the highest ever daily production of 2,108 MTPD. The previous highest record was 2080 MT. • Urea Plant registered during January the highest ever daily average production of 2,093.8 MT. The previous highest record was 2019 MT • Urea Plant registered during January the highest ever monthly production of 64,909 MT. The previous highest record was 62,300 MT

Product

• The total combine production for the month of January reported 143,127 MT, the highest ever achieved.

• The total cumulative combined production since 1985 achieved 42 million tonnes.

• The actual cumulative total production upto end of December was 1,644,590 MT the highest ever. The previous highest record was 1,617,422 MT • Ammonia plant completed 613 days of continuous production run by the end of December 2019, since April 2018 Turnaround.

• Urea plant completed 615 days of continuous production run by the end of December 2019, since April 2018 Turnaround.

• Methanol plant completed 621 days of continuous production run by the end of December 2019, since April 2018 Turnaround.

• The Urea plant registered the highest ever yearly production since inception with production figure of 727,244 MT, The previous highest record was 704,003 MT. • As a part of GPIC’s commitment towards encouraging and supporting Bahrain economy, GPIC continued sustainable supply of Methanol to local market 1,598 MT Methanol was sold during 2019.

Production Figures The table below gives summary of the various budgets versus actual production figures.

Budget (tonnes

Actual (tonnes)

Variance

Ammonia

454,860

465,917

2.4% Higher

Methanol

444,030

451,429

1.7% Higher

Urea

684,000

727,244

6.3% Higher

Ammonia to Urea

389,880

410,165

5.2% Higher

Saleable production

1,188,528

1,230,056

3.5% Higher

Total production

1,582,890

1,644,590

3.9% Higher

Production Performance 2019 - (Production, Million tonnes)

1.50

1.48

1.80

0.37

0 Ammonia

Urea

Budget

22

Methanol

Total

Saleable

0.37

1.13

0.42

0.42

0.66

0.42

0.42

0.60

0.64

1.12

1.20

Ammonia to Urea

Actual

1. The combined products was 3.9% higher than the budgeted figure.

2. Since 1985, cumulative total of 14.5 million tonnes of Ammonia and 14.2 million tonnes of Methanol production was achieved by end of December 2019.

3. Since 1998, 13.6 million tonnes Urea production was achieved by end of December 2019.

Performance Factors: The following graphs indicate sustained high level performance of the plants.

Plants Operation Department - (Onstream Factor %) 150 100

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

50

Plants Operation Department - (Capacity Utilisation %) 150 100

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

1997 1997

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

50

Plants Operation Department - (Utilisation Factor %) 150 100

Ammonia

Methanol

2018

1996

1995

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

50

Urea

Management Systems:

Exports:

• Integrated Management System, Energy Management System, Enterprise Risk Management System and Process Safety Management System were followed rigorously throughout the year. They were audited by both internal and external auditors and the performance was judged highly satisfactory at all levels. The above charts reflect the same.

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

Export (No. of Ships) in 2019

Product Export 2019

• Throughout the year Ammonia, Methanol and Granular Urea were produced to the highest quality specifications, for the premium market. A total of 1.23 million tonnes of product was exported during the year, 2019.

700,000

20

668,569

600,000 500,000

Urea Ammonia

409,712 400,000 300,000

Methanol 200,000

38

4

100,000

49,352

0 Ammonia

Urea

Methanol

23

GPIC Annual Report 2019

TECHNICAL SERVICES REPORT

Laboratory Through a stringent Quality Assurance process, GPIC’s Laboratory strives to ensure quality products are consistently delivered to the customer. The Laboratory provided quality control and quality assurance services to the complex through a wide range of high quality analytical/testing services and support to the Operations Department for reliable and efficient plant operations.

Over 52,500 routine samples were collected from around the complex and analysed for 177,900 parameters. In addition, 4,100 random samples were also analysed for 9,200 different parameters to optimise plant processes. The break-up of the samples and the parameters analysed is shown in the table below.

60000

56,457

52,155 50000

To ensure quality products, it is essential to use the best raw materials during manufacturing and all output from the major intermediate stages of production, including emissions, discharges and waste, are regularly monitored. The Laboratory monitored liquid effluent and gas emissions from the complex according to requirements and directives of the ‘Supreme Council for the Environment’.

The quality of the final product was checked before it was shipped or loaded into trucks or tankers. Approximately 250 Quality Certificates related to GPIC’s three products (Ammonia, Urea and Methanol) were issued by the laboratory during the year.

The break-up of the Certificates issued for Ammonia, Urea & Methanol is shown in the table below.

5000

4,424 4000

40000

3,740 30000

3000

24,872

24,675

2000

1,118

11,720 10000

6,259

1000

6,374

705

475 161

663

386

0

0 Utilities

Methanol

Routine Parameters

Urea

Ammonia

Routine Samples

The Laboratory participated in five proficiency tests conducted by Laboratory Quality System International-USA (LQSi) for Urea and one proficiency test conducted by The Institute for Inter-laboratory Studies – The Netherlands (IIS) for Methanol during the year to fulfill the requirement of ISO 17025, and we are pleased to report that the Laboratory performed well in these tests.

To equip itself with the latest analytical techniques, the Laboratory purchased new instruments during the year. All these were commissioned and hands-on training was delivered to the Laboratory Staff.

To enhance the knowledge and skills of the Laboratory staff, utmost importance was given to training. Laboratory employees were trained either in-house or on-the-job by specialised external agencies to keep them abreast of the latest developments in various analytical techniques. The Laboratory employees attended a number of training programmes throughout the year.

24

1,751

1,663

1,309

20000

Ammonia

Urea

Routine Parameters

Methanol

Utilities

Miscellaneous

Routine Samples

GPIC Annual Report 2019

Engineering Section

Inspection Section:

The year 2019 was another challenging time for the Engineering Section as it was a pre-turnaround year where all approved Capex Projects and modifications have to be processed to meet the target date for the November 2020 scheduled turnaround.

The GPIC Inspection Section continued with its proactive approach towards enhancing the reliability and mechanical integrity of its assets based on the industry best practices and according to the latest revisions of international codes and standards.

During 2019, 14 Capital Projects were approved at an estimated budget of US $12.14 million.

During 2019, a total of 257 inspection reports were issued addressing both periodic preventive inspection of equipment and corrective inspections. Statutory regularity requirements of 62 pieces of equipment were re-certified in 2019. Nine Root Cause Failure Analysis Studies (RCFA) were also conducted, resulting in actions and recommendations towards improving the reliability of the plants.

Some of the critical Capex projects implemented/being processed are: • • • • • • • • • • •

Installation of new Urea Formaldehyde UF85 Unit Replacement of two-diesel fire engines (MD&P 3301A/B).

Replacement of loading two arms (South End) Installation of new security fence along GPIC maintenance causeway.

Study and procurement of steam super heater EB-0302-1B. Refurbishment of boiler B-5203.

Study and procurement of steam generator coil EB-1202-5 Study and procurement of solvent exchanger E-0001A. Procurement of catalyst reformer tubes.

Study and procurement of MUG turbine MT-1401 HP outer casing with exhaust casing.

Study and procurement of ammonia refrigeration compressor K-7101A.

The Engineering Section also completed studying around 150 modifications. All the modifications undergo a rigorous Process Hazards Assessment before being commissioned into the operation to ensure the safety and reliability of the plants.

The Inspection Section was again certified for the ISO 17020:2012 accreditation conformity assessment.

Risk Based Inspection (RBI) initial study for the new Urea Formaldehyde Plant was conducted and revalidation studies were done.

In line with GPIC’s policy on enhancing and updating the skills of employees, inspection engineers were certified and they attended certifying courses through the American Petroleum Institute (API).

The Inspection Section continued its integrity programme and engaged an international inspection agency for the follow up inspection of CAPEX items being manufactured by internationally recognised workshop facilities to ensure compliance with quality assurance requirements.

25

GPIC Annual Report 2019

PLANTS MAINTENANCE

Maintenance Department Achievements during the year 2019 In 2019, 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 closely monitored on a quarterly basis, resulting in the achievement of nearly all objectives.

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

• Replacement of H-7101A/72 01A Loading Arms (Completed).

• Upgrading of Access Control & Attendance System.

• Power brushing & Painting of Transfer Tower, Export Conveyor & Ship Loader.

• All PM maintenance activities are completed as per Winter Schedule.

III. Contract Services • Purchase Requisitions (PRs) raised.

=

81

• Purchase Orders (POs) issued.

=

80

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

• Term Contracts PRs raised

=

130

• 96.8 % of PMRT & INRT Completed [Including BOPA].

• Term Contracts POs issued

=

145

• 100% Execution of Emergency Orders [2019 Target: Zero (0) pending, Total attended: 100 % (Attended: 199).

• Contractors & Suppliers engaged (Total)

=

171

• Contractors & Suppliers engaged (Term Contracts) =

115

• 100% Execution of Urgent Orders [2019 Target: Zero (0) pending, Total attended: 100% (Attended: 987).

• Software Licenses

=

1

• GPR’s raised

=

2

• Maintenance Index [PM/CM ratio] achieved: [Target: 70/30] 70/30 • 87% of Maintenance Orders completed during 2019 (Order Type: PMRT/CMRT/INRT/EPRT/ANRT/GSRT/MDRT/CPRT/ WKRT/RWRT).

Routine Maintenance Orders [Completed] 0.4% 28%

Received : 15,552 Completed : 13,530 • PM Records Reviewed – 1,308 • Rework: Maintenance Orders - 6 • Production Orders completed – 62 • Saving of In House Spare Parts Manufacturing for GPIC Warehouse BD. 138,000/-, until end of December 2019.

II. Major Jobs Executed during 2019 • Construction of a New Urea Formaldehyde Unit.

59.6%

12%

• Construction of access roads & pavements for UF-85 plant.

• Maintenance of Desalination Plant I & II activities are completed.

• High Security fencing work @ Export lines (Completed).

• MD-3301A/B Diesel Engines replacement (In progress)

Corrective Maintenance

Preventive Maintenance

• Shell replacement of tank T-1901 (In progress).

Others

Mods/CapEx

26

GPIC Annual Report 2019

IV. Major Jobs Executed during 2019 • Stock Items (Spares) Consumed. – 6,367 items (BD 1,277,668/-) • Direct Use Material procured. – BD 75,524/• No of SPIRs initiated – 167 Nos. • Estimated Cost of SPIRs – BD. 979,061/• No of Items (Spares) Withdrawn – 7,003 items (BD 1,905,941/-)

• Cost of Materials Ordered for Turnaround (Engineering/ Maintenance) – BD 6,513,486/- including Capex items.

• Job-list Review Meetings conducted - 4 • Number of New Suggestions / Lessons Received – 137 • Value of Stock Items used in TA2018 – BD 4,573,019/-

• No of Items (Spares) Returned - 636 items (BD 628,273/-)

• Number of Service Purchase Requisitions initiated – 90 • Number of Maintenance Orders raised – 3,240 • Number of Modifications - 95 • Number of Capex Packages - 42 • Number of Turnaround Audits Conducted to date - 6 Periodic Audits

100,000 50,000

104,597

150,000

VI. Turnaround Preparation Status for 2019

138,010

200,000

38,777

• Training Hours per Employee - 48 Hrs/employee

40,500

250,000

64,654

• Employees were awarded with Certificate Courses - 50

61,934

300,000

234,015

• Training Courses attended - 194

213,638

350,000

213,638

• Training Hours achieved – 3,729 Hrs.

234,015

400,000

304,501

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

2014 -2019 : IN-HOUSE MANUFACTURING OF SPARE PARTS (Actual Cost [BD] ~ Savings [BD])

265,536

V. Training & Development

0 2014

2015

2016

Routine Parameters Cuml (Actual)

2017

2018

2019

Routine Samples Cuml (Savings)

27

GPIC Annual Report 2019

PROCUREMENT & WAREHOUSING DEPARTMENT

During 2019, GPIC received materials, equipment and services for an approximate value of BD 16 Million to support the maintenance activities and reliability of the plants’ operation. Approximately, 1,329 Purchase Orders for materials/services were issued during the year.

are in progress. The Turnaround will commence in November 2020. The Procurement & Warehousing Department continues follow up with Maintenance and Engineering to ensure all the purchase orders for TA2020 are issued on a timely basis and the materials are available to cater for the TA’s requirements.

The Warehouse service levels continued to remain at more than 99% throughout the year, indicating the ready availability of materials required by the plants with total value of BD 3.8 Million of stock received. It is a reflection of the close and effective action and coordination with suppliers and contractors, who are located both locally and overseas.

As part of process improvement and increase in the effectiveness of the warehousing operations for materials movements and preservation, the Warehousing Section has installed and commissioned a new unit for Automatic Materials Storage. This is the first unit of its kind installed in Kingdom of Bahrain for storing stock items and operates fully automatically based on the requirement. The unit installed has helped in reducing the storage space, eliminating human error, securing the materials and increasing the rate of materials movement.

In keeping with the Company’s cost optimisation Strategy for 2019 whilst ensuring the reliability and safety of the Plants, emphasis was given to stronger commercial negotiation with vendors.

These efforts resulted in a saving of BD 1,153,452/- which is 8% of total purchases negotiated value. Attempts were also made, in consultation with the end users, to procure only essential spares.

The Department has also finalised orders based on competitive offers from EU traders along with authorised local representatives for some OEM spares, which has resulted in another saving of BD 158,610/- (cost saving due to outsourcing from EU traders vis-avis local authorised representatives’ quotes).

In coordination with Maintenance & Procurement & Warehousing Departments all the materials required for the shutdown TA2020

28

Implementation of VAT (Value Added Tax) came into effect in Bahrain from 01/01/2019. GPIC has fully completed the SAP configuration and related modifications in ERP system in time to handle the VAT functionalities, and in line with the statutory requirement of the ‘National Bureau for Taxation (NBT)’ to incorporate the VAT into GPIC’s business operations. The Procurement Team took an active & effective part in coordination of implementation through the provision of necessary inputs, testing the system under development to ensure seamless implementation.

GPIC Annual Report 2019

THE WAREHOUSE SERVICE LEVELS CONTINUED TO REMAIN AT MORE THAN 99% THROUGHOUT THE YEAR

29

GPIC Annual Report 2019

SALES & EXPORTS

Global market activity in 2019 showed different indicators in terms of the irregular pace of growth and was affected by continued instability in the balance of supply and demand.

In addition, there was intense competition in the availability of materials for export with producers, and the decline in the profit margin, which cast a shadow on some countries, such as; China, whose economy witnessed a relatively slow growth due to the general decline in commodity prices.

On top of this, a decrease in the prices of crops, as well as a delay in the agricultural season, due to delayed rains led to a decrease in demand. Other contributing factors for this were the increase in the quantity of urea available for export in China, declining domestic demand, and devaluing of the currency. All of these factors significantly affected fertiliser prices in general and Urea prices in particular.

However, Indian tenders were one of the main drivers of Urea demand, which compensated for less demand in parts of Australia and Southeast Asia in the third quarter.

The petrochemical sector, is directly related to energy sources (oil and gas), due to the dependence of the petrochemical products on those resources for the production process and its direct impact on operating rates and their reflection on the level of petrochemical prices in global markets. It should be noted here that the prices of petrochemical materials, such as; Methanol, are not affected by variables in energy prices only, but are also affected by other factors, including the balance of supply and demand and the prices of other energy sources.

China and the Far East are the most significant importers of Methanol, as it is used as feedstock for many manufacturing industries such as olefins, formaldehyde and acetic acid, etc.

However, the low level of demand in these markets has significant impact on the international prices of Methanol, specifically in China.

Stop production of (MTO) plants which use Methanol as raw material led to an increase in the quantity of Methanol supplied in the market, in addition to increasing global production, with new capacities in America and other countries. These factors led to the low international prices of Methanol.

A total of 728,407 metric tonnes of Urea were sold, which was an increase of 6.5 per cent against what was planned for 2019. The company’s export of all three products were loaded to their final destination on board of 62 ships. This is in addition to 791 metric tonnes bagged urea supplied to the local market in Bahrain.

India acquired the largest share of the company’s total exports at 31 per cent and this market represents a major strategic importance for all producers. This was followed by Taiwan with 17 per cent and Thailand with 11 per cent.

The company’s total worldwide exports of Ammonia was 6.7 million metric tonnes, while its total exports of methanol reached 14.2 million metric tonnes since the start of production in 1985. The total Urea exports reached 13.6 million metric tonnes since the operation of the urea plant began in 1998. The three products combined were more than 34.5 million metric tonnes at the end of 2019.

Despite all the challenges faced by the company in 2019, this did not hamper its production and export operations through which the established goals related to export and sales plans were achieved.

This indicates the integrity of marketing plans and flexible strategies developed by the Board of Directors, in addition to the efforts of the marketers – the Petrochemical Industries Company (PIC) of Kuwait for Ammonia and Urea Fertiliser and the Saudi Basic Industries Corporation (SABIC), for Methanol.

Cummulative Exports by Region 2019 16%

GPIC managed to successfully overcome all these challenges and achieved the goals set in the work plan during 2019, through the ongoing commitment and support of its employers. This was represented by fullfilling its obligations and achieving all goals set by the Board of Directors with all their wisdom and vision and for all variables in this industry regionally and globally.

GPIC’s sales of Ammonia, Urea, and Methanol totaled 1,231,170 metric tonnes, which represents an increase of 3.6 per cent against what was planned in 2019. A total of 43,599 metric tons of Ammonia and 459,165 metric tons of Methanol were sold, representing an increase of 4.5 per cent against what planned in 2019.

3% 6%

75%

Asia

30

Africa

Australia

North America

GPIC Annual Report 2019

HUMAN RESOURCES DEVELOPMENT

Training and Development: The training and development of Bahraini employees is a major priority for GPIC management and 2019 marks 40 years of this commitment as the Academy of Leadership and Learning, previously the Training Centre, celebrated its 35th anniversary.

To keep pace with the development of its strategies and the future trends of training and development in the Company, on 8th November 2010, HE Dr. Abdul Husain bin Ali Mirza, Minister of Oil and Gas Affairs and President of the National Oil and Gas Authority, inaugurated the GPIC Academy of Leadership and Learning.

The Company’s training policy has its ultimate objective as the full development of Bahraini employees, both new and existing. 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 strategy, 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 received in the previous years, the Company was awarded for being an Outstanding Institution in Training and Human Resource Development from the Ministry of Labour. This achievement comes in recognition of the Company’s role in the development of Bahraini human capital, through the provision of prolific opportunities for employees to participate in specialised courses both 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.

The Academy of Leadership and Learning utilises CompetencyBased 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 GPIC employees in addition to the annual training plan and leads to the development of every person in the company.

The Academy of Leadership and Learning is also currently overseeing the development of 50 employees to qualify them for taking senior supervisory positions in the future.

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 organisation of 177 training courses held in the Academy and GPIC Club, attended by a total of 1,139 employees. This is in addition to 88 training courses and conferences held in Bahrain with 415 employees in attendance and a total of 106 training courses outside Bahrain attended by 286 employees. These courses represented a total of 371 courses attended by 1,840 employees and trainees.

31

GPIC Annual Report 2019

HUMAN RESOURCES DEVELOPMENT (continued)

the Company for all new employees in the areas of health, safety, environment and quality.

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 38 employees benefitted from this guidance and counseling process. This is in addition to the development and awareness programmes held by

GPIC has a separate scholarship scheme that strives to encourage employees to complete their academic studies. As well as this, scholarships are offered to employees’ children.

Total Training Events 400 371

300

338

335

308

296

288

320 288

251

200

210 177

172

100

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

00

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 obligation 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.

In 2019, GPIC trained 216 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 commitment to play its role towards the community and provide training opportunities for

Annual Number of Trainees 100 88

80

74

71

60 49

54

47

48

43

65

63

49 40

39 33 16

17

2018

32

20

2017

40

64

32

2019

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

00

GPIC Annual Report 2019

GPIC’s electronic library is available through the Company’s intranet. The new library has numerous magazines, journals, periodicals and valuable publications. The Academy of Leadership and Learning 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 GPI,C as it offers 55 training programmes in a wide range of topics such as; communication skills, selfdevelopment 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 within the Company. In addition, the Centre has 113 comprehensive training courses in the areas of safety, health and the environment.

Number of e-Learning Users 500

398

300

284

299

323

217

200 150

100

97

173

81

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

34

2008

00

444

441

400

33

GPIC Annual Report 2019

‫المسؤولية المجتمعية‬

CORPORATE SOCIAL RESPONSIBILITY

34

GPIC Annual Report 2019

‫المسؤولية المجتمعية‬

CORPORATE SOCIAL RESPONSIBILITY

35

GPIC Annual Report 2019

‫المسؤولية المجتمعية‬

CORPORATE SOCIAL RESPONSIBILITY

36

GPIC Annual Report 2019

‫المسؤولية المجتمعية‬

CORPORATE SOCIAL RESPONSIBILITY

37

GPIC Annual Report 2019

‫المسؤولية المجتمعية‬

CORPORATE SOCIAL RESPONSIBILITY

38

GPIC Annual Report 2019

‫الزيارات التعليمية والمجتمع‬

EDUCATIONAL & COMMUNITY VISITS

39

GPIC Annual Report 2019

‫المؤتمرات والمعارض‬

CONFERENCES & EXHIBITIONS

40

GPIC Annual Report 2019

‫المؤتمرات والمعارض‬

CONFERENCES & EXHIBITIONS

41

GPIC Annual Report 2019

‫الزيارات الرسمية‬

OFFICIAL VISITS TO GPIC COMPLEX

42

GPIC Annual Report 2019

‫الزيارات الرسمية‬

OFFICIAL VISITS TO GPIC COMPLEX

43