Saudi Basic Industries Corp (Sabic) said on Wednesday it expects higher sales and profitability in 2011 and 2012 as production increases and petrochemical prices rise to pre-crisis levels.

The world's largest chemical firm by market value said a new steel plant will begin operations by the end of the year and that its affiliate Saudi Kayan Petrochemicals  will start commercial production in the second half of the year.

'Growth will continue in 2011 and 2012,' Sabic's chief executive Mohamed Al-Mady said in a press conference on Wednesday.   

Sabic announced its fourth-quarter results on Tuesday, saying it made a 27 percent rise in net profits to 5.81 billion riyals ($1.55 billion). The chemical maker said its sales for the fourth-quarter reached 41 billion riyals and that its biggest growth market is in China.   

High oil prices are positive for petrochemical firms because they increase petrochemical product prices, and Sabic usually does better in terms of profitability than rivals because it purchases feedstock at lower prices.

Sabic benefited last year from higher production after the addition of new capacity under its Saudi-based affiliates Yansab and Sharq and under its Tianjin joint-venture with Sinopec. - Reuters