Saudi Basic Industries Corp (Sabic) still hopes to find investment opportunities in Algeria after failing to win a contract worth over $3 billion to build a chemical complex there, the company's chief executive said.

Algeria earlier gave its state energy firm Sonatrach and France's Total the contract to build and operate a steam cracking plant producing 1.4 million tonnes of ethane per year.

Sabic was one of the bidders, chief executive officer Mohamed Al Mady said.

"But we still hope to invest in Algeria. Companies can always make joint ventures and we look forward to a new opportunity in Algeria," he said.   

Sabic, which agreed in May to pay $11.6 billion for the plastics unit of General Electric, expects to include the US company's earnings in its fourth quarter financials, Al Mady said.

The GE plastics division made a net profit of $674 million in 2006, down 22 percent from 2005, on slightly higher revenues of $6.65 billion.

Sabic made a record net profit of 6.5 billion riyals ($1.73 billion) in the second quarter, beating forecasts.

The company expects higher sales and prices to compensate for the rising costs of raw material and feedstock in 2007.

The cost of naphtha feedstock, which is linked to the price of crude oil, rose in the quarter as did iron ore prices which Sabic uses for its steel plants, chief financial officer Mutlaq Al Morished said.

The company managed costs by increasing output, he said, adding that sales volume rose 12 per cent in the second quarter.

Al Mady said rising prices for Sabic's steel and chemicals would help the company cope with higher raw material costs this year.

"We have managed to overcome this rise so far... We expect to continue coping well with it in 2007 by boosting turnover," he said. Reuters