SAFCO ANNOUNCES THAT IT HAS DECIDED NOT TO PROCEED WITH THE EXECUTION OF THE AGREEMENT WITH HADEED. SAFCO STUDIES CONSTRUCTION OF A NEW UREA PLANT

Further to the companys announcement on Tadawul, on July 13, 2008, which stated that a 50:50 percent agreement had been concluded with SABICs affiliate, HADEED, for the construction of a flat steel plant in Jubail Industrial City. SAFCO announces that it has been decided not to proceed with the implementation of this agreement since the results of the final studies were not encouraging. Alternatively, SAFCO will carry out feasibility studies for the construction of a new plant (SAFCO 5), in its complex in Jubail, for the production of urea with annual capacity of one million tons and is expected to start production in the second half of 2013. The company has reached an agreement with the Ministry of Petroleum and Mineral Resources on the required gas feedstock. This will support the companys strategy for expansion and growth while preserving its worlds leading position