Sahara Petrochemical Company (Sahara) [2260.SE] and National Industrialization Company (Tasnee) [2060.SE] have announced that the butanol project started commercial operations as of 1 March 2016 and that they expect the project would reduce costs for the Saudi Acrylic Acid Company (SAAC) by around SAR40 million in 2016. Note that the project is 33%-owned by each of SAAC, Saudi Kayan Petrochemical Company (Kayan) [2350.SE] and Sadara Chemical Company (Sadara). SAAC’s share of butanol production will be used to feed the butyl acrylates plant, which had been importing butanol previously. While we are positive on the commercial start of the project, at the current prevailing price levels, the additional costs savings to Sahara and Tasnee are minimal; thus, the project does not appear to be a game changer today. We believe for the project to make a significant difference, prices would have to rebound substantially from current levels. Based on Sahara and Tasnee’s ownership in SAAC, the implied savings would be cSAR17 million for Sahara and cSAR21 million for Tasnee in 2016. (Tadawul, Yousef Husseini)   Sahara Petrochemicals: SAR8.62 as of 28 March 2016, Rating: Neutral, FV: SAR8.50 per share, MCap: USD1,009 million, SPC AB / 2260.SE