The GCC petrochemicals sector must invest in innovation to ensure competitiveness and enhance efficiency and also set up R&D labs and industrial parks in order to meet future challenges, said a senior Saudi government official

The GCC’s petrochemicals and chemicals industry is at a crucial juncture and must address four key areas in order to meet future challenges, stated Prince Abdulaziz bin Salman Bin Abdulaziz, Saudi Arabia’s Assistant Minister for Petroleum Affairs at the Ministry of Petroleum and Mineral Resources, while speaking at GPCA’s 8th annual forum held recently in Dubai.

"The industry must invest in innovation to ensure competitiveness and enhance efficiency; align itself to international rules and regulations; create local and regional demand for petrochemicals products to counteract the adverse effects of protectionism; and develop industrial parks and R&D laboratories and integrate refining and petrochemicals operations," Prince Abdulaziz said.

“In these dynamic, uncertain times, many opportunities emerge. This cannot be more true than for the petrochemicals and chemicals industry in the GCC,” he remarked.

Prince Abdulaziz said the GCC had achieved much over the last three decades, "but we are at a crucial juncture; we must collaborate to meet future challenges and play a bigger role in local economies."

"Technology will continue to be the main driver in shaping the energy sector. The increase of the middle class, urbanisation, industrialization and rapid development have lifted people from poverty in emerging markets," he added.

In the Middle East, the burgeoning middle class is contributing towards the parallel growth in consumption especially in resource-rich countries.

However, Prince Abdulaziz also noted that challenges were plenty including global competition; increased protectionism and trade barriers; small local market for petrochemical products; and a limited contribution of the industry to GDP.

In his address, Mohammed Al Mady, the chairman of GPCA and vice chairman and CEO of Sabic, said that 85 per cent of Middle East petrochemicals companies were planning to increase investment in innovation which requires collaboration from all stakeholders.

"Governments should not dictate the path of innovation and businesses cannot foster innovation in isolation, remarked Al Mady.

"There is a need to establish a broadly accessible education system and create an environment for people to live and companies to thrive," he added.

Dr Abdulwahab Sadoun, the secretary general of GPCA, said the Gulf petrochemical industry was currently 129.2 million tons compared to 121.8 million tons in 2011 and 62.4 million tons in 2005.

"The industry is expected to add a further 54 million tons of capacity by 2017, bringing total capacity to 183.6 million tons in the GCC, he stated, citing GPCA estimates.

According to him, the most notable growth would be fine chemicals and fertilizers.

"While the GCC petrochemicals industry is growing, it has become evident over the last two days that the region’s producers will need to innovate in order to realize their full potential. Collaboration is one key aspect of this journey towards future growth," remarked Dr Sadoun.

“This year’s annual forum has sparked crucial discussions within the region that will allow companies to better compete in an ever changing industry,” he added.

Over 1,870 delegates attended the Annual Forum this year, to hear insights from 16 speakers. The event was held under the theme “Innovation: the foundation for chemical value chain leadership”.-TradeArabia News Service