The petrochemical sector in the GCC saw a compound annual growth rate (CAGR) of about 11 per cent over the past 10 years, driven by enhanced capacities across all major sub-sectors, experts said.

The figures were highlighted at a press conference held in Grand Hyatt, Dubai, UAE today (January 7) by the organisers of ArabPlast 2015, the region’s leading trade show for the plastics industry. The event will kick off on January 10 and continue for four days until January 13 at the Dubai International Convention and Exhibition Centre, Dubai, UAE.

They added that the evolving petrochemical industry in the GCC has become a leading manufacturer of commodity polymers, such as polyethylene and polypropylene, due to availability of cost-effective feedstock. While there was low demand for finished polymers within the region, strong demand from China and other Asian countries continues to present huge opportunities, according to speakers at the press conference.

This edition of the show is sponsored by Borouge (Principal Sponsor), Tasnee (Diamond Sponsor), Natpet (Gold Sponsor), and Frost Sullivan (Knowledge Partner) and Emirates (Official Airline).

During the press conference, the first industry white paper was unveiled by Frost Sullivan exclusively for ArabPlast 2015 under the title “The GCC Petrochemicals Industry, History, Current Trends, and Future Opportunities.”

The show is being organised by Al Fajer Information and Services along with Germany’s Messe Dusseldorf.

The press conference was addressed by Satish Khanna, general manager and Jeen Joshua, project manager, Al Fajer Information and Services, Co-organiser of the show, along with Germany’s Messe Dusseldorf;  Gabriele Schreiber, Director, Messe Dusseldorf, Germany;  Aparajit Balan,  Frost & Sullivan; Hazeem Al Suwaidi, Vice President,  Borouge and  Yaser Abdulfattah, Director Special Projects, NATPET

According to the white paper, a decade ago the GCC accounted for about 11 per cent of the total petrochemicals capacity in the world. Today, the capacity has doubled, making the GCC a major supplier through the presence of several major global chemical companies.

Presenting a research-based white paper on “Future of petrochemicals in GCC”, Aparajit Balan of Frost & Sullivan, US, said: “With urbanisation and lifestyle changes in the developing economies, the demand for plastics has witnessed an aggressive growth. Since Asia was not able to scale up capacities to meet the surging demand, the availability of cheaper primary petrochemicals and proximity presented the perfect opportunity for rapid expansion in the plastics and polymers space in the GCC.”

“Towards the end of the previous decade, large capacities were added across the petrochemicals value chain in the GCC. The base petrochemicals capacity saw an increase of 11 per cent between 2003 and 2013. GCC countries continue to hold a significant position in the manufacture of basic petrochemicals such as ethylene, propylene and methanol. Over the years, the contribution of refining to the overall manufacturing GDP has been declining, accompanied by an increasing contribution from petrochemicals and chemicals manufacturing. This clearly indicates a shift from the export of base chemicals to the export of higher value derivatives. With increasing pressure on employment, diversification into downstream sectors will offer more jobs with less capital investment, in comparison to setting up more refineries. Some of the key petrochemicals in the countries in the GCC are the basic C1-C4 derivatives," Balan said.

Satish Khanna, general manager, Al Fajer Information & Services, said: “The previous edition of the bi-annual event was spread over nine halls of DICEC and attracted 1,110 exhibitors from 45 counties.  The show is now ranked as the first in the region for plastics, petrochemicals and rubber industry.  The show usually draws huge influx of trade visitors from various countries from around the globe like Saudi Arabia, Oman, Qatar, Bahrain, Kuwait, Iran, Pakistan, Egypt, African countries, India, China, Germany, Jordan, Syria, and Lebanon.”

ArabPlast is among the top rated specialised shows of machinery worldwide and No 1 trade show in the Middle East in the volume of machinery on display at the venue, according to the organisers,

The show features 18 national pavilions, including that of Saudi Arabia by Saudi Export and Development Authority (Seda), a subsidiary of the Saudi Ministry of Commerce and Industry, which has booked a full hall at Arabplast 2015.

Jeen Joshua, project manager of Arabplast, said:  “Saudi Arabia represents 59 per cent of total GCC petrochemical exports, making it the largest chemical exporter in the GCC and the 14th largest exporter worldwide, followed by Qatar, Oman, Kuwait, UAE and Bahrain.”
 
According to Emirates NBD Research & Treasury report, Saudi Arabia leads the region’s plastics industry, producing an estimated 18.4 million tons per annum (tpa) in 2013, about 74.5 per cent of the region’s plastics production capacity.

An emerging trend for the GCC’s plastic industry will be the diversification of its products portfolio, for wide ranging applications in the aviation, transport and food packaging sectors. By 2017, the region is expected to produce 23 plastic products - more than double the current amount.

Gabriele Schreiber, director, Messe Dusseldorf, Germany, said: “The GCC petrochemicals industry achieved a production capacity of 142.7 million tpa in 2013, up by 10.5 per cent y/y, according to the Gulf Petrochemicals and Chemicals Association (GPCA), which estimates that GCC petrochemical producers will increase their capacity by 40 per cent over the next three years, reaching 199.5 million tpa by 2018. The UAE petrochemical production almost doubled in 2013 reaching 10 million tpa, valued at Dh18 billion, accounting roughly for 7 per cent of the total GCC production capacity.”

ArabPlast 2015 is concurrently held with four other important international trade shows -- Metal Middle East, Arabia Essen Welding & Cutting, Tube Arabia and Wire & Cable Arabia at the Dubai World Trade Centre. – TradeArabia News Service