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Chemical industry drives GDP growth

by Christopher Kelly on Dec 24, 2014


Dr. Abdulwahab Al-Sadoun
Dr. Abdulwahab Al-Sadoun

The GCC’s chemicals industry is one of the region’s fastest growing industries. It is also one of the oldest domestic industries, starting its operations almost half a century ago. From those early years, the chemical industry in the GCC has continued to contribute to the economic growth of the regional economy.

At present, the industry accounts for 3.3% of GCC GDP. Comparison with the top 15 nations in the world shows that the GCC is ranked between Indonesia where chemicals contributed nearly 4% and Canada where the contribution was 0.8%.

In the world’s largest chemical producers China and USA, chemical production accounted for 2.7% and 1.7% of GDP respectively. The average contribution of the respective chemicals industry to the GDP for the largest 15 nations is estimated at 2.3%. The GCC chemical contribution to GDP is far above the average level of the top 15 nations (3.3% compared to 2.3%).

The GCC chemical industry is the largest manufacturing industry if measured by value added, followed by the refining sector.

The GCC is one of the largest producers of basic chemicals in the world: in 2013 the GCC accounted for 14.2% share of global ethylene output, 6.7% of global propylene output and 9.4% of global methanol output. Over the past decade, the regional industry experienced double-digit growth up to 140.5 million tons per annum in total production capacity in 2013. This trend is forecasted to continue in the years to come.

The chemical industry in the GCC region employed 148,900 people in 2013. Direct employment, along with services that support the petrochemicals industry, led to the creation of an additional 446,800 jobs, bringing the total number of jobs that rely on the downstream hydrocarbon industry in the GCC to 595,700 in 2013.

Employment statistics in the region show that for the GCC petrochemical industry, the multiplier effect is estimated to be around 1:3, meaning that for every ten jobs directly created by the sector an additional 30 indirect employment opportunities in the chemical supply chain arise.

Among GPCA member companies, GCC nationals make up 56% of the industry’s workforce. Bahrain accounts for the highest number of nationals working in the industry, with 83% of the chemical workforce being Bahraini nationals, followed by Saudi Arabia, where 63% of the industry’s employees are Saudi nationals.

For those of us who have been part of this industry over the past decades, we have witnessed an outstanding degree of change within the region.

From a small number of large manufactures, the industry hosts larger number of niche players in different key areas like polymers and fertilizers production. As the organisation mandated to support the industry’s development, we look forward to achieving increased progress in this field in the future.


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