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Comment: Maintaining competitive advantage

by Arabian Oil & Gas Staff on Mar 15, 2017


Dr Abdulwahab Al-Sadoun is the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA).
Dr Abdulwahab Al-Sadoun is the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA).

With the region's feedstock advantage waning in importance and global competition on the rise, Arabian Gulf petrochemical producers will need to innovate to stay competitive and maintain key market share. Innovation will also be needed to create region-wide economic growth and contribute to socio-economic benefits by creating more employment opportunities, stimulating higher living standards and offering products that meet key market needs. To achieve this last goal, regional producers will need to expand their product portfolio and move further downstream from commodity to specialty chemicals and plastics.

Compared to other parts of the world where the chemical industry is much more mature, the GCC has shown an exceptional drive to further develop its research and development (R&D) landscape. While global chemical R&D spending declined by 10%, in the region it jumped 37.8% year-on-year reaching US$729 million in 2015, up from US$529 million the year before. However, more needs to be done to capture future market opportunities as the need for sustainable solutions that meet real needs, not just ‘wants’ of these new markets, continues to increase. Investment in R&D alone will not necessarily produce new, innovative products and applications. What we really need is to nurture the spirit of innovation throughout the organisation in a way that we respond rather than react to certain changes in the market, and set rather than follow new industry trends.

At the heart of fostering innovation is mind-set and culture. This is first and foremost a management and organisational challenge, and as such it requires the right organisational structure and processes which support communication, collaboration and alignment of tasks on a day-to-day basis. Different staff functions (R&D, business development, market research etc.) and operational departments (marketing, sales, manufacturing, supply chain etc.) need to be aligned on an overarching business vision, while the individual strategies of these departments need to complement and not compete with each other.

It is also becoming extremely important to integrate the different aspects of technology management, innovation and R&D to improve overall performance and remain profitable. Adopting new equipment and processes is no longer enough to meet key targets and objectives. Companies will need to transform technologies into business solutions that enhance their performance, improve efficiency and streamline their operations, while fostering a culture of innovation, creativity and excellence. Corporate and technology venturing are two extremely promising avenues for long-term value creation as far as innovation is concerned, and hold enormous potential for the chemical and petrochemical industry in the region.

While corporate venturing involves the establishment of new ventures inside existing organisations (the idea of growing a business from ‘inside out’), technology venturing is the process of creating and capturing sustainable business opportunities based on a technological innovation. Technology venturing could act as an ideal platform to transfer knowledge and fuel innovation within an organisation. However, success will depend on understanding the many interrelated dynamics underlying such ventures. Therefore, business leaders will need to be equipped with the right knowledge, tools and techniques to drive technology ventures successfully.

More insight into these and other related topics will be provided during the upcoming GPCA Research and Innovation Summit taking place in Bahrain during 7-9 March. The summit has grown to become the region’s leading event for chemical research and innovation, and its growing number of visitors serve as a testimony that innovation will remain a priority for the industry and the region for many years to come.

Dr Abdulwahab Al-Sadoun is the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA). Set up in March 2006, the GPCA is a dedicated non-profit association serving its members with industry data and information sources. It is the first such association to represent the interests of the petrochemicals and chemicals industries in the Arabian Gulf.


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