Home / NEWS / GCC chemical industry grows at 3.7 percent in 2016


GCC chemical industry grows at 3.7 percent in 2016

by Martin Menachery on Mar 20, 2017


Dr Abdulwahab Al-Sadoun, secretary general, GPCA.
Dr Abdulwahab Al-Sadoun, secretary general, GPCA.

The petrochemical industry in the Arabian Gulf region grew at 3.7 percent in 2016 reaching 150 million tons of capacity, according to an annual study by the Gulf Petrochemicals and Chemicals Association (GPCA), outpacing the global average growth of 2.2 percent.

The figures emerged from ‘Arabian Gulf Industry Year in Review’ part of GPCA’s annual report. Released today by GPCA, the resource for industry data in the region, the study highlights that the industry’s growth is largely due to new capacity added in Saudi Arabia, the region’s largest petrochemical producer with 99.1 million tons of capacity, representing a 66 percent share of the regional capacity.

While the report highlights a fall from the Gulf chemical industry’s growth rate of five percent in 2015, due in part to feedstock supply constraint and global economic uncertainty, ‘transformational’ new, highly complex projects in the region, such as the US$20 billion Sadara Chemical joint venture between Saudi Aramco and Dow, and Kemya elastomer plant, an affiliate of SABIC and ExxonMobil Chemicals, point to a positive medium-term outlook for growth. The drop from 2015 figures can also be attributed to new capacity additions coming from specialty chemicals, which tend to be lower in volume but higher in value compared to commodity petrochemicals.

In addition, the report notes that the GCC chemical capacity utilisation is more than 90 percent over the past five years, twelve percentage points above the 78 percent global industry’s utilisation average in 2016.

“The regional industry continues to grow healthily by integrating new technologies, building better strategic partnerships and navigating smartly around global economic uncertainties,” said Dr Abdulwahab Al-Sadoun, secretary general, GPCA.

“The region continues to make significant investments in greenfield plant operations as well as brownfield efficiency gains as the GCC producers explore new and often unconventional sources of feedstock to drive chemical output. Apart from advancing investment and innovation in the industry, the multibillion dollar project announcements, new technologies and capacity addition have contributed to a surge in job opportunities,” continued Dr Al-Sadoun. “The results of the 2016 report are a testament to the agility and resilience of this region’s industry,” added Al-Sadoun.

The performance of the industry continues to depend on factors linked to feedstock and energy prices, along with labour productivity, capital intensity, links with the customers, knowledge of markets and uncertainty around the world.

In 2016, projects worth US$13 billion were announced in the region, coming online between 2020 and 2024 and adding eight million tons production capacity. The projects contribute to as many as 4,000 new jobs. Beyond the GCC, chemical production in North America expanded by 1.1 percent in 2016, lower than in 2015. In addition, chemical production in Western Europe demonstrated a modest growth in 2016 of one percent, much lower than in the previous period. Growth decline in Europe was the highest among other parts of the world despite the fact that the European chemical sites, as in the previous year, benefited from low oil prices compared with the US competitors whose production is based on gas.


FEATURED COMMENT

Please click here to comment on this article

COMMENTS

Name *
Email *
City
Country
Subject: *
Comments: *
Math Question: *
Solve this simple math problem
and enter the result. E.g. for 1+3, enter 4.
Refresh the image if not clear
Remember me on this computer


  • LATEST / / / / / / / / / DOWNSTREAM / NEWS / /

NEWSLETTER SUBSCRIPTION
Email:
ArabianOilandGas Awards
LinkedIn
Utilities middle east
Construction Week Online Middle East
Hotelier Middle East
Arabian Supply Chain Middle East

RELATED ARTICLES


NEWSLETTER SUBSCRIPTION
Email:
Articles
Companies