Home / NEWS / Gulf downstream industry needs to transform itself, SABIC's CEO tells GPCA Forum


Gulf downstream industry needs to transform itself, SABIC's CEO tells GPCA Forum

by Martin Menachery on Nov 29, 2017


Yousef Al-Benyan, vice chairman and CEO, SABIC, and chairman of the GPCA, delivers the welcome address at the 12th Annual GPCA Forum.
Yousef Al-Benyan, vice chairman and CEO, SABIC, and chairman of the GPCA, delivers the welcome address at the 12th Annual GPCA Forum.

The outlook for the Gulf petrochemical and chemical industry is strong, but the good times would not last forever and the region's industry sector needs to 'get fit' and transform itself for the challenges to come.

This was the message to the 12th Annual Forum of the Gulf Petrochemicals and Chemicals Association (GPCA) from Yousef Al-Benyan, vice chairman and CEO, SABIC, and chairman of the GPCA in his welcome address. In his remarks, Al-Benyan embraced the theme of this year’s conference, ‘The Chemical Industry in Transformation: The Journey Begins’.

“Our industry has experienced rapid structural shifts in its business environment,” Al-Benyan told the assembled industry leaders. “Just about three years ago, no one could predict the changes it is now undergoing.”

Al-Benyan added: “I believe there is tremendous potential for the industry, but to reap the benefits, we need to realise the rules of the game have changed. The players must transform themselves.”

“The GCC petrochemical industry needs to get fitter, more nimble and more agile. We need to invest in the right technology and innovation that delivers results. Consolidation needs to be looked at very seriously,” noted Al-Benyan.

The industry is facing fast-paced disruptions caused by technology and recent economic developments in the US, Europe, China and elsewhere. “Times are changing very fast,” Al-Benyan commented. “And, we have to adapt even faster.”

GPCA members need to manage costs more effectively, institute world-class commercial manufacturing, supply chain and functional operations, and look seriously at the possibilities of both divestiture and consolidation.

“Transformation is the fundamental change that our industry needs to embrace if only we are to come out stronger in these challenging times,” Al-Benyan reminded. “Our strategic actions today will define our position in the industry tomorrow.”

The conference also heard from Mosaed Al-Ohali, executive vice president, corporate finance, SABIC, who appeared on a panel examining the importance of controlling risk.

“Catastrophic incidents have direct impact on the bottom line of the company and can have a long-lasting effect,” Al-Ohali said. “Risk impact can extend to brand damage, and difficulty in recruiting and retaining top talent. 'License to operate' can be severely compromised.”

According to Al-Ohali, to prevent such an outcome, it requires two main pillars – a leadership mind-set that counteracts complacency; and organisational capabilities that continuously discover and control risks.

To achieve this, leaders and organisations must cultivate a sense of vulnerability that brings focus to dynamic risk discovery tools, early signals detection and driving effective learning into the organisation. These, Al-Ohali said, are the tools that reveal risk ‘blind spots’. “You must be in control,” Al-Ohali remarked, “not think you are in control.”

The GPCA represents the downstream hydrocarbon industry in the Arabian Gulf. Established in 2006, the association voices the common interests of more than 250 member companies from the chemical and allied industries, accounting for over 95% of chemical output in the Gulf region. The industry makes up the second largest manufacturing sector in the region, producing over $108bn worth of products a year.


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