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Saudi poised to become global petrochem hub

Dubai, December 6, 2009

Saudi Arabia is set to become the global center of petrochemicals production with no less than 30 new plants scheduled for completion in 2010 - including mega-projects in Al Jubail and Yanbu - and another 40 in the planning phase.

The other large-scale units are on-stream or starting up in Qatar, Kuwait, Oman and Abu Dhabi, and an estimated investment of around $170 billion is envisaged by 2015, said Dr Abdulwahab Al-Sadoun, Gulf Petrochemicals and Chemicals Association (GPCA) secretary general.

The shift of petrochemical industry's centre of gravity to the feedstock-rich Middle East, Dr Al-Sadoun said, is occurring more swiftly than anticipated, as plant after plant comes on-stream in the region, and production falters elsewhere in the world under the recession.

By 2015, the region will supply one-third of the world's ethylene glycol, used in fibers and anti-freeze; 20 per cent  of global polyethylene and 13 per cent of higher-value polypropylene, according to Chemical Week, co-organiser of the Fourth Annual GPCA Forum.

The GPCA forum, to be held in Dubai from December 8 to10, will witness industry leaders assessing the post-recession scenario with a focus on how the regional players are integrating sustainability into their growth agenda.

Over the next five years, 19 million metric tons per year of ethylene, the key building block for petrochemicals, is scheduled to be added to the production capacity across the Middle East, nearly doubling current capacity and providing extensive raw materials for downstream industries, said Dr Al-Sadoun noted.

'Beyond these basic petrochemicals projects, a new wave of investments in the Gulf region will target specialty chemicals and high-value plastics production, which will add value and will service industrial clusters based on the building blocks provided by the chemical industry,' he added.

He said the governments in the region were taking new measures that would further support the product portfolio diversification in the region’s petrochemical industry.

Dr Al-Sadoun cited the Saudi Cluster Program, which is part of the National Industrial Strategy recently launched in Riyadh to nurture value-added industrial manufacturing and development in the Kingdom.

The program’s five initial clusters will include automotive, construction, plastic packaging and consumer appliances, all of which will benefit the regional petrochemical industry, he added.

Middle East’s leading petrochemical producers such as Saudi Arabia have emerged over the last two decades as bastions of exports to world markets while spawning a wave of industrialization in the region by supplying the raw material for chemicals and polymers.

With the continued expansion of the industry across the region, more regional surpluses will be destined for export markets in Asia, Europe and the Americas.

The past recession-hit year has seen an increase of trade issues, with some importing nations raising dumping allegations against the region, and GPCA questioning the anti-dumping moves against member companies and countries, Al-Sadoun explained.

Saudi Oil Minister Ali Al-Naimi will make the opening keynote presentation at the 2009 GPCA Forum. On the second day, Central Bank of Bahrain governor Rasheed M. Al-Maraj will discuss “Financing Opportunities and Risks for Mideast Petrochemical and energy Projects in a Global Crisis”.

Leaders of major regional and global chemical companies will debate and discuss the transformation of the chemical industry in the last year, and how each company has repositioned itself to capture the growth going forward.

The forum features two breakout sessions: one on Human Resources and the other on Sustainability.  In line with this year's theme of 'Breaking through the crisis to pursue sustainable growth', it is dedicating an entire afternoon session to discuss sustainability.

The four papers presented at the session will focus on three most important industry concerns today:  the Responsible Care initiative, the role of plastics in driving sustainability, and carbon footprint management.

On December 9, Dr. Vijay Govindarajan, an expert on strategy and innovation and author of international best seller Ten Rules for Strategic Innova-tors, will speak at the Human Resources Breakout Session on  “Leadership in an Era of Constant Change.”-TradeArabia News Service




Tags: Saudi | petrochemical hub | GPCA Forum |

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