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Petrochemicals producers in GCC region see the need to expand further downstream

December 12/2011

(ICIS) -- Petrochemicals producers in the Gulf Cooperation Council (GCC) region see the need to expand further downstream to manufacture more value-added products and ensure sustainable growth for the business, a high-ranking industry official said on Monday. Expansion is focused on the engineering plastics and performance chemicals, said Abdulwahab Al-Sadoun, secretary general of the Gulf Petrochemicals & Chemicals Association (GPCA), in an interview with ICIS.

"The main drivers behind the need to move downstream are to add value to the producer, to address the potential growth and to create job opportunities regionally, to take advantage of the working age demographics," Al-Sadoun said.

With majority of GCCs production derived from feedstock gas - a natural resource with strong availability and is quite cheap in the Middle East - the most developed value chains in the region are ethylene and methanol.

But with the diversification into using other feedstocks, like naphtha, the GCC producers will be able to produce higher volumes of propylene that has not been possible in gas-based production.

Using naphtha as feedstock also meant a move for GCC producers to integrate petrochemical operations with the refineries and will translate to increased output of aromatics products such as benzene, toluene and xylenes.

The GCCs demographics also indicate a strong availability of work force that can be tapped to realise the expansion and integration of the regions crude oil and petrochemical producers, he said.
GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE. In Qatar, about 28% of the countrys are about 25 years old, while in Saudi Arabia, the age group accounts for a bigger proportion of the total population at 48%, he cited. But this movement towards producing more value-added products is also going on in other regions, like Asia.

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