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GPCA 11: Access to technology is key in Middle East KPMG chief

December 13/2011

(ICIS) -- Access to technology will be the main issue for Middle East petrochemical producers as they shift strategy to push downstream into value-added chemicals, Paul Harnick, chief operating officer of KPMGs chemicals and performance technologies practice, said on Tuesday.
The Arabian Gulf region "can sort out most things", he said, "such as infrastructure, logistics and raw materials, but it needs to acquire the technology".


KPMG, a global management consultancy, is launching a special report at this years Annual GPCA Forum, entitled "The GCC in 2020: Downstream expansion of the Middle East chemical industry". The report, which forms the latest issue of KPMGs Reaction chemical magazine, has been developed with the Gulf Petrochemicals & Chemical Association (GPCA) and is co-branded as a KPMG/GPCA publication.

Said Harnick: "The report is very timely as the move downstream is getting much more important for Gulf producers. This is being driven by two things: regional demographics that are seeing growing populations and an increasing need to create jobs, and the desire to add yet more value to the regions oil and gas production."

Looking at the four main petrochemical producing regions, Harnick said that the Middle East continues to have an advantage with feedstock provision, while Asia has rapidly growing markets, and Europe and North America have an advantage in technology. This presents a win-win situation for Western technology holders willing and able to create joint ventures with Middle East partners.



Harnick pointed to the Saudi Aramco/Dow Chemical mega-complex being planned for Al-Jubail in Saudi Arabia as a case in point. "They have agreed things so both partners are going to win, with a trade off between technology advantage and feedstock access."

But equally, added Harnick, Middle East players have a cash advantage that will allow them simply to buy-in technology in some cases, under licence or through acquisition. However, there is a risk here that political issues may prevent transactions if governments decide technology ownership is sensitive.

 

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