Plastics Industry in the Middle East - Increased Focus on Downstream Petrochemicals to Drive the Sector


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GlobalData, the industry analysis specialist, has released its latest research, Plastics Industry in the Middle East Increased Focus on Downstream Petrochemicals to Drive the Sector. The study, which is an offering from the companys Petrochemical Research Group, provides an in-depth analysis of the Middle East plastics industry. It explains the reasons which led to the economic diversification of the Middle East countries and explains the benefits to the plastics industry from diversification. It gives the share of oil sector in the respective GDPs and analyzes the strategies adopted by the Middle East petrochemicals industry to achieve growth in downstream plastic resins production. The study also discusses the trade pattern of the Middle East for the downstream petrochemicals. It also explains the reason of increased exports to the Asian countries especially China and provides exports data for major plastics (polyethylene, polypropylene, PET resins, polystyrene and polyvinyl chloride). The study provides the basic petrochemicals (ethylene, propylene, butadiene, benzene, toluene, xylenes and methanol) and major plastics capacity growth in the Middle East. The report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GlobalDatas research team of industry experts.

The Middle East is exposed to economic instability due to the increased dependence on the oil sector and it has been continuously trying to diversify its sources of income by developing downstream petrochemicals industry. The oil sector contributes to a large portion of the GDP in the Middle East and sudden price fluctuation affects the revenues generated from the sector. To reduce their dependence on the oil sector, countries in the Middle East embarked upon diversification of their economy which led to the foundation of a strong basic petrochemicals (upstream) industry in the start of last decade. Now the region is moving a step ahead and encouraging the downstream petrochemicals industry which will further enhance the plastic resins production. The Middle East already has a large downstream petrochemicals industry and this move will further boost the downstream petrochemical capacity in the region. Diversification drive will also encourage the plastic processing industry which is currently very small and scattered. Capacity for many of the high value plastics such as acrylonitrile butadiene styrene (ABS), ethyl vinyl acetate (EVA) and polycarbonate is also expected to increase in next five years. By 2016, ABS, polycarbonate and EVA capacity in the region will reach to 0.283 million metric tons per annum (MMtpa), 0.285 MMtpa and 0.345 MMtap respectively.

The downstream petrochemicals industry in the Middle East will rely on the Asian demand to absorb these petrochemical capacities. Asia and Europe are the two largest plastic resins importer from the Middle East. However, the Middle East producers will target Asian markets due to the higher demand growth in these markets. Asian countries especially China and India are supporting the downstream petrochemicals demand with their fast growing GDPs and large populations. China is already the largest importer of the downstream petrochemical from the Middle East and it is expected to import huge quantities of downstream petrochemicals in the future also. Other major importers of downstream petrochemicals from the Middle East are Singapore, Turkey, Belgium and India. Chinas share in downstream petrochemicals imports is much higher due to the indirect consumption which occurs via Singapore which has established itself as the transshipment hub in the Asian petrochemicals industry. Turkey also imports one third of its downstream petrochemicals from the Middle East.

Saudi Arabia and Iran are the two largest petrochemical exporters in the region. Saudi Arabian ethane has the lowest cost in the Middle East region. This feedstock subsidy makes Saudi companies the global low cost producers of downstream petrochemicals. Due to this production and exports of major plastics from Saudi Arabia has increased substantially. Iran has the second largest petrochemicals industry in the region and is growing at a fastest pace. It has the second largest natural gas reserve in the world which provides both energy and petrochemical feedstock to the producers. Both these countries are leading the Middle East downstream diversification drive and continuous government support will help them to enhance their competitiveness in the global downstream petrochemical industry. 

To take advantage of the downstream diversification drive many companies in the region have taken initiatives. Saudi Aramco and Dow Chemicals Company have entered into a joint venture to establish Sadara Chemical Company which will construct a mega petrochemical complex in Saudi Arabia with various plastics production units. Iran Petrochemical Commercial Company will also benefit from the diversification drive since polymers is the second largest revenue generating segment among all the petrochemicals exporting segments. The Qatar Petrochemical Company has already planned three downstream petrochemical complexes and is has just entered into a JV with Qatar Petroleum to construct polyethylene and polypropylene plants in Ras Laffan.

Scope

The report provides an in-depth analysis, market opportunities and challenges for the manufacturers of downstream petrochemicals worldwide. It contains detailed information about plastics production capacities in the major Middle East countries. Its scope includes 

  • Revenues earned by the major Middle East countries from the oil sector and the share of oil sector in the respective exports revenue and GDPs.
  • Historical and forecasted basic petrochemicals capacity in the Middle East
  • Basic petrochemicals capacity share of the Middle East
  • Major plastics capacity by product in the Middle East
  • Major plastics capacity split by region
  • Panned plastics capacity in the Middle East countries such as Iran, the UAE, Egypt, Saudi Arabia, and Qatar
  • Middle East major plastics exports trend and historic imports by major countries such as China, Singapore and Turkey
  • Middle East share in the major plastic imports of China, Singapore and Turkey
  • Historic demand and production of the major plastics in Saudi Arabia and Iran
Reasons to buy

The report will enhance your decision-making capability in a more rapid and time sensitive manner. It will allow you to 

  • Understand the impact of downstream diversification drive in the Middle East plastics industry
  • Develop business strategies with the help of specific insights on downstream petrochemicals supply scenario in the Middle East
  • Identify opportunities in the major Middle East petrochemical industries such as Saudi Arabia, Iran and Qatar
  • Identify prospective investment targets through updates on active and planned petrochemicals complex in the Middle East
  • Increase future revenue and profitability with the help of insights on the future opportunities and critical success factors in the Middle East petrochemical industry
Table Of Content

1.1 List of Tables
1.2 List of Figures

2 Introduction
2.1 Overview
2.2 GlobalData Report Guidance

3 Oil-dependant Middle East Region became the Hub of the Upstream Petrochemical Industry Owing to Feedstock Advantage and Supporting Government Policies
3.1 Crude Oil has been the Source of Revenue in the Middle East for Several Decades
3.2 Higher Crude Oil Dependency Exposes the Region to Economic Instability
3.3 The Middle East Region Embarked Upon Economic Diversification to Reduce the Dependency on Crude Oil
3.4 Natural Gas Subsidies by the Governments Facilitated Growth of the Basic Petrochemical Industry and Strengthened Diversification Process
3.4.1 Natural Gas Subsidies Encouraged the Middle East Producers to Establish Basic Petrochemical Plants
3.4.2 Diversification Process Accelerated with the Basic Petrochemicals Capacity Expansion on a Large Scale
3.5 Continuous Government Support has been Instrumental in Elevating the Middle East Petrochemical Industry

4 Downstream Plastics Industry is Aligning itself to Take Benefit from Already Established Basic Petrochemical Industry
4.1 Prosperous Upstream Industries Created Strong Foundation for the Downstream Petrochemical Industry
4.1.1 Huge Oil and Gas Reserves are the Backbone of a Strong Upstream Petrochemical Industry
4.1.2 Increased Oil and Gas Production Led to Enhanced Feedstock Availability
4.2 Downstream Plastics Industry to Strengthen from the Strong Basic Petrochemical Industry
4.2.1 The Middle East Plastics Capacity will Surpass North America Plastics Capacity by 2016
4.2.2 Emphasis on Downstream Petrochemicals will Avoid Overcapacity of Basic Petrochemicals
4.3 Existing Upstream Petrochemical Producers will Benefit the Most from Vertical Integration
4.4 Planned Projects in the Middle East will Further Promote the Plastics Production in the Region

5 The Plastics Processing Industry to Benefit Directly from the Diversification Drive
5.1 Polymer Parks will Encourage the Processing Industry by Providing Financial Benefits
5.1.1 Abu Dhabi Polymer Park is the First of Its Kind to Strengthen Plastics Processing Industry
5.1.2 Rabigh Conversion Industrial Park is a Saudi Initiative to Encourage Plastics and Packaging Cluster
5.1.3 Plaschem Parks are Being Planned in Yanbu and Jubail in Saudi Arabia
5.2 Investment in Value Added Plastic Resins is Expected to Increase in the Future
5.3 Downstream Plastics Conversion Units to Provide More Employment Opportunities in the Region

6 Downstream Diversification to Target the Major Asian and European Markets
6.1 China, Singapore and Turkey are the Largest Export Markets for the Middle East Countries
6.2 China’s Imports from the Middle East have Grown Substantially Due to Strong Demand from the Home Appliances, Packaging and Automotive Sectors
6.2.1 Chinese Imports from the Middle East have Grown Five Times in the Last 10 Years
6.2.2 Home Appliances Subsidy Scheme Stimulating the Plastics Demand in China
6.2.3 Packaging Sector Demand for Plastics is Set to Increase after Recession
6.2.4 Increase in Automotive Production will Ensure Higher Plastics Demand
6.3 Singapore Plastics Imports Surged in the Last Two Years as it Established Itself as Transshipment Hub in the Asia-Pacific Region
6.4 Turkey is Importing Major Plastics from the Middle East and Distributing in Europe

7 Limited Cheaper Feedstock Supply, Access to Technologies and Competitive Business Models are the Challenges to Establish a Strong Downstream Petrochemical Industry
7.1 Subsidized Ethane Supply has Restricted in the Recent Past Forcing Producers to Shift to Naphtha Feedstock
7.2 New Plants Require Modern Technologies to Compete with Downstream Producers in Europe and North America
7.3 The Region Needs to Create a Robust Business Model Supporting the Downstream Petrochemical Industry

8 Saudi Arabia and Iran are the Leading Countries Involved in Economic Diversification
8.1 Saudi Arabia is the Largest Manufacturer of Petrochemicals in the Middle East
8.1.1 Integration of Refineries and Petrochemical Plants Makes Saudi Petrochemical Industry More Efficient
8.1.2 Saudi Arabia Plastics Exports Relies on Asia-Pacific Demand
8.2 Iran is the Fastest Growing Petrochemical Industry in the Middle East
8.2.1 The US and European Sanctions Slowing the Iranian Petrochemical Industry Growth Rate
8.2.2 Iran Plans to Expand its Petrochemical Industry and Increase Polymer Exports

9 Major Companies at the Helm of Diversification Drive in the Middle East
9.1 Sadara Chemical Company – A Joint Venture between Saudi Aramco and Dow Chemical Company
9.1.1 State of the Art Complex will Use Feedstock Supplied by Saudi Aramco
9.1.2 The JV will Benefit from Dow’s Technological Know-how and Marketing Network Outside the Middle East Region
9.1.3 Adjoining Plastics Conversion Park will Promote Plastics Processing Industry
9.2 Iran Petrochemical Commercial Company – Partially Owned by National Petroleum Company
9.2.1 PCC Exports Petrochemicals from Eight Petrochemical Producing Regions in Iran
9.2.2 Polymer Export is Encouraged by the Government Due to Higher Revenue Generation
9.3 The Qatar Petrochemical Company – Partially Owned by Qatar Petroleum
9.3.1 QP also Hold All the Major Planned Plastics Plants are Partially Owned by Sate Owned QP
9.3.2 Joint Venture between QAPCO and DOW will Start Polyolefin Production by 2018

10 Appendix
10.1 Abbreviations
10.2 Definitions
10.2.1 Installed Plant Capacity
10.2.2 Key Feedstock
10.2.3 Process
10.2.4 Technology
10.3 GlobalData’s Research Methodology
10.3.1 Coverage
10.3.2 Secondary Research
10.3.3 Primary Research
10.3.4 Expert Panel Validation
10.4 Bibliography
10.5 Contact Us
10.6 Disclaimer


Table 1: The Middle East Petroleum Industry, Share of the Oil Sector in Exports Revenue and GDP, %, 2010 10
Table 2: The Middle East Petroleum Industry, Exports Revenue from Oil Sector, $bn, 1990-2010 12
Table 3: Global Petrochemical Industry, the Middle East Basic Petrochemicals Capacity Share, %, 20002011 14
Table 4: The Middle East Petrochemical Industry, Basic Petrochemicals Capacity, MMtpa, 2000-2016 16
Table 5: The Middle East Petrochemical Industry, Basic Petrochemicals Complex Details, 2011 17
Table 6: The Middle East Petrochemical Industry, Basic Petrochemicals Complex Details, 2011 (Contd.) 18
Table 7: Global Oil and Gas Industry, the Middle East Share in Proved Reserve, %, 2010 20
Table 8: The Middle East Oil and Gas Industry, Crude Oil Production (MMbbl) and Natural Gas Production (bcf), 2010 21
Table 9: The Middle East Petrochemical Industry, Major Plastics Capacity by Product, MMtpa, 2000-2016 23
Table 10: The Global Petrochemical Industry, Major Plastics Capacity Split by Region, %, 2011-2016 24
Table 11: China Petrochemical Industry, Basic Petrochemical Capacity, MMtpa, 2000-2015 26
Table 12: Middle East Plastics Industry, Planned Capacity by Country, %, 2012-2016 27
Table 13: Middle East Plastics Industry, Planned Projects Details, 2012-2016 28
Table 14: Middle East Plastics Industry, Planned Projects Details, 2012-2016 (Contd.) 29
Table 15: The Middle East ABS, Polycarbonate and EVA Industries, Active and Planned Plants Details 32
Table 16: Unemployment Rate, the Middle East and the World, %, 2005-2011 34
Table 17: The Middle East Plastics Industry, Top Five Export Markets, MMtpa, 2010 35
Table 18: China Plastics Industry, Imports from the Middle East, MMtpa, 2000-2010 37
Table 19: China Plastics Industry, the Middle East Share in Major Plastics Imports, %, 2010 37
Table 20: China Packaging Industry, Output Value, 2003-2010 39
Table 21: China Automotive Industry, Production, Million Units, 2000-2011 41
Table 22: Singapore Plastics Industry, Imports from the Middle East, MMtpa 2000-2010 43
Table 23: Singapore Plastics Industry, Middle East Share in Major Plastics Import, %, 2010 44
Table 24: Turkey Plastics Industry, Imports from the Middle East, MMtpa 2000-2010 45
Table 25: Turkey Plastics Industry, Middle East Share in Major Plastics Imports, %, 2010 45
Table 26: The Middle East Petrochemical Industry, Planned Projects Based on Naphtha, 2012-2016 47
Table 27: Saudi Arabia Plastics Industry, Demand and Production, MMtpa, 2000-2016 50
Table 28: Saudi Arabia Petrochemical Industry, Major Plastics Exports by Region, %, 2010 52
Table 29: Iran Plastics Industry, Demand and Production, MMtpa, 2000-2016 53
Table 30: Iran Petrochemical Industry, Major Plastics Exports by Region, %, 2010 54
Table 31: Iran Petrochemicals Industry, Plastic Exports by Region, %, 2010 55
Table 32: Sadara Chemical Company, Al- Jubail Complex Details, 2012-2016 57
Table 33: Iran Plastics Industry, Planned Plant Details, 2012-2016 59
Table 34: Iran Petrochemical Commercial Co., Exports share of Major Segments by Value and Quantity, %, 2010 60
Table 35: Qatar Petroleum, Planned Plants Details, 2012-2016 61
Table 36: Qatar Petroleum-QAPCO JV, Planned Project Details 62
Figure 1: The Middle East Petroleum Industry, Share of the Oil Sector in Exports Revenue and GDP, %, 2010 10
Figure 2: The Middle East Petroleum Industry, Exports Revenue from Oil Sector, $bn, 1990-2010 11
Figure 3: Global Petrochemical Industry, the Middle East Basic Petrochemicals Capacity Share, %, 20002011 14
Figure 4: The Middle East Petrochemical Industry, Basic Petrochemicals Capacity, MMtpa, 2000-2016 15
Figure 5: Global Oil and Gas Industry, the Middle East Share in Proved Reserve, %, 2010 20
Figure 6: The Middle East Oil and Gas Industry, Crude Oil Production (MMbbl) and Natural Gas Production (bcf), 2010 21
Figure 7: The Middle East Petrochemical Industry, Major Plastics Capacity by Product, MMtpa, 2000-2016 22
Figure 8: The Global Petrochemical Industry, Major Plastics Capacity Split by Region, %, 2011-2016 24
Figure 9: China Petrochemical Industry, Basic Petrochemicals Capacity, MMtpa, 2000-2015 25
Figure 10: Middle East Plastics Industry, Planned Capacity by Country, %, 2012-2016 27
Figure 11: Unemployment Rate, the Middle East and the World, %, 2005-2011 33
Figure 12: The Middle East Plastics Industry, Top Five Export Markets, MMtpa, 2010 35
Figure 13: China Plastics Industry, Imports from the Middle East, MMtpa, 2000-2010 36
Figure 14: China Plastics Industry, the Middle East Share in Major Plastics Imports, %, 2010 37
Figure 15: China Packaging Industry, Output Value, 2003-2010 38
Figure 16: China Automotive Industry, Production, Million Units, 2000-2011 40
Figure 17: Singapore Plastics Industry, Imports from the Middle East, MMtpa 2000-2010 42
Figure 18: Singapore Plastics Industry, the Middle East Share in Major Plastics Import, %, 2010 43
Figure 19: Turkey Plastics Industry, Imports from the Middle East, MMtpa 2000-2010 44
Figure 20: Turkey Plastics Industry, Middle East Share in Major Plastics Imports, %, 2010 45
Figure 21: Saudi Arabia Plastics Industry, Demand and Production, MMtpa, 2000-2016 50
Figure 22: Saudi Arabia Petrochemical Industry, Major Plastics Exports by Region, %, 2010 51
Figure 23: Iran Plastics Industry, Demand and Production, MMtpa, 2000-2016 52
Figure 24: Iran Petrochemical Industry, Major Plastics Exports by Region, %, 2010 54
Figure 25: Iran Petrochemicals Industry, Plastic Exports by Region, %, 2010 55
Figure 26: Iran Petrochemical Commercial Co., Exports Share of Major Segments by Value and Quantity, %, 2010 60