The Gulf petrochemicals industry is poised for solid growth over the next five years with its global market share set to surge more than 17 per cent, according to an industry expert.
This is mainly due to the demand for new products, stated Satish Khanna, the general manager, Al Fajer Information and Services, co-organisers of ArabPlast expo, quoting a report by Petrochemical Update.
One of the world's biggest three global plastics and petrochemical shows held every two years, ArabPlast will run from January 8 to 10 at the Dubai World Trade Centre (DWTC).
The GCC plastics industry is becoming more vibrant as the demand for the new products is growing with rapid speed in the region, he said.
Investments in plastics and petrochemical sector are on the upswing defying the current global market conditions.
The Gulf petrochemicals industry continues to be the world’s largest producer and exporter, offloading the majority of its output to more than 150 countries worldwide, he added.
According to Khanna, last year became a bright spot in the books of many petrochemical companies as falling international crude oil prices have alleviated the pressure on their margins.
Although some upstream oil operators have posted results that have missed expectations, their derivative segments and other petrochemical businesses are seeing the upside of the oil price erosion, he added.
ArabPlast 2017 organisers said that the petrochemicals industry majorly affect the stock index across the world, including the GCC.
“Stock markets with well-established petrochemical industries are better performers against crude oil plummet prices. This niche industry is helping lift major stock markets in the Middle East. The petrochemicals companies are lending strength in the corresponding stock markets they are listed in,” remarked Khanna.
According to Shell, the global demand for ethylene has grown by almost five per cent each year over the past 25 years, a level of growth which is over three times higher than the increase in demand for crude oil.
“As the global ethylene cost curve flattens, experts expect this to be a positive tailwind for naphtha-based producers, especially as they enjoy a broader production portfolio of co-products than their ethane-based peers,” said Khanna.
The forthcoming edition of ArabPlast is expected to record an expansion of 18 per cent compared to the 2015 edition.
Organisers are confident of a record turnout by petrochemical companies at the exhibition next year.
Khanna attributed that to their need of exploring all possible channels to open up new markets.
“ArabPlast is a global platform which helps participants interact not only with regional petrochemical players, but with trade buyers from across the globe. The exhibition now serves as one of the major events on the global petrochemicals agenda,” he added.
The expo will put on display new products and technologies in injection moulding, blow moulding, wrapping and packaging, pre and post plastic processing techniques as well as raw materials, such as additives and polymers.