Changing Landscape in Petchem Industry
The GCC petrochemicals industry envisages huge development and significant investment to satisfy the growing demand. This is essential and urgent as well for the economic diversification programmes of the region.
The chemical producers of the gulf is set to have a 17% increase in global market share over the next five years driven by the demand for new products. According to GPCA, the GCC petrochemicals capacity expanded by 3.7% in 2016 compared with a global average growth of 2.2%, and the capacity utilization in the region stood at more than 90% over the last five years compared with a global average of 78% in that period.
As the GCC is targeting industrial revolution, planned levels of spending in the petrochemicals sector will remain relatively high in the coming years. Some of the Gulf’s biggest players like Aramco and Adnoc plan to almost triple their petrochemical production capacity to 11.4 million tpy by 2025 and 34 million tpy by 2030 respectively.
Though the region makes significant strides to drive chemical output, much needs to be achieved to remain competitive in today’s fast-changing global petrochemicals market landscape.
By enhancing the operational efficiency and innovation excellence, the GCC producers can achieve a good market share. The production of more differentiated higher value commodity petrochemicals, along with their derivatives, has been on the agenda. Speciality chemicals could generate twice the value of commodity-based chemicals.
Greater energy efficiency, effective raw materials usage, asset utilization and costs optimization, all together could improve bottom line of production by more than 10%.
In addition, seamless integration of petrochemicals and refining businesses will create operational synergies and maximize gains. It could be achieved through shared infrastructure, utilities and services, and stream transfers.
Producers must innovate in the area of technology to generate new products. Innovation in business processes and operating models has become even more important today and could add immense value to the chemical industry.
With demand for petrochemicals doubling, GCC petrochemical producers should explore building new partnerships globally to collectively capitalize on market access.
The region looks set to push forward with the development of the chemicals sector; however the right strategies in place would be vital for the industry to grow successfully in the global marketplace.