Middle East Producers Emerge as Strong
Competitors in Downstream Polyester Markets

by Philippa Davies, Gillian Tweddle and Darrel Collier, Tecnon OrbiChem Limited

Over the past 25 years, the Middle East has become established as the preferred source of high volume, low-cost gas feedstock based, export orientated, olefin derivative products: polyethylene, polypropylene, MEG, PVC, polystyrene.

The most recent and ongoing phase of investments, however, has seen companies, old and new, diversify into products that take advantage of increased availability of liquid and aromatics feeds and also recognise growing domestic consumer demand within the region.

At the same time, there has also been a growing tendency amongst Middle East producers to invest in production outside the region, in acquisitions in Europe and North America and in joint venture projects in China, in order to access markets, gain expertise and diversify into highly specialised chemicals arenas.

Issues Confronting the Petrochemical Industry in the GCC

by Andrea Borruso and Syed Rashid Husain, SRI Consulting

The pillars of the petrochemical industrial “revolution” over the last 10 years, in the Middle East can be summarized in the following two key events:
• September 11, 2001 signaled the starting point of a large influx of native capital returning to the GCC.
• The combination of the tightening lighter feedstock availability situation in the Kingdom of Saudi Arabia and their Ministry guideline favoring feedstock allocation to projects with a diversified product slates.

The proven record of high profitability of the petrochemical industry in the region was a clear indication for investors that the sector was a safe destination for the large capitals that became available in the 2001 – 2002 period and the financial returns were sufficiently interesting: local investment, proven records and lucrative business: what else could the investors ask for?

The Petrochems Double Dip: How Big is the Threat? And Will the Industry Avoid It?

By Shahrin Ismaiyatim, Platts

For watchers of global economic developments, the second half of this year has been sending out mixed signals. Against widespread signs of improving growth – and especially, the continuing boom in Asian economies – are such indicators as the recent dismal housing figures in the US and UK. Factor in the weak dollar and the possible need for more stimulus packages and you have renewed fears that the global economy is heading into the dreaded double-dip recession. As the petrochemical industry is a bellwether of economic performance, is the industry facing the inevitable? Will the second wave of Middle East capacities push the industry over the edge?

As if shrugging off the memory of when the
petrochemicals industry experienced the worst fall in demand and prices in the past 10 years, if not in its history, the industry has staged a modest but steady recovery in 2010 from the depths of
December 2008-January 2009.