An uptick in oil prices and high demand globally for chemicals and petrochemicals have put GCC petrochemical industry on course for a swift and strong recovery, says a study.
The move to attract investment for R&D, as part of broader efforts to transition to a knowledge-based economy and enhance competitiveness, bodes well for research and value-added innovation in the chemicals and petrochemicals sector, the new Covid-19 Recovery Roadmap (CRR), produced by Oxford Business Group (OBG) in partnership with Gulf Petrochemicals and Chemicals Association (GPCA).
The CRR explores the key part that the downstream hydrocarbons industry is set to play in supporting economic diversification efforts in the GCC. Titled “Innovation in the GCC Petrochemicals Industry”, the report shines a spotlight on downstream production across the region, tracking the segment’s history, development and outlook, in an easy-to-navigate and accessible format that includes key data and infographics.
Implications of the green revolution
The topical issue of sustainability and the implications of the green revolution for the industry are also explored by the study. The CRR considers the challenges that regional petrochemicals stakeholders face in their efforts to drive sustainable growth, which include measuring emissions along the supply chain. It also looks at the critical role that renewable sources of energy are set to play as part of the broader drive to minimise harmful greenhouse gas emissions.
In addition, the report asks whether the industry could be in line for a period of consolidation. It highlights the possible benefits that mergers and acquisitions could bring, which include easing the risk of oversupply and improving both resilience and efficiencies.
The CRR includes case studies charting the pandemic response and future growth strategies of Advanced Petrochemical Company and Maersk, all of whom are key regional stakeholders in the industry.
Call to put innovation at the core of business strategy
Commenting ahead of the report’s launch, Abdulwahab Al Sadoun, Secretary-General, GPCA, told OBG that the global recovery offered regional chemical and petrochemical companies a timely opportunity to contribute to economic diversification and further strengthen the industry’s resilience to external headwinds.
“The chemicals segment has the opportunity to put innovation at the core of its business strategy,” he said. “It is well positioned for the development of processes and products in the areas of sustainability, the circular economy, recycling, decarbonisation, feedstock evolution and digitalisation.”
Jana Treeck, OBG’s Managing Director for the Middle East, said the ongoing global recovery from the pandemic, and rising oil prices, augured well for the GCC’s chemical and petrochemicals industry.
Firm foundation for future expansion
“Sustained production in a challenging environment has provided the region’s stakeholders with firm foundations for future expansion,” Treeck said. “With forecasts indicating rising export demand, our report points to a bright future for the chemicals sector and a key role in the diversification plans of the region’s economies.”
The CRR on the GCC chemicals and petrochemicals industry forms part of a series of tailored studies that OBG is currently producing with its partners, including ESG Intelligence and Future Readiness reports, and other highly relevant, go-to research tools, such as country-specific Growth and Recovery Outlook articles and interviews. - TradeArabia News Service