A file photo of Fujairah Plastic factory in Fujairah, UAE

A file photo of Fujairah Plastic factory in Fujairah, UAE

GCC plastic market set to reach $50bn

Future plastics capacity growth will be driven by Saudi Arabia and the UAE where a number of specialised industrial parks focused on polymer conversion and multi industry are under development, says a report

August 2018

The GCC plastic market is expected to reach the market size of $50.2 billion by 2025, while growing at a CAGR of 5.9 per cent during 2017-2025, a new report said.

According to the ‘GCC Plastic market outlook’ by Goldstein Research, the GCC chemical industry is growing at a rate of 9 per cent annually impacting the similar growth pattern for polymers market.

Further, the GCC region is focusing on specialised parks to tap the potential leverage of plastics industry, such as Rabigh Plus Tech Park, Sadara’s Value Park and PlasChem Park in Saudi Arabia; Khalifa Industrial Zone and Al Saja’s Oasis in the UAE.

The UAE polymers market is expected to grow at a highest CAGR of 6.2 per cent

The UAE polymers market is expected to grow at a highest CAGR of 6.2 per cent

On the other hand, the environment concerns will shift the plastics manufacturing trends towards sustainability, resource efficiency, cost and functionality due to ever increasing demand for plastics majorly in solar power sector, construction industry and packaging industry, the report noted.

Plastics market in the GCC region is increasingly growing on the back of urbanisation and developmental activities, with plastic manufacturing capacity reaching to 2.5 million tonnes in 2016. Polyethylene terephthalate (PET) accounts for largest market share of nearly 70 per cent of the total engineering polymers.

The major sectors in the GCC region under high development activities are construction, transportation, electronics and healthcare, which contribute major share in the application of plastics. Manufacturing of polycarbonate (PC) acquires nearly 10 per cent of the GCC engineering polymers, which has wide application in the construction industry. The growth of construction industry and other end-use industries are propelling the GCC plastics market.

Goldstein Research analyst forecast said that plastics market is an important segment of the GCC chemical industry as it drives the chemical manufacturing at the secondary and tertiary level.


Saudi market dominates

Based on plastic product types, commodity plastics accounted to largest market share of 89 per cent in 2017, with largest share acquired by Polyethylene (60 per cent) followed by polypropylene (28 per cent). Commodity plastics are widely used across multiple industries whereas; engineering plastics are used only where required functionality is of mechanical and/or thermal properties.

Based on geography, Saudi Arabia accounts for nearly 65 per cent market share in 2017 followed by the UAE and Qatar. Over the past decade, Saudi Arabia polymers market has grown by 11 per cent in terms of production whereas, the UAE by 24 per cent and Qatar by 5.5 per cent with similar growth impact on the plastics industry. Over the forecast period, the UAE is expected to grow at a highest CAGR of 6.2 per cent.

The key players in the market are: Qatar Plastic Products Company (QPPC), Saudi Arabia Basic Industries Corporation (Sabic), Braskem, BASF, The Dow Chemical Company, Bayer AG, LyondellBasell Industries, ExxonMobil Corporation, Ineos Group AG, Arkema, DuPont, and others.


GCC Polymer industry

Meanwhile, the GCC polymer industry is expected to reach 34.5 million tonnes by 2022, supporting further downstream development, while growing at a CAGR of 3 per cent.

This is according to the ‘GCC Plastic Industry Indicators 2016’ report released at the 8th edition of GPCA PlastiCon by Gulf Petrochemicals and Chemicals Association (GPCA), the go to resource for industry data in the region early this year.

According to the report, future plastic capacity growth will be driven by Saudi Arabia, Kuwait and Oman. In 2016, GCC plastics producers’ sales represented 4 per cent of the global industry sales revenue, reaching $33-34 billion. The industry’s capacity expanded in 2016 by as much as 5 per cent, reaching 27.1 million tonnes. In previous years, Saudi Arabia alone accounted for 2 per cent of global polymer sales, and ranked as the eighth largest plastics producer globally.

Dr Abdulwahab Al Sadoun, secretary general of the GPCA, said: “Petrochemical producers are increasingly diversifying their portfolios, investing in new products and moving away from traditional commodity polymers towards specialties such as engineering plastics and elastomers. This is, in turn, supporting the expansion and development of the entire downstream industry in the region.”

Synthetic rubbers will witness the biggest number of products introduced in the following years, benefitting from expected growth in the transport and automotive sectors. By 2022, nearly 70 per cent of all incremental supply growth will come from commodities polymers, which represent 89 per cent of the GCC polymers capacity. GCC engineering and specialty polymers output grew by 15 per cent in 2016, reaching 2.5 million tonnes. The industry also comprises nearly 40,000 employees with additional 118,000 in supporting sectors.

GCC polymer consumption increased by 4 per cent in 2016, reaching 5 million tonnes. Saudi Arabia accounted for 67 per cent of the GCC polymer resins production in 2016 and was the largest polymers consumer in the GCC, followed by the UAE which accounted for 19 per cent.

Industrial packaging is the fastest growing end user market for polymers in the region. Consumer packaging accounts for 44 per cent, followed by the construction industry which accounted for more than a fifth. Plastic consumption in the GCC is increasing rapidly and reached 94 kg per capita in 2016.

Plastics consumption in Qatar is the fastest growing in the region, growing at 14 per cent between 2006 and 2016. This is double the growth posted by market leaders Saudi Arabia and UAE. Qatar however has the lowest consumption ratio to total polymer output. In 2016, that was just over 11 per cent, much lower than in other countries. In 2016, Oman enjoyed the highest ratio of polymer consumption to output in the region (48 per cent).

A number of industrial parks focused on polymer conversion and multi industry are under development in Saudi Arabia, the UAE and Oman, with some being built next to big resin production facilities.  

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