Saudi Arabia aims to be among top 10 global plastics exporters

Saudi Arabia is the largest producer of polyolefin, accounting for 56 percent, in the Middle East

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Saudi Arabia aims to rank among the world’s top 10 exporter of plastics and create 17,000 additional jobs in the sector, while Abu Dhabi is fast emerging as an important hub for plastic convertors, said a top official.

“One of the prevailing trends across the region is the focus on optimizing petrochemical integration to support the economic diversification programs in the GCC,” Dr Abdulwahab Al-Sadoun, secretary-general at Gulf Petrochemicals and Chemicals Association (GPCA), a leader in hydrocarbons.


“With the current low oil prices, this shift towards plastic processing has the potential to be a game changer for the region. It will not only drive increased exports but also support local industries that generate new jobs and add higher value to the local economies – another priority for the regional governments,” he added.

Dr Abdulwahab Al-Sadoun was commenting on a new report released by GPCA and the international consultancy firm Nexant.

The report titled ‘A New Horizon for the GCC Plastic Processing Industry’ will be released during the sixth edition of the two-day GPCA PlastiCon 2015, the annual international conference for plastics conversion that started Sunday at the Conrad Hotel, Dubai.

The report highlights that polymer production in the GCC region has increased dramatically led by thriving exports and rising local demand. Plastics exports made up for the largest non-oil sector contribution to the Saudi Arabian economy accounting for 35 per cent of the non-oil export revenues.

The report states that the focus of Saudi Arabia and the UAE to boost the growth of small and medium enterprises (SMEs) for plastic processing will further benefit the industry.

The report points out the strong correlation between GDP and polymer demand growth. “A higher demand for polymers is a strong indication of robust economic activity,” said Dr Al-Sadoun.

“The region currently accounts for 7 percent of global demand. The high GDP and population growth and current low levels of per-capita polymer consumption at only 14 kg, half that of Western Europe, present a robust growth outlook for the GCC.”

According to the report, the regional petrochemical industry’s growth is dominated by the production of commodity grade polyolefins with 70 percent of the Middle Eastern ethylene consumed for polyethylene production and 91 percent of propylene used in polypropylene.

Saudi Arabia is the largest producer of polyolefin, accounting for 56 percent, in the Middle East, with increased capacity across the region to feed the export market and new plastic processing industries.

In other key findings, the report states that the Middle East accounted for 7 percent of the global polyethylene demand in 2013, with Saudi Arabia being the largest consumer in the GCC. Demand for polyethylene in the GCC – used principally by the packaging industry – has been growing at a CAGR of 5.2 since 2008, and is set to grow at a CAGR of 6.2 per cent through 2018. The demand will be led by the ongoing infrastructure development projects.

Demand for polypropylene, used in fiber for textiles and BOPP film, in the Middle East also accounts for 7 percent of the global market, and is set to grow 7 percent in the next five years in the GCC region as it develops its downstream industries. Similar growth trends are reported for polyvinylchloride and polystyrene.

PlastiCon 2015 will also dedicate a special session to the effect of crude prices sharp decline on the polymer market.

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