Saudi to increase share of petchem capacity

27 February 2007 11:55 [Source: ICIS news]

DUBAI (ICIS news)--Saudi Arabia is expected to grab at least 13% of the world's share of total petrochemical capacity by 2009, which will represent a 50% increase over the last decade, said a senior executive from the kingdom.

Despite growth throughout the petrochemical industry, it still won't be enough to provide adequate employment in the kingdom, warned Moayyed al-Qurtas, chief executive officer of the National Industrialisation Company (Tasnee).

“The biggest challenge for Saudi and the Gulf is ensuring economies grow in a way that increases labour supply,” he said at a conference in Dubai on Tuesday.

The oil, gas and petrochemical industries are characterised by being highly capital intensive but fall short in providing mass employment.

As a rule of thumb, every $1m (€757m) of investment provides one job in the petrochemicals compared with 200 jobs in the processing industry.

Al-Qurtas said the industry would have to diversify further downstream into the processing sector much like parts of Asia.

China has been able to provide mass employment through factories that convert plastics into retail goods for sale in the West and increasingly in its own country.

Separately, Al-Qurtas told ICIS news the killing of three French tourists in the northwest of Saudi would not deter new investment or damage the economy.

He refused to comment on Tasnee's announcement to buy Lyondell Chemical's titanium dioxide (TiO2) business for $1.2bn.

($1=€0.76)

By: Matt Kovac
+65 6780 4359

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