APIC '07: Middle East must diversify downstream

17 May 2007 12:16  [Source: ICIS news]

TAIPEI (ICIS news)--Middle East petrochemicals companies should focus more on intermediates and specialties as the global basic chemical markets are becoming saturated, said Ed G Gartner, SRI Consulting’s assistant director of world petrochemical programme.


Through developing intermediates, Middle East producers can integrate their upstream and downstream facilities, upgrade the by-products from basic chemicals, develop the domestic downstream markets and create jobs, Gartner said at the Asia Petrochemical Industry Conference in Taipei on Thursday.


“There are more chances, if you have polycarbonate and polyols, to develop and increase employment in the country", he added.


However, the shift from basic to intermediate and specialty chemicals could present many hurdles, such as more complicated plant configurations, logistics and transportation, failure to start up new plants on time and on budget, higher capital investments and lower return on investment, said Gartner.


“The Middle East petrochemical strategy looking forward is different from looking back,” he added, noting that overall project costs in the region have increased dramatically, and traditional key markets such as China are not only posing opportunities but also commercial threats.


The markets in China market stop buying periodically, while there is competition from major petrochemical producers such as ExxonMobil, Shell, BP, Dow, BASF and Bayer for business in the country, he added.


By: Chow Bee Lin
+65 6780 4359

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