04 December 2008 12:04 [Source: ICIS news]
SINGAPORE (ICIS news)--Middle East chemical players are expected to put their capital to good use during the extended trough in the investment cycle, when oil prices hover above $50-$60/bbl, a McKinsey & Co consultant said on Thursday.
The global chemical industry’s return on invested capital during the current downturn could potentially be more compared with returns invested during past downturns, according to a presentation by McKinsey’s Florian Budde at the 3rd Gulf Petrochemical and Chemicals Association (GPCA) forum.
Gas would be a major source of growth for regional players given its compounded annual growth rate of 21.1% through 2012, Budde said.
But naphtha is expected to grow in importance as a feedstock in the long term to 2020, the consultant said.
Budde said McKinsey has identified 44 out of 106 chemical products or processes as viable for new investment, including ethyl vinyl alcohol, high density polyethylene (HDPE) and low density PE, and ethylene oxide.
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In the long term, the region’s players must strive to develop new technologies through their own research and development programmes, Budde said.
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