InterviewCapacity boost for north Africa petrochemicals

09 October 2009 16:43  [Source: ICIS news]

Growing interest in N Africa PetchemsLONDON (ICIS news)--Planned and speculative capacity increases could see north Africa’s petrochemical output surge by around 40-50% by 2020 from current levels, a consultant said on Friday.

North Africa could emulate the growth spurt seen in Latin America and the Middle East, and prove to be strategically important to the chemical industry in the longer term, according to Theo Jan Simons, global chemical industry lead for consultancy Accenture.

With the political situation stabilising within the region and the standard of living improving, north Africa has the potential to become a thriving market over the next decade.

Africa represents only a small proportion of global petrochemical production, and has limited levels of consumption. Besides South Africa, only Nigeria, Morocco, Algeria, Libya, Tunisia and Egypt have developed chemical production, said Simons.

Egypt and Algeria are expected to drive the capacity growth in the next five to seven years, he added. Production capability is forecast to more than double from 15m tonnes/year in 2008 to 34m tonnes/year in 2015. By 2020, this should total 43m tonnes/year.

Few foreign players have invested significantly in north Africa over the past few years. France’s Total Petrochemicals has shown interest in Algeria, India’s Indorama has targeted Egypt and China’s BlueStar has focussed on Nigeria. Dow Chemical has also been looking into the Libyan market.

Africa is starting to be of particular interest to companies in China and India, said Simons, with many of the new global players acknowledging the strategic opportunities offered by the continent.

“I think they’re eyeing it primarily with resource availability in mind; they have massive markets themselves but are generally short of the basic feedstocks. North Africa seems to be quite the reverse so this could be an interesting option,” said Simons.

China and India obviously have capital in spades to develop the local industries so this could be quite a powerful combination,” he said.

“There’s a long lead time with these investments; you’re not in petrochemicals for a fast buck – but players are starting to look slightly longer term than they did before and at how they can develop local markets.”

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By: Andy Brice
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