TASNEE official urges Europe to invest in Mideast chemicals

10 February 2010 15:12  [Source: ICIS news]

VIENNA (ICIS news)--European chemicals companies have a “window of opportunity” to invest in the Gulf Arab region, an official with Saudi petrochemicals producer National Industrialisation Co (TASNEE) said on Wednesday.

The shift away from ethane feedstock toward mixed feeds in the Middle East is widening the derivatives product mix, providing opportunities for European companies to leverage their technologies, said TASNEE CEO and vice chairman Moayyed Bin Issa al-Qurtas.

Al-Qurtas was speaking at the seventh annual meeting of the Global Petrochemicals Conference in Vienna, Austria, which was organised by the World Refining Association (WRA).

“The European chemical industry lost decades by not participating in the Gulf region,” said Al-Qurtas. “Maybe there is still time for the European industry to catch up.”

But European players should act fast, he said, as Asian players are improving their technological capabilities.

For now, chemical companies in China and India are focusing on their own territories and, in many instances, are still improving their own technologies, Al-Qurtas said. “But there’s a strong drive for the development of technologies in India and China.”

He added: “If Europe does not move fast to leverage its technologies, in about two or three years’ time you will see technologies [from China and India] developed and utilised in our region.”

Europe has traditionally led the development of chemicals technologies, “but, with a few exceptions, we have not seen much European investment in the Gulf region”, said Al-Qurtas.

Exceptions included LyondellBasell and Borealis, he noted.

The increased complexity of new projects in the Gulf Arab region will give European players a strong competitive advantage, he told delegates. “You can leverage all your technologies there,” he said.

In particular, Saudi Arabia intends to develop labour-intensive industries. “We need to create jobs,” stressed Al-Qurtas. “To create jobs, we need to promote downstream products.”

Investing in products for which regional demand is currently weak should not be a problem, he stressed. “Once the molecules are there, demand will be encouraged. It’s a snowball effect.”

Potential areas for investment include products that supply growth sectors, such as automotive, construction, metals processing, packaging and consumer goods, he said.

The Saudi government lists these as priority industries in its “clusters” programme.

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By: Anna Jagger
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