InterviewLow feedstock cost no help to GCC converters - VIDEO

16 June 2010 04:20  [Source: ICIS news]

By Prema Viswanathan

DUBAI (ICIS news)--Plastic converters in the Gulf Cooperation Council (GCC) do not enjoy the benefits of the low feedstock values in the region for a variety of reasons, a senior executive with a leading converter said on Wednesday.

“Ethane gas feedstock costs are very low in the GCC, but polymer prices paid by processors like us don’t reflect this reality,” said Hekmat Seif, executive vice president with NAPCO, a leading flexible packaging converter in the region.

Although plastic converters in the GCC enjoyed the benefit of proximity to raw materials, their polymer costs were linked to international prices, he said in an interview with ICIC news on the sidelines of the Gulf Petrochemicals and Chemicals Association (GPCA) Plastics Summit. The three-day conference ends on Wednesday.

Another challenge was the high freight to Europe, which made exports to that region uncompetitive, said Seif.

“This, in conjunction with the depreciation of the euro, has made it hard for us in the recent past to compete with European converters,” he said.

The company’s major markets were the GCC, North Africa, Europe, occasionally the US, and Asia, especially India, Pakistan, he added.

Demand from the industrial and petrochemical packaging sector, as well as agriculture, hygiene and personal care was very robust in the GCC, he said.

“Saudi Arabia in particular is expected to show strong demand growth of around 15% this year. Last year was even higher, so we increased our production to 120,000 tonnes/year from 110,000 tonnes/year,” said Seif.

Another challenge was the pursuit of sustainability in packaging, he said.

“Sustainability is the way of the future, so we are preparing ourselves to cater to future demand for biodegradable packaging material. Demand for these materials is improving in Europe, the US and UAE,” he said.

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By: Prema Viswanathan
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