GPCA '12: Plastics converters have to diversify to retain margins

28 November 2012 05:18  [Source: ICIS news]

DUBAI (ICIS)--Plastics converters should continue to diversify their finished-products profile in order to retain their meagre converting margins in Gulf Cooperation Council (GCC) countries, a senior executive at Packaging & Plastic Industries Co (PPIC) said late on Tuesday.

Meagre margins are a consequence of the prevailing high polyolefins resins prices and strong competition among processors based in the Gulf region,

“Margins are really mere minimum [this year], in the low single-digit percentage points. It is not a good year,” Mazen Khourhsheed, general manager of PPIC said at the sidelines of the 7th Gulf Petrochemicals & Chemicals Association (GPCA) conference.

“The plastics private sector is just suffering,” he said.

In 2011 three small-sized converters based in Kuwait announced bankruptcy, leaving 12 converters in 2012 to struggle to survive.

PPIC – the largest converter in Kuwait, with about 9,000 tonnes/year converting capacity – was able to make small margins by seeking further diversification in its finished-products portfolio.

“We have to continue to go further downstream and find new product applications, to move away from the strong competition in the commodity [finished products] market,” Khourhsheed said.

PPIC converts a range of products such as high density polyethylene (HDPE) and linear low density PE (LLDPE) shopping bags, polypropylene (PP) woven sacks and greenhouse agriculture films.

The 7th GPCA conference is a three-day event ending on 29 November.

Author: Ong Sheau Ling

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