16 May 2014 09:38 [Source: ICIS news]
PATTAYA, Thailand (ICIS)--The US investment surge in chemicals, manufacturing and R&D capabilities may be “bigger than anyone has calculated”, the head of Dow Chemical’s Asia-Pacific business said on Friday.
“The US is rapidly redrawing global investment models with no end in sight at this stage. What’s happening in the US can only be described as unprecedented,” said Peter Sykes, president of Asia-Pacific at Dow.
“The global impact of US shale gas and tight oil, in terms of scope and speed, is changing faster than anyone predicted,” he added.
Sykes addressed delegates as a keynote speaker at the Asia Petrochemical Industry Conference (APIC).
In 2003, the US chemical sector generated revenues of around $488m. This is projected to grow to over $1tr by 2018, with an export surplus of $70bn, he noted.
“Investments are flooding into the US. We’re tracking over 120 manufacturing investments representing over $100bn in capital,” said Sykes.
There are four distinct waves of investment related to shale gas and tight oil, he said. The 1st is in upstream oil and gas production which has taken place and is continuing, he said.
The 2nd wave is in petrochemicals and steel where there are distinct feedstock and energy advantages in production.
“US gas prices are one-third of Europe’s and one-fifth of Asia’s,” Sykes said.
“We think we could see 5-6 crackers in the 2017-2019 timeframe,” said Sykes.
The 3rd wave is in chemical investment downstream from the crackers, building nearby or co-locating.
“This is taking place and validates the [cracker] investment rationale. This wave could see even more investment. Companies are mitigating exposure abroad and re-shoring to the US. But also FDI (foreign direct investment) is making up half of the $100bn in investment,” said Sykes.
“No one has properly calculated the potential impact. We’re near the tipping point for investing in computers, electronics, appliances and furniture in the US. This could add $80bn-$120bn in annual output and create 3m additional jobs,” he added.
The 4th wave of investment is just starting – the building of more knowledge-based enterprises in the US such as R&D and technical centres to complement a larger manufacturing base, the president said.
“As manufacturing expands, this requires more innovation and brainpower. We are building a new R&D centre in Lake Jackson, Texas by 2016 to align with our manufacturing. This will house over 2,000 people,” said Sykes.
APIC is being held in Pattaya, Thailand, from 15-16 May.
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections