RIYADH – The petrochemical industry in the Gulf region needs to focus more on technology and innovation, offer customers more technologically advanced products and design products that meet global demand, said Mohamed Al-Mady, Saudi Basic Industries Corporation (Sabic) Vice Chairman and CEO, who is also Chairman of the Gulf Petrochemicals and Chemicals Association ( GPCA ), while speaking at the Seventh GPCA Forum in Dubai Wednesday. In his opening remarks to a large gathering of industry leaders at the three-day forum under the theme “Sustaining Competitiveness in a Rapidly Changing World,” Al-Mady said the region's future competitive advantage will have less to do with feedstock price and supply and more to do with technology and innovation. “We need to direct our efforts toward offering our customers more technologically-advanced and complex products. Our future success centers on our ability to reach out to customers looking for more sophisticated and technologically-advanced products,” he said. Al-Mady said the global petrochemicals industry has worked hard to recover from the slump of late 2008 and early 2009. The Gulf petrochemical industry has also shown impressive strength and remarkable resilience, though still in its infancy, he added. Citing the increasing importance of sustainability, Al-Mady said it plays a significant role in the competitive landscape - providing more feedstock options and less waste. He said many chemical companies have forced reduction in waste and improved efficiency, as energy and water costs have risen and government mandate has forced technological advances required for emission reduction. To remain competitive, a balance needs to be struck between the burning of hydrocarbons for electricity and water production and the development of value-added downstream industrial development, he pointed out. The GPCA annual forum is a pivotal event in the global petrochemicals and chemicals calendar, providing attendees with an opportunity to access and network with industry leaders and decision-makers, and gain the latest market intelligence. Meanwhile, the GCC petrochemical industry is facing serious challenges due to shortage in gas supplies amid growing demand which will widen the demand-supply gap in the coming years, Dr. Rashid Ahmad bin Fahad, UAE Minister of Environment and Water, said at the forum. In the Middle East, UAE and Iran have higher consumption than production, while Saudi Arabia meets its own demand with production at 99.23 billion cubic meters. Qatar, Algeria, Egypt and Oman are net gas exporters that provide a good balance. “The economic troubles in the US complicated by the political impasse over the impending fiscal cliff coupled with the European economic recession and debt crises are dampening global recovery,” Dr Rashid said. “Moreover the rapidly growing emergent eastern economies are also exhibiting signs of slowing down. Consequently these events have precipitated significant concerns regarding the risk of deepening of economic woes. Such developments could adversely impact the global as well as the regional petrochemical producers resulting in lower revenues.” “Though in our region, the economy is more stable, the global economy's down turn represents a key concern for all of us due to the accompanying uncertainties about future growth and the subsequent impact on our strategic hydrocarbon industries. Given that historically demand for oil and petrochemicals is influenced by interrelated factors such as the economy, population growth and government policies.” — SG
