Business & Money | Sunday 4 February, 2018 3:05 am |

With the drive towards economic diversification, the chemical and petrochemical sector in Saudi Arabia is accelerating the achievement of the objectives of the Saudi vision 2030. The vision which have made manufacturing the core of the its industrial objectives, thus providing new business opportunities in addition to supporting the small and medium enterprises in the Kingdom, and contribution to job creation.

The chemical industry is one of the fastest growing industries globally and according to a recent report issued by the Gulf Petrochemicals and Chemicals Association (GPCA), the production capacity of the petrochemicals industry in the GCC region witnessed significant growth in 2017. The chemical production reached 167 million tons, mainly driven by the increased production in Kingdom of Saudi Arabia which was estimated at 12.7% per year.

The Kingdom has achieved a 5.8% growth rate in the petrochemical industry outpacing the 3.7% growth rate witnessed in the region as a whole.

Asia holds the largest market share in world chemical sales with 61%, China comes second place with 40%, Europe 17% and North America 4%, and 2% for the rest of the world. With the global demand on chemical products which is expected to double by 2030, the GCC region can have a significant role in meeting this demand.

Despite the positive outlook of this sector, it encompasses some challenges represented in the competitiveness of local and global markets, the high costs associated with raw material, and the production costs in addition to limited marketing activities. Producers of the petrochemicals products are also faced with competitive prices of the products from United states that is using shale gas as its raw material, the Chinese new technologies relying on coal-based industry. Limited investments in the technology and innovation are also affecting the development of this industry.

During the 15th edition of the Saudi Plastic & Petrochemicals expo held last Jan. 21-24 2018 at the Riyadh International Convention & Exhibition Center, Mohammed AlSheikh, Marketing Manager at Riyadh Exhibition Company, organizer of the expo, said “the Saudi Plastics and Petrochemicals expo aims to shed light at the opportunities and challenges associated with this promising sector, and try to propose solutions presented by the leading companies participating in this year’s edition.”