Plastics production in the Arabian Gulf region is set to increase by around 3.2 per cent annually until the end of the decade, with Oman's plastics sector enjoying the strongest growth of the region.
GCC
This is according to a new study from the Gulf Petrochemicals and Chemicals Association (GPCA), which revealed that a sustained roll-out of strategic projects is enabling this increase.
"No matter the country or economic cycle, the growth of plastic production in the GCC is a unique success story in the Arabian Gulf countries’ continuing journey towards economic diversification," said Dr Abdulwahab Al-Sadoun, Secretary General, GPCA. "This is no doubt a testament to the long-term vision of the leadership who have invested in this sector, as well as a testament of plastics as a viable investment opportunity."
As per statistics from the GCC Plastics Industry Indicators 2015 report, the GCC plastic production capacity has tripled in the last 10 years, reaching 26.2 million tonnes in 2015, earning $32 billion in revenues. During the 2005-2015 period, annual production has risen 11.7 per cent, and clustered around prominent projects in Saudi Arabia.
Like Saudi Arabia, development strategies that benefit plastic production have also been implemented elsewhere in the GCC.
In 2015, expansions in the UAE have increased the country’s regional market share from six per cent to 20 per cent.
Despite the on-going challenges regarding oil price volatility, plastics capacity will continue to grow over the next five years, predicts the GPCA. Growth in Oman is projected to be the strongest in the region, at 17.7 per cent per year. Saudi Arabia, meanwhile, is expected to see a 3.2 per cent rise per year till 2020, a figure that is slightly lower than the 4.9 per cent growth in the last decade.
“With regional producers experiencing diminishing revenues and cheap raw materials available to our competitors, we are certainly in the midst of a challenging business environment. Due to the inherent versatility of plastics, an export oriented commodity, as well as strong demand from developing economies, plastics will continue to see a respectable growth rate in the near future," continued Dr Al-Sadoun. "Plastics are an inherent component of modern life, existing in diverse products such as cars, food packaging, furniture and even clothing."
The GCC Plastics Industry Indicators 2015 report was released at GPCA Plasticon, a dedicated conference for plastics converters, and includes insights relevant to the region’s plastics industry, including detailed figures on capacity, product growth and employment.