Please highlight some of the critical functions of the Gulf Petrochemicals and Chemicals Association.
GPCA was established in 2006 to represent the downstream hydrocarbon industry in the Arabian Gulf. Today, we voice the common interests of more than 250 member companies from the chemical and allied industries, accounting for over 95 per cent of chemical output by volume in the GCC.
GPCA supports the petrochemical and chemical industry in the Arabian Gulf through advocacy, effective networking and thought leadership initiatives aimed at helping member companies to connect, share and advance knowledge, contribute to international dialogue, and become prime influencers in shaping the future of the global petrochemicals industry.
We are committed to providing a regional platform for stakeholders from around the world through our six working committees – Plastics, Supply Chain, Fertilisers, International Trade, Research and Innovation, and Responsible Care (Health, Safety and Environment). We organise a series of annual conferences and awards, and publish an array of industry reports and reliable information about the chemical industry in the region.
As an anchor body for the regional petrochemicals industry, how expansive in GPCA’s view is the role of Kizad’s Polymers Park as an enabler for sectoral growth?
The creation of Kizad’s Polymers Park is a significant step forward in the UAE’s economic diversification drive and supports the growth and development of the plastics sector in the region. Beyond their contribution to the plastics industry, the development of value parks, such as Kizad’s Polymers Park, contribute tremendously to socio-economic development. Thanks to the concept upon which they are built, value parks when coupled with an equally strong and dynamic base of a downstream industry, help to serve both national and international markets, while multiplying their contribution to the region’s GDP and job creation.
On average, the combined value of hydrocarbon resources is multiplied 1.9 times when the oil is converted to base petrochemicals but is multiplied 8.3 times if the same gets converted to a resin; the value of oil increases 15 times when the final product is a downstream conversion product, such as packaging material. The petrochemical industry has a significant job multiplier effect, where 1 job in the petrochemicals industry helps to create 4 new jobs elsewhere in the economy. In comparison, greater downstream penetration has an even higher job multiplier effect at 7 times or more. The success of polymer clusters can spur and enable other key non-polymer clusters that contribute further to growth and diversification of the regional economy.
How has the GPCA supported Kizad and the Polymers Park in its initiatives?
Since its inception, GPCA has consistently advocated for the development of the downstream industry in the Arabian Gulf and supported its members on their journey to success through its advocacy, networking and thought leadership pillars in tandem with the industry’s exponential growth. Since 2006, we’ve witnessed the chemical sector in the region grow from 9.7 metric tons to 33.7 MT – this is in no small part thanks to its availability of competitively priced feedstock, proximity to key export markets, and the collaborative effort and vision of regional leaders. GPCA is proud to have stood by the industry over these years and for having provided a platform for knowledge sharing and best practice exchange to support its further growth.
On numerous occasions we’ve provided a platform for networking and collaboration on the topic of industrial clusters. As part of our Annual GPCA Forum in 2019 we hosted a dedicated session on chemical value parks, which saw government and industry leaders discuss how industrial clusters and value parks can be developed, how clusters affect a region’s economic future, and the way in which a region can establish strategies and actions to drive its economy, clusters, and value parks forward.
Kizad’s Polymers Park is a prime example in the UAE’s drive towards value creation and economic development. However, in order to create a truly enabling environment in which value parks can prosper, we would need to develop SME-tailored infrastructure, on-site shared services, strong logistics systems, ensure the integration of services and operations to support demand, as well as improved utilisation rates of assets.
How is the Polymers Park proving beneficial to GPCA’s member organisations?
GPCA has a diverse member base both geographically and by sector. Our members come from different parts of the globe and range from some of the largest chemical and petrochemical producers in the region, to multinational upstream players to SMEs, converters, waste management companies, logistics service providers and others. Kizad’s Polymers Park benefits our members in a variety of ways. It allows access to competitively priced raw materials, favourable investment policies, as well as proximity to key export markets such as Africa and Asia. It brings the polymer value chain together in one centralised hub and helps to reduce utilities and supply chain costs, thus contributing to the competitiveness of the regional industry. It also helps to attract foreign investment into the region.
How do you envisage the growth of the regional polymers industry and the Polymers Park’s pivotal role?
The share of polymers in the region’s production capacity as well as revenue has been significant over the last decade, and the segment will continue to drive growth into the future. Performance polymers and rubbers grew at the highest CAGR at 20.2 per cent from 2010-2020. The strongest contribution to GCC chemical exports over the past decade came from polymers, which claimed almost one third of total export volume in 2019. At the same time, polymers contributed to almost half of the chemical sales revenue (48.6 per cent) as well as exports (29.6 per cent) generated by the GCC industry in 2019, making it the largest contributor to the GCC chemicals trade revenue surplus.
We estimate GCC production of commodity polymers and performance polymers to reach 38.5 metric tons by 2030. The UAE’s plastics production is estimated to reach 7.5 million tons by 2030, cementing its position as the second largest polymers hub after Saudi Arabia. Plastics growth in the UAE will be spurred by Borouge 4 – the fourth expansion of Borouge’s integrated polyolefins complex in Ruwais – which will more than double the current 4.5 million tons per year capacity of its production site by 2030. The Polymers Park will play a significant role in the industry growth narrative by offering a world-class infrastructure network for all necessary utilities, ensuring reliable and efficient supply for polymers conversion, and accelerating investment and innovation in the region’s plastics industry.