Economic recovery to buoy GCC chemical industry growth

The chemical and petrochemical industry in the Arabian Gulf is poised for growth in 2021-2022, as the regional and global economy is forecast to recover in the aftermath of the COVID-19 outbreak, the Gulf Petrochemicals and Chemicals Association (GPCA), the voice of the chemical industry in the Arabian Gulf, announced on Tuesday.

The regional chemical industry is anticipated to see growth across all key indicators including chemical sales revenue, production output and international trade off the back of an increase in regional economic activity, supported by a rapid vaccination roll-out, and the global economic rebound, GPCA said.

According to the World Bank, GCC economies are expected to return to an aggregate growth of 2.2 per cent in 2021, buoyed by global economic recovery, projected at 5.6 per cent and the revival of global oil demand and international oil prices. Earlier this month, Brent crude rose to its highest levels since October 2018, reaching $86.04 per barrel.

Higher oil output combined with an improved oil price outlook are boosting fiscal revenues in the region, as hydrocarbons generate significant revenue for the GCC. This, combined with strong economic and manufacturing activity in China, which represents the GCC’s largest export market, GPCA forecasts a healthy chemical and petrochemical GCC market outlook, which will spill into 2022.

Nevertheless, supply chain delays and disruptions will likely persist, leading to an increase in the cost of commodities, including some of the chemical industry’s key inputs. With higher oil prices, feedstock prices are expected to remain elevated, and margins to decrease.

To discuss these trends and highlight the chemical industry’s role in a post-pandemic recovery, the Annual GPCA Forum will convene global and regional industry leaders from over 500 companies in 50 countries during December 7-9 in Dubai.

The forum will take place under the theme ‘Redefine. Reshape. Reinvent. The Chemical Industry in a Post-Pandemic Reality’ to shed light on the lessons learned from COVID-19, the opportunities for investment in the regional chemical sector, and drive multi-stakeholder partnerships. This year’s edition will combine an insightful conference program, a must-see speaker line-up and an array of networking opportunities, bringing the regional and global chemical industry together under the same roof for the first time since the spread of the virus in early 2020.

Ahmed al Jahdhami, CEO Downstream – OQ, the Sultanate of Oman’s integrated energy group, will be among a host of top executives who will be addressing the event.

Dr Abdulwahab al Sadoun, Secretary General, GPCA, commented, “The chemical industry in the region is emerging from a period of significant disruption, subdued growth and an unprecedented decrease in consumer demand in a range of end-user sectors, which chemical producers serve. At the same time, the industry demonstrated resilience like never before, as it fulfilled its vital role to serve society’s needs and help equip the healthcare industry with the equipment and materials it requires to combat the spread of the virus and distribute the vaccine. The Arabian Gulf region is now entering into a gradual recovery which will require it to maintain resilience and keep production output high in order to cater to end-user markets at home, in Asia and the world.

“Beyond maintaining operational and supply chain resilience, the next big imperative for GCC producers will be to deliver on their sustainability objectives, including lowering emissions, investing in innovative technologies, driving partnerships across the value chain to reduce their environmental footprint and that of their products, and advancing the plastic recycling agenda. At the Annual GPCA Forum, we provide a senior leadership platform built on leading thought leadership and cutting-edge expertise to help facilitate the discussions and exchange needed to drive progress on these important issues and support the sustainable development of the industry in the region. I look forward to welcoming you all to this prestigious and must-attend forum at the heart of the Middle East in Dubai for a productive and meaningful exchange of ideas and lessons learned.”