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Tue 22 Apr 2014 02:01 PM

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Chemical industry to overtake oil, gas: report

IHS says Middle East chemical industry is at brink of 'second generation', with 'significantly different' investments

Chemical industry to overtake oil, gas: report
(Photo for illustrative purposes only)

Chemicals will be the fastest growing industry in the Middle East for the next three years, overtaking key sectors including oil and gas, transportation, defence and finance, according to international consultants IHS.

Exports across the region will increase by at least 8 percent annually in 2016, including a 6 percent rise in chemical exports compared to 2013, the company said in a report released ahead of the IHS Forum, which will discuss future growth in numerous Middle East industries.

China is expected to become the largest market for Middle East exports.

The rise in the Middle East refining and petrochemical industry has been helped by a changing global feedstock mix and increasing competition in the US, driven by the availability of cheaper gas feedstock.

The increased competition is driving investment in new technology and diversification.

“The Middle East continues to be a dominant force in petrochemical production,” IHS senior vice president and general manager of IHS Chemical, Dave Witte, said.

“The region faces an opportunity to pivot to strategies that leverage their growing technological expertise, expand their global footprint and seize upon commercial advantages.

“Additionally, it enables Middle East producers to continue building on their leading position in commodity production and expand into intermediates and higher-value products.”

Witte said the region was experiencing the beginning of the “second generation” of the Middle East chemical industry.

“This is a positive transition that many maturing industries face, as technology, competition and market dynamics mandate change,” he said.

“Investments are likely to differ significantly from the recent past, but will help move the industry in a new direction.”

The IHS Forum will be in Dubai, April 27-29.

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