By Andy Sambidge
Industry chief warns that regional producers must not be complacent despite seeing $6bn revenues rise
Petrochemicals revenues reached an all-time high in 2013 hitting the $89.4 billion mark, with GCC-based revenues growing by $6 billion alone, according to the latest industry report by the Gulf Petrochemicals & Chemicals Association (GPCA).
According to the GCC Petrochemicals & Chemicals Facts and Figures 2013, revenues from GCC petrochemicals grew by 7.3 percent.
The figures showed that chemical sales revenue from the Gulf region is the second highest of any petrochemical producing region after Asia.
"2013 marked a turning point for the worldwide chemicals industry, signalling a return from the global economic downturn," said Dr Abdulwahab Al- Sadoun, secretary general, GPCA.
"And as the region with the second highest rate of sales growth, the GCC has demonstrated that its petrochemicals industry can compete with sector leaders."
Saudi Arabia, the region's largest petrochemical producer, accounted for 74.9 percent of the region's chemical revenue, roughly $66.9billion in sales while Qatar's chemical industry generated $11.5 billion in sales.
With analysts forecasting positive growth figures in the near future, regional producers must not be complacent, Al Sadoun warned.
"While the emergence of favourably priced feedstock - an advantage that the GCC chemicals producers have enjoyed over the 30 years - becomes available in other regions as shale oil and gas becomes commonplace, we as an industry need to focus on innovation," he said.
"Growth is assured, but we also need to transform our operations in a way that will make us relevant and profitable 10, twenty, thirty years from now."
Earlier this year, the chief executive of Saudi Basic Industries Corp (SABIC) said the global outlook for petrochemical demand over the next three years was positive and there was room for prices to rise.
Mohamed al-Mady was addressing a news conference after SABIC, one of the world's largest petrochemicals groups, earlier reported a 7 percent year-on-year increase in second-quarter net income.
Forecasts suggest shale gas, a potential feedstock for petrochemicals, will only be produced in large quantities from the United States in 2018, leaving room for improvement in petrochemical prices before then, he said.