MIDDLE EAST: Arabian Gulf plastic producers urged to diversify their product portfolios

Plastics industry growth in the Gulf Cooperation Council (GCC) region has been impressive during the last decade, but plastics producers--attending the recent GPCA PlastiCon conference in Dubai--were encouraged to diversify their product portfolio to realize untapped potential of differentiated and specialized higher value plastic products in the future.

“Throughout history, humans developed because stone, iron and bronze helped them build survival kits, resulting in eras named after these materials,” noted Tasnee Chief Executive Mutlaq Al-Morished. “If we look at the world this way, then we are indisputably in the Plastic Age. By 2020, world plastics consumption will reach 380-million tons a year.”

Al-Morished told delegates the GCC plastics industry is a “feed in” industry for many other sectors, providing the building blocks for several companies that make products for end users. “Today, the GCC plastics industry is a commodities business characterized by mass production,” he said. “The industry is moving from commodities to the production of durable goods like cars, TVs and refrigerators. While this is valuable, the industry would gain more if we would move from producing goods that are fast in design and with a short time to market, like apparel and watches. These goods are less sensitive to economic cycles and market dynamics and would pave the way for Arabian Gulf producers moving into the production of capital goods.”

GPCA Secretary General Abdulwahab Al-Sadoun noted that the plastics industry is predicted to have a 3.2 % annual growth rate from now until 2020, and agreed that plastic producers will need to invest in diversifying and expanding portfolios.

“Plastics producers in the Arabian Gulf have rounded up a successful decade of growth,” Al-Sadoun said. “With regional companies facing diminishing returns and the availability of cheap raw materials to our competitors, it is no secret that we are in the midst of a challenging business environment. For regional plastics companies, diversifying the products portfolio . . . will result in hedging investments into products that are not affected by ongoing market instability,” he concluded.

Source: Weekly “PetroChemical News”, Durham, NC, USA; 18 Jan 2016
(Syed Rashid Ali, Karachi, Pakistan)