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OPP sees rise in specialty grades.

Oman Polypropylene LLC (OPP) witnessed a substantial growth in specialty grades and has been doing fairly well in local and export markets despite the global economic crisis, a top company official says. OPP chief executive officer Dr Hamed Al Dhahab also said the company was producing below capacity because of difficulties in obtaining propylene feedstock from a nearby refinery. It was also not actively looking at diversifying into polypropylene co-polymers due to bottlenecks related to ethylene sourcing and handling and storage facilities. The plant operates in the Sohar Industrial Port, producing both commodity and special grades. 'OPP has made conscious and concerted efforts to move into specialty sectors. Evaluating our strengths and weaknesses while assessing the threats and opportunities in the marketplace, we have embarked on a path of growth in specialty segments including looking at niche markets,' said Dr Al Dhahab. Sales of specialty grades grew 139 per cent in January-September 2009 compared with the corresponding period in 2008. Twenty per cent of sales came from specialty grades against 15 per cent a year ago. BOPP, IPP film, cast film and fibre grades were the top-selling ones in the specialty sector. This year the company introduced two new grades - 1101RC for non-woven applications and 1100QC, a high-melt-flow injection grade.

Dr Al Dhahab: challenges metIn 2008 it introduced three, namely 1104KTI for BOPP applications, 1101N for fibre and 1100M for injection moulding applications, all of whom Dr Al Dhahab said were now well established in the market. About the impact of the global economic slowdown beginning in the second half of 2008, Dr Al Dhahab said OPP faced new challenges. The effect on local sales was not significant and the company was able to mange the adverse effect of price falls with customer-specific offerings. The export markets in Asia were hugely impacted by the demand slump along with the price crash during second-half 2008. OPP's sales were adversely affected for about three months in that period. 'However,' said Dr Al Dhahab, 'we made up for the loss in business in the last quarter of 2008 and, since the beginning of 2009, we have been doing fairly well in both domestic and export markets.' The challenge this year was more about restoring customer confidence and dealing with lower demand and lower product prices. 'OPP managed these challenges by rationalising its product and territory portfolio to reflect market realities and by initiating cost cutting measures across all functional areas. The cost cutting and belt tightening initiatives by the management have been successful, resulting in significant savings for the company,' Dr Al Dhahab commented. The company has been gradually increasing its exposure in the domestic market where its biggest customer is a BOPP films producer. OPP is very keen to develop the downstream industry in Oman and has been supporting efforts towards this end in partnership with Takamool. OPP's main overseas markets are the UAE, Pakistan, India and East Africa. A part of the production volume is sold through its distribution partner LG International in China, Southeast Asia and Europe.

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Publication:Gulf Industry
Date:Nov 1, 2009
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