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Saudi Arabia, UAE to drive polypropylene resin sector.

Summary: The total polypropylene resin market for local conversion in the GCC is expected to reach $1.366 billion in 2016 on the back of strong government support.

The total polypropylene resin market for local conversion in the GCC is expected to reach $1.366 billion in 2016 on the back of strong government support.

GCC governments' focus on diversification to generate employment and reduce reliance on the oil and gas sector presents a conducive regulatory environment for growth in the downstream polypropylene industry.

Saudi Arabia and the UAE, in particular, are anticipated to lead the pack towards downstream diversification, Frost & Sullivan said in a report.

In the GCC, strong governmental support has contributed to the development of polypropylene downstream industries. The growth of downstream applications such as films, non-wovens and geotextiles is expected to bolster polypropylene demand in GCC countries, which have long been a net exporter of polypropylene due to minimum local use, the report said.

The report finds that the total polypropylene resin market for local conversion in the GCC earned revenues of $983.1 million in 2011 and estimates this to reach $1.366 billion in 2016.

The key end-user segments covered in this research are bi-axially-oriented polypropylene films, casted polypropylene films, carpet yarns, nonwovens, geotextiles, woven bags, injection molding grade and polypropylene in tje automotive sector.

"GCC states' easy access to polypropylene resin owing to their large oil and gas reserves widens the scope for the local conversion of polypropylene to downstream value-added products," said Vishnu Sankaran, associate director and head of Chemicals Practice in the Middle East and North Africa at Frost & Sullivan.

"With a burgeoning population and rising gross domestic product, GDP, key end-users, such as packaging and construction, are adding to the need for polypropylene in the GCC."

While companies in the region have been successful in developing world-scale petrochemical complexes, they lack the indigenous technologies required for certain downstream polypropylene products. This challenge is intensified by the nascent stage of research and development activities in the region.

"Hence companies, primarily technology-intensive downstream ones, are likely to form alliances with foreign firms to access necessary technologies," Sankaran said.

"The availability of personnel with relevant expertise in the operation of conversion machinery and higher focus on staff training are also crucial. Niche product grades that target specific applications in line with the development of the PP downstream industry will enable local suppliers to stay competitive."

-- business@khaleejtimes.com

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Date:Jul 20, 2013
Words:420
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