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The GCC chemical industry’s overall revenues are likely to return to growth this year, after registering a decline last year, said Abdulwahab Al-Sadoun, secretary general of the Gulf Petrochemicals & Chemicals Association (GPCA).
“We expect 2017 to be much better, reflected by many member companies… who registered significant profits in Q3 and we expect Q4 to be better,” he said, quoted by ICIS.
The industry reported $77 billion in sales revenue in 2016, down 3 percent year-on-year (YoY) due to lower global petrochemical prices, Al-Sadoun said, speaking to journalists on the sidelines of the ongoing GPCA Forum in Dubai.
The chemicals sector contributed around $43.8 billion to GCC economies last year, as countries in the region make headway on megaprojects to meet growing demand, particularly from Asia, he added.
GCC chemicals output grew at the fastest pace in five years in 2016, 8.5 percent to reach 158.8 million tonnes.
Capacity additions in 2016 were driven by Saudi Arabia, with the Kingdom increasing production by 12.7 percent YoY to 106.7 million tonnes per year, according to the GPCA.
In line with the Saudi petrochemical industry’s product diversification plan, a number of new products were introduced in the Kingdom, with the strongest growth rate in the specialty chemicals segment.
The Saudi chemical industry’s contribution to the manufacturing segment grew from 23 percent in 2015 to 27 percent, implying the industry’s increasing role in economic diversification, in addition to boosting the non-oil economic growth.
The Kingdom remains the largest chemical producer in the region, accounting for 67 percent (more than two thirds) of the GCC’s output.
The UAE came second with 17 percent, followed by Qatar (five percent), Kuwait and Oman (four percent each) and Bahrain (two percent).
The chemicals industry provided 152,100 job opportunities in the GCC last year, Al-Sadoun said.
Meanwhile, a total of $584 million was invested in research and development in the industry.
Asked about the introduction of value-added tax (VAT) in GCC countries, Al-Sadoun said the tax would have “very limited” impact on the region’s petrochemical sector.
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