gcc chemicals fact sheet

5/28/2018 Gcc Chemicals Fact Sheet

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GCC PETROCHEMICALS& CHEMICALS INDUSTRY

Facts & Figures 2012

GCPA_2012_Facts_Figures_1111.indd 1 12.11.13 18:33


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About The Gulf Petrochemicals

and Chemicals Association(GPCA):

The Gulf Petrochemicals and Chemicals Association

the petrochemical and chemical industries in the Gulf



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Facts & Figures 2012

GCC PETROCHEMICALS& CHEMICALS INDUSTRY



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GCC Petrochemicals & Chemicals Industry Facts & Figures 2012

Table of

Contents

1. Preface 06

2. About Chemicals Industry 07

3. GCC Chemicals Industry and Economyin 2012 11

3.1. Contribution of the chemicals industryto regional and national GDP 13

3.2. Contribution of chemicals industryto manufacturing output 20

3.3. Industries dependent upon chemicalsindustry 21

3.4. Share of Chemicals in non-oil exportson regional and national levels 22

4. GCC Production Capacity by Product(2008-2012) 23

4.1. GCC Capacity: Breakdownby Product Segment 26

4.2. GCC Capacity: Breakdownby Value-chain 28

4.3. Basic Petrochemicals 29

4.4. Fertilizers 30

4.5. Polymers 32

4.6. Top 10 chemical products producedin the GCC 34

4.7. Global Share of GCC top 10 Products 35

5. GCC Production Capacity by Country(2008-2012) 45

5.1. GCC Production Capacity by Country 46

5.2. Basic Petrochemicals: Breakdownby Country 47

5.3. Fertilizers: Breakdown by Country 48

5.4. Polymers: Breakdown by Country 49

5.5. Fine Chemicals: Breakdown by Country 50

6. GCC Capacity Utilization (2011-2012) 51

6.1. Capacity Utilization by Country 52

6.2. Capacity Utilization by product segment 53

6.3. Worldwide and GCC CapacityUtilization Comparisons 54

7. GCC Chemicals Industry Growth Pattern

(2012) 55

7.1. Production, Regional Consumptionand International Trade 56

7.2. Chemicals industry growth performanceagainst total manufacturing 57

7.3. International comparison of GCCchemicals production growth byproduct segment 58

7.4. International comparison of GCCchemicals production growth by region 59

8. Global Chemicals Industry (2012) 61

8.1. World chemicals output 62

8.2. World chemicals export by Regionand Country 64

8.3. World chemicals import by Regionand Country 66

8.4. World chemicals consumptionby Region and Country 68

9. International Trade (2012) 69

9.1. GCC Export by product segment 71

9.2. GCC Import by product segment 73

9.3. GCC Export by country 75

9.4. GCC Import by country 76

9.5. GCC Export by destination 77

9.6. GCC Import by origin 79

9.7. GCC international trade balance:breakdown by product segment 80

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504Gulf Petrochemicals & Chemicals Association

9.8. GCC international trade balance:breakdown by country 81

9.9. Detailed analysis of GCC exports bydestination 82

major regions 85

10. GCC Intra-Regional Trade (2012) 87

10.1. Intra GCC export by product segment 88

10.2. Intra GCC export in total chemicalsexport 90

10.3. Intra GCC export in value terms 91

10.4. Intra GCC import in total chemicalsimport 92

11. Employment (2012) 93

11.1. Employment in GCC chemicalsindustry 94

11.2. International comparisons of GCCchemicals employment 96

11.3. Employment in GCC chemicalsindustry by occupation 98

11.4. Employment in GCC manufacturingand chemicals industry 100

11.5. Workforce nationalization in GCCchemicals industry 101

11.6. GCC employee productivity:chemicals sector and manufacturing 102

12. Sales Revenue (2012) 103

12.1. GCC Petrochemicals Industry SalesRevenue by Country 104

12.2. Share of GCC in WorldwideChemicals Sales Revenues 106

13. Research and Development (2011) 109

13.1. Number of chemicals patents issuedworldwide and in the GCC 110

of chemistry worldwide and GCC 112

13.3. R&D spending 114

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A message from

the Secretary General

Dr. Abdulwahab Al-Sadoun



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Gulf Petrochemicals & Chemicals Association 7

About ChemicalsIndustry

2.



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9. International Trade (2012)


Chemicals Li fe Cycle

Chemicals industry takes natural raw materials such as oil and natural gas, as well inorganic minerals suchas limestone and salt and converts them into thousands of chemical products. Based on the United NationsEnvironmental Program, there are about 248,000 chemical products known to date. Chemicals industry servesnearly every sector of economy by providing essential inputs in the form of chemical productions or solutions. As

ISIC Rev.3Reference

Description

2401Manufacture of basicChemicals

Manufacture of basic chemicals, except fertilizers and nitrogen

compounds Manufacture of fertilizers and nitrogen compounds Manufacture of plastics in primary forms and of synthetic rubber

2402Manufacture of otherchemical products

Manufacture of pesticides and other agro-chemical products Manufacture of paints, varnishes and similar coatings, printing ink and

mastics Manufacture of pharmaceuticals, medicinal chemicals and botanical

products Manufacture of soap and detergents, cleaning and polishing

preparations, perfumes and toilet preparations Manufacture of other chemical products

2403Manufacture of man-

As described above, output of the chemicals industry includes base products, intermediate products, specialties

Chemicals life cycle starts with extraction of raw materials (mining, extraction of oil and gas and others) which

a wide variety of downstream chemical products. These chemical products can, in turn, be used as feedstock forchemicals production further downstream, industrial activities and services, or production of consumer products.At any stage of life cycle, chemicals are being shipped to various locations within the country of its production orinternationally.



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2. About the Chemicals Industry

Raw materials(oil, coal, gas, air, water, minerals)

Basic inorganic and organics i.e. ammonia, gases,acids, saltsPetrochemicals: Benzene, Ethylene, Propylene,Xylene, Toluene, Butadiene, Methane, Butylene

Chemicals processing

Fertilizers, industrial chemicals, plastics, propylene

CONSUMERS

SPECIALTYCHEMICALS

CONSUMER CAREPRODUCTS

LIFE SCIENCEPharmaceuticals,Agrochemicals,Biotechnology

OTHERINDUSTRIESMetals, Gas,Automobiles,Textiles etc.

Source:OECD, 2001



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2. About the Chemicals Industry

2nd largestmanufacturing sector

Every job in the industry

creates3 additional jobs elsewhere

Directly employs more than people

138,700people

34%of allemployees in the

chemicals industry arenational citizens $US 97.3 billionworth of chemicals output in 2012

Chemicals products areintegral partof various industries in GCC economy

Chemicals comprise 47%of GCC non-oil export in 2012

Production capacity of

129.2 million tonsin 2012

Growth of 12.2%per annumbetween 2008 and 2012

Represents 2.9%of GCC GDP in 2012



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3.



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The GC C chemic als

industry: an enabl er ofeconomic development

3. GCC Chemical Industry and Economy in 2012

The chemicals and petrochemicals industry in theGCC plays pivotal role in the development of theregional and national economies. The industry haschanged drastically in the last decades with GCCemerging as a major hub for the global chemicalindustry. Thirty years ago, GCC was a net importerof chemicals, whereas currently the vast majority ofchemicals production exported to global markets. The

chemicals industry has a large impact on the economy,particularly in terms of value addition and job creation.It is believed that the chemicals industry will play apivotal role in enabling development as the GCCeconomies go through structural challenges related creation of new employment opportunities.

At the heart of the chemicals industrys continuedgrowth is the availability of, and access to, natural gas one-third of the worlds oil and quarter of worldsnatural gas reserves are found in the region, however,

competition for the natural gas from other industriessuch as power generation and water desalination hadled to constraint in supply of the gas to the chemicalindustry in the GCC region.

The chemicals industry plays a key role in enablingimproved standards of living and quality of life. Itprovides the basis for a variety of economic activitieswithin downstream industries including: textiles,plastics, agriculture, construction, oil and gasextraction, healthcare and electronics.



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Chemicals industry

contr ibut ion to GDPof GCC

GCC (Gulf Cooperation Council)comprised of Bahrain, Kuwait,Oman, Qatar, Saudi Arabia, andthe United Arab Emirates continuesto play a vital role in the global andregional economy. GCC economiesare the largest in the MENA region.Growth in the GCC remains robust

supported by the combinationof historically high oil prices,expanded oil production and lowinterest rates. Fiscal and external moderate and prospects for growthremain positive.

However, GCC economies areheavily dependent on hydrocarbonextraction which accounts for48.1% of the GDP. For example,Saudi Arabia is the largest oilexporter in the world and is at

present the only producer with be used to stabilize global energymarkets. GCC region accountedfor 2.1% of worlds GDP at currentprices.

The manufacturing sector whichincludes the petrochemicals andchemicals sector represented9.3% of regions GDP in 2012.The value added contribution ofthe manufacturing sector in 2012is estimated at $US143.6 billion.

Out of this petrochemicals andchemicals represented 31% or$US45.2 billion in value addition tothe economy.

GCC: GPD (current prices) by main economic activities, 2012

Source:National Statistical Authorities, GPCA Analysis, 2013


Transport, Storage& Communication

Finance Insurance, Real Estate& Business Services5.5% 11.1%

Agriculture, Forestry& Fishing

1.1%

Refining Sector2.3%

Petrochemicals & Chemicals2.9%Other Manufacturing4.1%

Manufacturing9.3%

Others11.2%Wholesale & Retail Trade,

Restaurants and Hotels8.5%

Crude Petroleum& Natural Gas

48.0%

Construction 5.3%

GCC: Manufacturing GDP (current prices) by Sub-Sectors, 2008-2012


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012

ContributiontoManufactuiring(%)

Other manufacturing Petrochemicals and chemicals Refining Sector

24.9% 22.7% 25.9% 23.8% 24.2%

26.4%23.8%

25.5% 30.2% 31.3%

48.6% 53.5% 48.6% 46.0% 44.5%



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Saudi Arabia has been one of thebest performing economies in therecent years, with the average rateof real GDP growth during 2008-2012 third highest behind Chinaand India. In 2012 Saudi Arabiaseconomy continued to performwell with real GDP growth of 5.1%,

down from 8.6% in 2011. In 2012,Saudi Arabias GDP is estimatedat $US 711 billion. The WorldBank ranks Saudi Arabia as the19th largest economy in the world,representing 1% of worlds GDP.

The manufacturing sector whichincludes the petrochemicals andchemicals sector accounted for10.1% of Saudi Arabias real GDPin 2012. The value added of themanufacturing sector in 2012 isestimated at $US71.6 billion. Out

of this the petrochemicals andchemicals sector represents 37.6%in 2012 or $US26.9 billion in valueaddition to the economy.

Saudi Arabia: GPD (current prices) by main economic activities, 2012

Saudi Arabia: Manufacturing GDP (current prices) by Sub-Sectors,2008 - 2012



Finance Insurance, Real Estate& Business Services4.7%

8.0%


1.9%

Refining Sector2.6%Petrochemicals & Chemicals3.8%

Other Manufacturing3.7%

Manufacturing10.1%

Others15.8%

Wholesale & Retail Trade,Restaurants and Hotels

8.2%


46.9%

Construction 4.4%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



26.3% 26.8% 29.2% 25.5% 26.1%

39.0%32.3% 31.7% 34.7% 37.6%

34.8%40.9% 39.1% 39.8% 36.3%

Chemicals industry

contr ibut ion to GDPof Saudi Arabia


2012 value addof Saudi Arabiaschemicals sector toeconomy is estimated

at $US26.9 billion.



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Transport, Storage& Communication Finance Insurance, Real Estate

& Business Services

8.0% 17.4%


0.7%



Manufacturing9.0%

Others3.2%


12.6%


40.2%

Construction 8.9%

In 2012, the economic recovery inthe UAE continued to strengthenthe countrys economy. Economicgrowth based on real GDP hasreached 4.4% year-on-year in2012, an increase from 3.9% in2011. In 2012 the GDP of the UAE(at current prices) was $US 384

billion. The World Bank ranks theUAE as the 32nd largest economyin the world accounting for 0.5%of global GDP at current prices.Within the GCC region, UAEs GDPper capita is third highest afterQatar and Kuwait.

In 2012 the manufacturing sectorof the UAE grew by 11.7% incomparison with the previous yearand contributed 9% to GDP atcurrent prices. Value addition ofthe manufacturing sector in 2012 is

estimated at $US34.4 billion. Thecontribution of the petrochemicalsand chemicals sector is 19.7% or$US6.7 billion in value addition tothe economy.

United Arab Emirates: GPD (current prices) by main economicactivities, 2012

United Arab Emirates: Manufacturing GDP (current prices) bySub-Sectors, 2008 - 2012



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



9.8% 8.9% 9.2% 10.1% 10.1%

15.8%12.0% 16.2%

20.2% 19.7%

74.4%79.1%

74.6% 69.7% 70.2%


Chemicals industry

contr ibut ion to GDPof the UAE

2012 value add ofUAEs chemicalssector to economy isestimated at $US6.7

billion



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Qatar is worlds fastest growingeconomy with real GDP growthof 12% between 2008 and 2012.2012 was a year of stabilizationwith real GDP growing by 6.2%.Non-hydrocarbon sector was a keycontributor to this growth whichgrew by 10% in 2012. This is in

line with the National DevelopmentStrategy which revolves around in the non-hydrocarbon sectors:manufacturing, construction,transport and communications,trade and hotels, and servicessectors. The GDP of Qatar atcurrent prices was $US 192 billion.As per the World Bank ranking,Qatar is the 53rd largest economyin the world and accounted for0.2% of global GDP at currentprices. Qatar has the highest GDP

per capita among other GCC statesand the 4th highest globally.

The manufacturing sector, including represented 9.9% of Qatarsnominal GDP in 2012. Thevalue added contribution of themanufacturing sector to economyin 2012 is estimated at $US18.2billion, out of which the chemicalssector represented 35.5% or$US6.7 billion

Qatar: GPD (current prices) by main economic activities, 2012

Qatar: Manufacturing GDP (current prices) by Sub-Sectors,2008 - 2012


28.2%

13.6%

32.2%26.7% 26.7%

19.6%

17.7%

19.8% 37.0% 35.5%

52.2%

68.7%

48.1%36.4% 37.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



Chemicals industry

contr ibut ion to GDPof Qatar



Finance Insurance, Real Estate& Business Services

3.3%

10.2%


0.1%



Manufacturing

9.9%

Others8.7%


5.6%


57.8%

Construction 4.4%

Qatar is worlds fastestgrowing economy withreal GDP growth of12% between 2008and 2012.



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In 2012 economic growth in Kuwaitwas maintained at 6.2% largely dueto the oil sector where productionand prices remained high. In 2012Kuwaits oil sector grew by 10%,while non-oil sector growth was4%. Kuwaits GDP at currentprices in 2012 reached $US166.7

billion and the GDP per capita issecond highest in the GCC regionafter Qatar and top 15th on a globallevel.

Constituting approximately 4.6%of GDP at current prices, themanufacturing sector in Kuwait is of the Kuwait Development Plan.Kuwaits economic growth isexpected to increase the demandfor manufactured products.The total size of value added of

manufacturing sector in 2012 isestimated at $US7.7 billion. Thechemicals sector represented 10%of manufacturing value add in 2012or $US0.77 billion.

Kuwait: GPD (current prices) by main economic activities, 2012

Kuwait: Manufacturing GDP (current prices) by Sub-Sectors,2008 - 2012



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



47.8% 51.9% 56.6% 57.2% 54.4%

18.4% 12.0% 10.4% 10.6% 10.1%

33.8% 36.1% 32.9% 32.2% 35.5%

Chemicals industry

contr ibut ion to GDPof Kuwai t



5.7%

10.0%


0.2%



Manufacturing4.6%

Others12.0%


1.7%


62.1%

Construction 3.7%

2012 value added ofKuwaits chemicalssector represented10% of manufacturing

total.



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Omans economy continuedto grow in 2012 supported byincreased oil production andhigh oil prices. Overall, the IMFprojected real GDP growth to havereached 5% in 2012, up from 4.5%in 2011. The non-oil sector grew by5.8% in 2012, supported by public

investment, and increased activityin services sector.

The manufacturing sector in Omanhas demonstrated promisinggrowth over the past decades. Itis the second largest sector afteroil & gas and accounts for 10.1%of GDP at current prices. Heavy chemicals represent the majority ofthe manufacturing value addition.In 2012, total value added of themanufacturing sector is estimated

at $US7.7 billion out of which thepetrochemicals and chemicalssectors contribution was $US3.5billion.

Oman: GPD (current prices) by main economic activities, 2012

Oman: Manufacturing GDP (current prices) by Sub-Sectors,2008 - 2012



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



45.6%

31.5% 31.8% 29.2% 32.0%

8.6%23.5%

34.9% 44.6% 45.3%

45.8% 45.0%33.2%

26.2% 22.7%

Chemicals industry

contr ibut ion to GDPof Oman



5.0%

7.6%


1.1%



Manufacturing

10.1%

Others11.1%


8.1%


52.2%

Construction 4.8%

The manufacturingsector in Omanhas demonstratedpromising growth overthe past decades.



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In 2012, real GDP growth inBahrain was 4.8%. This is morethan twice the 2011 level of2.1%. The hydrocarbon sectorsuffered a contraction in 2012which was offset by the growth inmanufacturing and governmentservices. Growth in the hospitality

sector was the fastest in 2012 as arebound from 2011.

The manufacturing sector isdominated by energy-intensiveindustries such as aluminum, in 2012 contributed 15% of GDPat current prices. At current prices,the chemicals industry accountedfor 11.1% of the manufacturingsectors GDP in 2012. Value addedof the manufacturing sector in2012 is estimated at $US4 billion,

out of which the contribution of thechemicals sector is estimated at$US0.4 billion.

Bahrain: GPD (current prices) by main economic activities, 2012

Bahrain: Manufacturing GDP (current prices) by Sub-Sectors,2008 - 2012



0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012



28.9%22.9% 22.8% 23.3% 23.3%

17.0%

14.7% 13.4% 13.0% 11.1%

54.1%62.5% 63.8% 63.7% 65.6%


Chemicals industry

contr ibut ion to GDPof Bahrain

Transport, Storage& Communication6.4%


26.0%


0.3%

Refining Sector3.5%Petrochemicals & Chemicals

1.7%Other Manufacturing9.9%

Manufacturing15.0%

Others14.1%


6.3%


25.2%Construction 6.1%

Manufacturing sectorscontribution to theGDP of 15% in Bahrainis highest among otherGCC countries.



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Traditionally, the manufacturing sector in the GCChas been viewed as integral part of economic infrastructure and resources were the factors drivingindustrial growth in the region. Regional oil & gas chemicals industry. These two sectors representmore than half of the total manufacturing output whichwas estimated at $US404.1 billion in 2012. Due toproduction capacity expansions and surging prices, the

is the second largest manufacturing sector in theregion and in 2012 represented approximately 24% of

GCC Manufacturing Output by Industry, $US billion

Note:2011 and 2012 are preliminarySource:UNIDO, Statistical Authorities, GPCA Estimates, 2013

87.0 71.6 89.5108.0 114.0

52.148.1

64.1

93.9 97.427.524.6

27.2

26.533.4

20.622.0

23.8

25.827.8

17.715.7

18.4

18.3

22.0

77.6

67.0

81.5

96.0

109.5

282.6

249.2

304.5

368.5404.1

0

50

100

150

200

250

300

350

400

450

2008 2009 2010 2011 2012

Valueofoutput($U

SBillion)

Refining Chemicals Non-metallic mineral products

Food products & beverages Basic Metals Others

CAGR (2008-2012)

9.4%

Contr ibut ion of

chemicals industry tomanufactur ing output

the regions manufacturing output. Between 2008 and2012 chemicals output grew at an average of 16.9%per annum, higher than in any other sector. As a result,the share of chemicals industry in total manufacturingoutput has increased from 18% in 2008 to 24% in2012.

Chemicals sector is the second

largest manufacturing sectorin the GCC.



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Industr ies dependent

upon chemicalsindustry


Chemicals products are an integral part of variousindustries. Looking downstream, the economydepends upon chemicals industry at four levels:1. Actual production of chemicals;2. Industries manufacturing industrial products that

purchase chemicals and use them to make theseproducts that are the raw materials or intermediateinputs for other industries;

3. Industries manufacturing consumer products and or buy industrial parts and components based onchemistry;

4. Wholesale, retail and service industries based onchemistry-derived products

Source: American Chemistry Council

Almost every industry procure products or services thatoriginate from the chemicals industry. An example isthe GCC oil & gas production sector accounts for 48%of the regional GDP and uses a variety of chemicalsin the oil production process. The main chemicalsused in the oil & gas sector are drilling and wellchemicals, production chemicals, injection chemicals,pipeline chemicals, gas treatment chemicals and utilitychemicals. Chemicals consumption by GCC oil & gasproduction and mining is estimated at $US22.5 bn.

Value of chemical inputs supplied to GCC industries 2012, $US million

Note:Includes chemicals inputs of imported and locally produced chemicals. GCC chemicals sales by industry are estimated based on thechemicals consumption by industries and their relative value added for economies with available data. Source:GPCA Estimates, 2013

18

75

76

87

199

301

303

479

502

691

741

781

1'216

1'362

2'051

3'232

3'304

3'707

3'886

4'305

9'229

22'529

Medical, Precision & optical instruments

Other transport equipment

Motor Vehicles

Furniture Manufacturing

Publishing & printing

Textiles

Wood Products Manufacturing

Paper & paper products Manufacturing

Food products & beverages Manufacturing

Machinery & Equipment Manufacturing

Electrical Machinery Manufacturing

Wearing Apparel Manufacturing

Non-metallic mineral products

Coke & Refined Petroleum

Construction

Rubber & Plastic Products Manufacturing

Electricity and Water

Basic metals Manufacturing

Agriculture, Forestry & Fishing

Real Estate & Business Services

Wholesale & Retail Trade, Restaurants and Hotels

Crude Petroleum, Natural Gas, Mining

Most manufactured goods are directly touched bychemistry. Within GCC manufacturing, the largestusers of chemicals are rubber & plastic products manufacturing, non-metallic mineral products. Inaddition to the chemicals sales to be used as rawmaterials in rubber and plastics production such assynthetic rubber and of basic chemicals such aschlorine, caustic soda, and titanium dioxide, there arenumber of specialty chemicals used in the production.Rubber processing chemicals are functional chemicalsare used to facilitate processing or to improve the

accelerators, activators, anti-ozonants, antioxidants,stabilizers, and vulcanizing agents, among others.Plastic additives include chemicals that are added toplastic resin to facilitate processing of plastic resin products. Some of them are antioxidants, antistatic heat and other stabilizers, lubricants, plasticizers,reinforcing agents and UV absorbers.With no natural drinking water sources, watertreatment is an important area for the region. Watermanagement chemicals used include biocides, and corrosion inhibitors.



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Share of Chemic als

in non-o i l export s onregiona l and nat ionallevels

GCC exports is still highly dependent on thehydrocarbon sector which accounts for more than80% of export value. Globally the hydrocarbon sectoraccounts for approximately 68% of export value.GCC non-oil export grew by an average 20% perannum between 2001 and 2012. Qatar registered thehighest growth of 24% per annum during the sameperiod, followed by the UAE and Saudi Arabia wherenon-oil export grew by 21.4% and 20.6% per annumrespectively. As a result the share of non-oil export inthe total export of goods has increased from 15% in

2001 to 18% in 2012.

Examination of GCC non-oil export in 2012 showsalmost half or 47% of total non-oil export value wasgenerated from chemicals sector. Dependency ofnon-oil exports on energy intensive industries such aschemicals is different among GCC states. The highestdependency has been observed in Qatar wherechemicals accounted for 68% of non-oil export in 2012.In Saudi Arabia, the largest chemicals productioncountry within the GCC, chemicals accounted for 63%of total non-oil export in 2012. Similarly, the share ofchemicals in non-oil export of Kuwait remains high

at 56%. In the rest of the GCC countries, chemicalsaccount for less than a half of non-oil export. Non-oil accounted for only 12% of the non-oil export.

GCC Non-Oil Export in 2012


12%

22%

41%

56%

63%

68%

88%

78%

59%

44%

37%

32%

UAE

Bahrain

Oman

Kuwait

Saudi Arabia

Qatar

$US 112.6billion

47%53%

Petrochemicals & Chemicals Other non-oil exports



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GCC ProductionCapac ity by

Product (2008-2012)

4.



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Int roduct ion

The chemical industry is divided into a number of broad segments. GCC chemicals production can be describedby the following table:

Chemicals (excluding Pharmaceuticals) Product Segments

Source:

Petrochemicals

Basic ChemicalsConsumer Chemicals

Fine Chemicals

Intermediates

Fertilizers

Specialty Chemicals

Inorganic Chemicals

Basic Inorganics

Industrial Gases Polymers

4. GCC Production Capacity by Product (2008-2012)



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Petrochemicals

Basic Chemicals Includes 7 major bulk (commodity) building blocks: Ethylene, Propylene, Methanol,Aromatics (benzene, toluene and xylenes)

IntermediateChemicals

Represent next step of chemical conversion of basic petrochemicals and are used in

Fine Chemicals

Polymers

Basic Inorganics

Fertilizers Various combinations of nitrogen, phosphorous, potassium

Industrial GasesIncludes oxygen, nitrogen, argon, carbon dioxide and hydrogen. Industrial gases are widelyused in the manufacturing processes with major industries including steel, chemicalsproduction, electronics and health care

Inorganic chemicalsChemicals derived from metal and non-metallic minerals and dont contain carbon asprinciple element

Specialty Chemicals

AdhesivesChemicals used to bond two surfaces together and are mostly supplied to automotive,construction, packaging sectors

CatalystsSpecialty chemicals that affect the speed of chemical reaction. They are mostly supplied to

Coatings

Materials applied to protect or decorate surfaces and are mostly supplied to automotive,

transportation, construction, packaging and other industrial sectors

Cosmetic AdditivesFunctional chemicals and are used to improve performance of cosmetic and personal careproducts

Crop Protection Products that help control plants from harmful insects, diseases and other related products

Dyes and Pigments Organic and inorganic chemicals used to impart color into other materials

Industrial AdditivesFunctional chemicals added to aid or facilitate industrial processes and enhance properties

Lubricant Additives Functional chemicals added to lubricating oils to impart special properties

Paints and Inks Colored, liquid dispersions of dyes or pigments used to impart text and design

Other Specialties A number of other specialty chemicals exist

Consumer Chemicals

Consumer ChemicalsChemicals sold directly to consumers and include chemicals products such as soaps anddetergents, cosmetics

GCC chemicals industry has been mostly concentrated around production of Petrochemicals, Polymers andBasic Inorganics (Fertilizers and Inorganic Chemicals). They account for about 90% of the total chemicalsproduction in the region.




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GCC Capacity

breakdown byproduct segment

Current production of GPCA member companies canbe grouped into the following product segments andsub-segments:

Petrochemicals including: basic petrochemicals intermediates

polymers Basic Inorganics including: fertilizers inorganic chemicals

Specialty Chemicals

I Petrochemicals Segment:Basic petrochemicals or commodity chemicals areproduced in large quantities. They are the basicbuilding blocks derived from hydrocarbon feedstockand are used to produce other chemical products. In2012, GCC basic petrochemicals capacity reached44.1 million tons per annum which accounts for

34.1% of the regional chemicals capacity. Between2008 and 2012, regional producers have expandedtheir basic petrochemical production capacities by anaverage rate of 13.2% per annum. This is higher thanthe overall chemicals capacity growth of 12.2% perannum.

Petrochemical intermediates represent the next stepin the chemical conversion of bulk petrochemicals andare used in downstream derivatives such as plastic GCC capacity of intermediates has reached 12.6million tons in 2012, representing 9.8% of the totalcapacity in the region.

chemicals which are derived from bulk petrochemicals,intermediates and other carbon sources. The is 14.8 million tons which represents 11.4% of theregional chemicals capacity.


GCC polymers production is concentrated aroundcommodity thermoplastics. Over the past 5 yearspolymers industry in the GCC has seen a remarkablegrowth of CAGR 17% reaching 23.8 million tons in2012. After basic petrochemicals and fertilizers, thepolymers segment is the third largest in the GCCchemicals industry representing 18.4% of regions totalproduction capacity.

I Basic Inorganics Segment:

Fertilizers are various combinations of nitrogen,phosphorous and potassium. The major end-usersof fertilizers are in the agriculture sector. Fertilizerproduction in the GCC is the second largest productsub-segment representing 23.3% of the total regionalcapacity or 30.1 million tons per annum. Over the past5 years GCC fertilizers production capacity grew by anaverage 13.7% per annum.

Inorganic chemicals are derived from metal andnon-metal minerals and do not contain carbon as

a principle element. In 2012 the GCC productioncapacity of inorganic chemicals reached 3.5 milliontons per annum which represents 2.7% of the totalcapacity.

I Specialty Chemicals Segment:

GCC production capacity for specialty chemicals isstill in the early stages of development. Specialtychemicals are produced in relatively small quantitiesand have specialist end-use applications. They arederived from petrochemical intermediates and otherindustrial chemicals. As of 2012, the GCC capacity ofGPCA members was estimated at 0.24 million tons

which is 0.2% of the regional chemicals capacity.



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GCC Chemicals Production Capacity by Product Segment

GCC Chemicals Capacity by Product Segment 2012Total: 129.2 million tons

Source:Gulf Petrochemicals and Chemicals Association (GPCA), 2013


26.9 32.641.1 42.2 44.1

9.511.0

11.4 12.5 12.611.5

13.0

14.4 14.814.8

12.7

17.6

20.6 21.323.8

18.0

19.4

20.027.3

30.1

2.8

2.9

3.0

3.5

0.2

0.2

0.2

0.30.3

81.6

96.7

110.7121.8

129.2

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012

MillionTons

3.5

CAGR (2008-2012)

12.2%

Basic

Inorganics

Petrochemicals

Polymers 18.4%

Fertilizers23.3%

Inorganic chemicals2.7%

Specialty Chemicals0.2%

Fine Chemicals 11.4%

Petrochemicals73.7

%

Intermediates 9.8%

Basics 34.1%

BasicInorganics26.0

%




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GCC Capacity

breakdown byvalue chain

A wide range of chemicals products are the result ofthe processing of organic and inorganic raw materials.The majority of chemicals products in the GCC useorganic inputs such as oil and natural gas, whichcontain hydrocarbons. Organic chemicals in the GCCare represented by Methane (C1), Ethylene (C2),Propylene (C3), Butadiene (C4) and Aromatics valuechains.

Chemical products based on the ethylene (C2) valuechain represent the majority of the regional outputand accounted for 38.6% of the total GCC Capacityin 2012. This is equivalent to 49.9 million tons ofproduction capacity as of end of 2012. Currently theethylene value chain in the GCC is represented by

more than 60 different chemicals which aid variousindustries which include food packaging, housewares,automotive, insulations and other.

comprised of methane (C1) based chemicals whichaccounted for 32.2% of the total GCC capacity in2012 or 41.6 million tons per annum. There areapproximately 50 different chemicals within themethane value chain produced in the GCC. Thisproduct group supplies products to the buildingmaterials, plastics and agriculture industries.

GCC Chemicals Capacity by Value Chain


30.0 32.0 34.238.8 41.6

32.239.0

45.847.3

49.97.1

11.8

14.414.7

15.5

8.4

9.8

12.013.3

14.5

3.4

3.5

3.67.0

7.0

0.5

0.6

0.7

0.70.7

81.6

96.7

110.7121.8

129.2

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012

Million

Tons

CAGR (2008-2012)

12.2%

C1 Methane C2 Ethylene C3 Propylene

Aromatics Inorganics C4 Butadiene


GCC capacity to produce propylene (C3) basedproducts reached 15.5 million tons in 2012 whichaccounted for 12% of regions total. With a lowcapacity base in the region, there are approximately45 propylene based products currently produced inthe GCC. Propylene based products serve as a basisfor products used in many downstream industriesincluding automotive, telecommunications, printingand coatings. Over the past 5 years the productionof propylene (C3) based chemicals has seen anexpansion of CAGR 21.7% which the highest whencompared to other product groups.

Similarly to propylene (C3) based chemicals, thearomatics value chain represented a minor share of

the total regional capacity in 2012, accounting for11.2%. With approximately 55 different chemicalsproduced from benzene, mixed xylenes and toluene,this group supplies a variety of industries frompackaging to apparel, pharmaceuticals and spareparts. Similarly to the propylene (C3) value chain, the chemicals currently produced when compared to theethylene (C1) and methane (C2) groups.

Inorganic chemicals accounted for 5.5% of the totalcapacity in the region in 2012. There are more than30 inorganic chemicals currently produced in the GCC.The inorganic products segment has been expandingat an average 20.3% per annum over the past 5 years.



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Basic Petrochemi cals

capacity breakdownby product

Basic petrochemicals are comprised of bulk(commodity) chemicals produced in large quantitiesand are used to produce other chemicals andspecialties. Due to petrochemicals capacityexpansions in the region and availability of naturalgas feedstock, GCC capacity of basic petrochemicalshas been expanding at the compound annual growthrate of 13.2% between 2008 and 2012. In 2012 totalcapacity has reached 44.1 million tons per annum.More than 90% of all organic downstream chemicalsare derived from 7 major bulk (commodity) chemicals.

Ethylene traditionally has been the main basicpetrochemical produced in the GCC. In 2012, ethylene

represented the majority or 49.2% of the regions totalbasic petrochemicals capacity. In the GCC, ethylene ismainly used to produce polyethylene (PE) with othermajor users being ethylene oxide (EO), ethylene glycol(EG) and polyvinyl chloride (PVC).

Methanol is the second largest commoditypetrochemical produced in the region which accountedfor 21.2% of the total basic petrochemicals capacityin 2012 or 9.3 million tons. Between 2008 and 2012

GCC Basic Petrochemicals Capacity by Product


12.715.0

19.8 20.5 21.7

8.08.2

9.3 9.49.3

3.5

5.7

6.4 6.77.2

2.2

2.3

3.1 3.13.1

0.4

1.2

2.2 2.22.5

0.1

0.1

0.30.3

0.3

26.9

32.6

41.1 42.2 44.1

0

5

10

15

20

25

30

35

40

45

2008 2009 2010 2011 2012

MillionTons

CAGR (2008-2012)

13.2%

methanol capacity expansion of 3.9% per annum wasthe lowest among other commodity chemicals in theGCC. This is due to the fact that the majority of GCCmethanol is being exported.

Production capacity of propylene reached 7.2 milliontons in 2012 which represents 16.2% commoditychemicals total. Propylene is mainly used to producepolypropylene (PP), while other users includeproducers of acrylonitrile (ACN), propylene oxide (PO)and cumene and acrylic acid.

The Aromatics (benzene, toluene and xylenes)accounted for 13.1% of regions capacity to produce

commodity chemicals in 2012. Benzene is the largestaromatics produced in the GCC with productioncapacity reaching 3 million tons in 2012. In the GCC,benzene is used mainly to produce styrene monomer. production capacity of xylenes and by 2012 regionalxylenes capacity has reached 2.5 million tons.



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Fert i l izer s capacity

breakdown by product

Fertilizers represent various combinations ofthree basic elements (nitrogen, phosphorous andpotassium). Fertilizer industry insures that agriculturalbusiness have nutrients they need to grow crops tomeet worlds requirements for food and energy. GCCfertilizers production is mostly represented by nitrogenproduction with ammonia and urea accounting for88% of the total GCC fertilizers capacity in 2012 or26.6 million tons. Most of the ammonia is utilized tomanufacture urea and which is the most importantnitrogen-based fertilizer. In 2012 GCC ammoniaproduction capacity was 11.3 million tons, growingby an average 10.6% between 2008 and 2012. GCCurea capacity in 2012 has crossed 15 million tons per

annum and accounts for 50.7% of the total fertilizerproduction capacity in the region.

(DAP) production commenced from 2011 andrepresents 10.8% of the regional capacity. As aPhosphorus fertilizer DAP is manufactured frommineral deposits occurring in the nature.

GCC Fertilizers Production Capacity by Product

Note:Based on nameplate capacitySource:Gulf Petrochemicals and Chemicals Association (GPCA), 2013

9.9 10.5 11.112.5

15.3

7.68.3 8.3

11.4

11.3

0.50.5 0.5

3.4

3.4

18.0 19.4 20.0

27.3

CAGR (2008-2012)

13.7% 30.1

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012

Urea Ammonia Diammonium phosphate (DAP)


Fertilizers main purpose is to provide essentialnutrients needed by the crops to the soil. As themajority of GCC fertilizers production is concentratedaround production of single nutrient fertilizers suchas ammonia and urea, nitrogen is the main nutrientprovided by the GCC. As of 2012, nutrient providedby the fertilizers produced in the GCC was equal to8.4 million tons of nitrogen nutrients. This is about8% of the worlds total nitrogen consumption which isestimated at 104-105 million tons per annum (source:IFA).

GCC fertilizers production is mostlyrepresented by nitrogen productionwith ammonia and urea accountingfor 88%.



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Fert i l izer s Nutr ients

Product ion

GCC Fertilizers Nutrients Production

Note:Nutrients productions is calculated based on production excluding captive consumption Source:Gulf Petrochemicals and Chemicals Association (GPCA), 2013

0.1

5.8 5.8

7.3

8.4

6.2

0.10.1

0.2

0.8

5.9 5.9 6.3

7.6

9.2

0

1

2

3

4

5

6

7

8

9

10

2008 2009 2010 2011 2012

Nutrien

tsMillionTons

Nitrogen Phosphorus pentoxide (P2O5)

CAGR (2008-2012)

11.8%


Fertilizer industry insures thatagricultural business have nutrientsthey need to grow crops to meetworlds requirements for food andenergy.



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Polymers capacity

breakdown by product

Polymers are compounds derived from one or more

petrochemical monomers like ethylene, styrene,propylene and include commodity thermoplastics,engineering resins and thermoplastic elastomers.Between 2008 and 2012, GCC polymers productioncapacity expanded by an average 17% per annum,which is highest among other chemical productsegments. Among the numerous numbers of plastics the 5 largest volume commodity thermoplastics are:Polyethylene (LDPE, LLDPE, HDPE), Polypropylene(PP), Polyvinylchloride (PVS), Polystyrene (PS andEPS) and Terephthalate (PET). These productsdominate GCC polymers production.

Polyethylene (LDPE/ LLDPE / HDPE) accountedfor 55.3% of GCC polymers production capacity in2012 or 13.2 million tons per annum. High densitypolyethylene (HDPE) is a major polyethylene producedin the GCC and accounted for 30% of 2012 polymersproduction capacity. In volume terms, regional capacity

GCC Polymers Capacity by Product, Million Tons


3.6 4.75.7 6.0

7.13.2

4.24.3 4.3

4.3

1.0

1.4 1.41.4

1.7

3.4

5.7

7.6 7.68.0

0.9

0.9

0.9 0.9

1.4

0.7

0.7

0.7 1.0

1.3

12.7

17.6

20.6 21.3

23.8

0

5

10

15

20

25

2008 2009 2010 2011 2012

MillionTons

CAGR (2008-2012)

17%

Petrochemica

ls


of HDPE in 2012 reached 7.1 million tons. In 2012

alone GCC producers have added around 1 milliontons of HDPE capacity which represents 18.8% year-on-year growth. Major users of HDPE are producersof blow-moulded products such as bottles, packagingcontainers, drums, car fuel tanks, toys and householdgoods; producers of injection-moulded products suchas crates, pallets, packaging containers, house waresand toys.

With production capacity of 4.3 million tons at the endof 2012, linear low density polyethylene (LLDPE) isthe second largest polyethylene resin produced in theGCC. LLDPE accounted for 18.1% of GCC polymersproduction capacity in 2012. Over the past few years

LLDPE in the GCC, hence, its production capacitybetween 2008 and 2012 was 8.1% per annum, thelowest among other polymers. LLDPE is mostly used LLDPE include injection-moulding products and wireand cable applications.



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GCC Polymers Capacity 2012Total 23.8 million tons


PET .7

PC1.1%

Polyester Fiber

EPS

0.6%

0.1%PVC .7%

PS 1.1%

PP 3.7%

HDPE0.0%

LLDPE1 .1%

LDPE7.2%

Polythelene55.3

%


GCC production of low density polyethylene (LDPE)

has been lower than production other polyethylenegrades. In 2012, LDPE production capacity reached1.7 million tons growing by an average 14% perannum between 2008 and 2012. LDPE Capacityexpansions continues at a higher rate and in 2012alone the capacity growth rate was 21% year-on-yeargrowth. Packing industry is the mail user of low densitypolyethylene (LDPE).

With production capacity of 8 million tons per annum,

polypropylene (PP) is the second largest polymerin the GCC and accounts for 34% of the total. PPcapacity expansion over the past 5 years is one ofthe highest among other polymers in the region.With average annual growth rate of CAGR 23.6%between 2008 and 2012, polypropylene production hasexpanded from 3.4 million tons per annum in 2008 to 8million tons per annum in 2012.

GCC polymers production capacityexpanded by an average 17% perannum between 2008 and 2012,highest among other chemicalproduct segments.



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Top 10 majo r product s

produced by the GCCchemicals industry

GCC chemicals and petrochemicals production isrepresented by 78 different chemicals (not includingvarious product grades). Among them 10 productsrepresent the majority of the production capacity. In2012 they accounted for 73% of regions total.

Notably, three basic petrochemicals, namely ethylene,methanol and propylene accounted for 30% ofthe regional chemicals capacity in 2012. Ethyleneproduction capacity in the GCC is the largest amongother product and accounted for 17% of regions total.The majority of ethylene is utilized captively to produce

other value-add chemicals. Methanol and propyleneaccounted for 7% and 6% respectively. Most of thepropylene production is consumed regionally toproduce polypropylene.

Fertilizer product urea is the second largest productin the GCC accounting for 12% of the regions totalchemicals capacity in 2012 followed closely byammonia which account for 9%. While ammoniaproduction is one of the largest in the region, themajority of ammonia is consumed captively to produceurea.

Share of Top 10 chemical products in total capacity 2012


Others 27%

MTBE 3%

LLDPE 3%MEG 4%

HDPE 6%

Ethylene17%

Urea12%

Ammonia9%

Methanol

PP

7%6%

Propylene6%

129.2million tons


Polymer products, polyethylene (HDPE andLLDPE) and polypropylene are also among top 10products. HDPE and polypropylene each accountedfor 6% of GCCs chemicals capacity in 2012 andLDPE accounted for 3%. While there is a regionalconsumption of polymers in the region, the GCCpolymer industry is by in large export oriented.

2012 was 3% and 4% in the regions total chemicalscapacity.

73% of regions chemicals capacityis represented by 10 products.



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Overview of global

ethylene product ion

Ethylene is one of the main basic petrochemicals andis used to produce polyethylene (PE), ethylene oxide(EO), ethylene glycol (EG), polyvinyl chloride (PVC)and polystyrene (PS) and various intermediates suchas ethyl acetate.. In 2012 world ethylene capacityreached 150.9 million tons per annum representinga growth of 4% per annum since 2008. Asia is thelargest ethylene producer in the world accounting for36% of worlds total. Ethylene capacity growth in Asiabetween 2008 and 2012 was 8.7% per annum andis one of the highest in the world and higher than theworlds total growth of 4%.

Global Ethylene Production Capacity by Region (2008-2012)

Source:Mitsubishi Chemical Techo-Research Corporation (MCTR), ICIS, GPCA

GCC 14.4%

Latin America 4.7%

Africa1.2%

Europe 21.3%

North America22.0%

China13.1%

Asia (Excl China)22.9%

Others0.3%

GCC 11.6%

Latin America 5.3%

Africa1.4%

Europe 24.6%

North America26.5%

China8.1%


Others0.4%

2008

129.0million tons

2012

150.9million tons


In 2012, GCC ethylene capacity was 21.7 million tonsper annum which accounts for 14.4% of worlds total.It grew by an average 9.7% per annum in comparisonwith worldwide growth of 4%. As a result, GCC sharein the worlds ethylene capacity has increased from11.6% in 2008 to 14.4% in 2012.

GCC Ethylene production capacityaccounts for 14.4% of worlds total



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Global Urea Production Capacity by Region (2009-2012)

Source:International Fertilizer Association (IFA) Production and International Trade, September 2013

GCC 6.0%

North America 6.2%

Latin America 3.4%Africa 3.7%

Europe 13.7%

Asia66.7%

Others0.3%

GCC 7.9%

North America 5.8%

Latin America 3.4%Africa 3.5%

Europe 14.3%

Asia64.9%

Others0.2%

2009175

million tons

2012193.7

million tons

Urea is the most widely used solid nitrogen fertilizerin the world. The agricultural sector is the main userof urea and accounts for more than 80% of total ureademand. World urea production capacity in 2012 wasestimated to be 193.7 million tons, up from 175 milliontons in 2009. The majority of these capacity additionstook place in Asia and the GCC. Between 2009 and2012, Asian countries added 9 million tons of ureacapacity while GCC added 4.8 million tons.

Asia is the largest urea producer in the world. Itsproduction capacity in 2012 is estimated to be 125.7million tons which represented 64.9% of worlds total.Due to urea capacity expansion in other regions,

share of Asia worldwide in urea production market hasdeclined from 66.7% in 2009.

Producers in Europe (comprised of Western, Centraland Eastern Europe) produced 27.7 million tonsof urea in 2012. This is 14.3% of worlds total ureacapacity. Between 2009 and 2012, Europes producersadded 3.6 million tons of urea capacity which resultedin compounded annual growth of 4.8% for that period.


In 2012 GCC producers manufactured 15.3 milliontons of urea which accounted for 7.9% of worldstotal. Thus making the GCC the third highest regionalproducer of urea. GCCs urea expansion growth rateof 13.3% per annum between 2009 and 2012 is thehighest in the world.North American urea producers did not have any 2012 North American urea production capacity wasestimated at 11.2 million tons, slightly higher than 10.9million tons in 2009.

Urea production capacity in Africa and Latin Americaare similar ( 6.7 million tons and 6.6 million tons in

2012 respectively) . There was a notable expansionof urea capacity in Latin America between 2009 and2012. Its growth of 3.7% between 2009 and 2012 wasone of the highest among other regions.

Overview of global

urea product i on



37/118


GCC 4.0%

North America 9.0%

Latin America 6.0%

Africa4.0%

Others1.0%

Europe 24.0%

Asia52.0%

GCC 5.0%

North America 8.0%

Latin America 6.0%

Africa3.0%

Others1.0%

Europe 23.0%

Asia54.0%

2009189.5

million tons

2012204

million tons


Overview of global

ammonia product ion

Global Ammonia Production Capacity by Region (2009-2012)

Source:International Fertilizer Association (IFA) Production and International Trade, September 2013

Today, virtually all nitrogenous fertilizers arederived from ammonia. Ammonia is produced fromhydrocarbon feedstock and is a key intermediate forfertilizer production such as urea, ammonium nitrates,ammonium phosphates and compounds. Ammonia isthe only viable source of nitrogen for producing largeamounts of protein. The nitrogen content of fertilizersimproves both the quantity and quality of protein-containing crops.

World ammonia production capacity reached 204million tons in 2012, representing an average growthof 2.5% per annum since 2009. Asia traditionallyhas been the largest ammonia producer in the worldaccounting for more than half of worlds ammonia

production capacity. In 2012, Asias capacity toproduce ammonia reached 109.3 million tons perannum which accounts for 54% of worlds total.

Europe (comprised of Western, Central and EasternEurope) is the second largest producer of ammoniarepresenting 23% of worlds total ammonia productioncapacity or 46.1 million tons. Over the past years therehave been no major ammonia capacity additions inEurope and therefore capacity growth between 2009and 2012 is modest at 0.6%.

The North American capacity for ammonia productionreached 16.2 million tons in 2012, which accounted for5% of worlds total. Similarly to Europe, over the past in North America. In 2009, North American ammoniacapacity was only slightly lower than 16.2 million tonswhich resulted in an average growth of 0.2%. This islowest growth among other regions.

Production capacity in Latin America in 2012 was11.5 million tons, an increase from 11 million tonsin 2009. While demand in Latin America has beenrapidly increasing due to the strong development ofthe agricultural sector, ammonia capacity expansionin this region continues at slower pace of than in other

regions. Between 2009 and 2012 it has registered agrowth of 1.5% per annum which is lower than worldsaverage growth of 2.5% p.a.

Slightly behind Latin America, GCC ammonia capacityin 2012 was 11.3 million tons which makes GCC5th largest among other regions. Rapid capacityexpansion in the GCC from 8.3 million tons in 2009to 11.3 million tons in 2012 has made ammoniaproduction in the region the fastest growing amongother parts of the world.



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Global Methanol Production Capacity by Region (2008-2012)

Source:Methanol Market Services Asia (MMSA), GPCA, 2013

Methanol is mainly used to make three derivatives:formaldehyde, methyl tertiary butyl ether (MTBE)and acetic acid. Other derivatives are dimethylterephthalate (DMT), methyl methacrylate (MMA),methylamines, chloromethanes and glycol ethers.Worldwide, there are around 90 methanol plants withcombined production capacity of 95.5 million tons,producing methanol from various feedstock naturalgas, coal, biomass and waste.. Asian producersaccount for more than a half of the worldwidemethanol production capacity. In 2012 they accountedfor 55% of 52 million tons per annum. China is thelargest methanol producer in Asia with more than 46million tons per annum.

Overview of global

methanol product ion

GPCA estimates that GCC methanol capacity of 9.3million tons represented 10% of worldwide methanolcapacity in 2012, down from 14% in 2008.While production capacity of methanol in the GCCcontinued to expand between 2008 and 2012 by anaverage 3.9% per annum, worldwide growth was12.8% per annum during the same period. Thisresulted in a reduced share of the GCC in worldwide

GCC 14.0%

North America 2.0%

Rest of the World Rest of the World15.0%

Africa 3.0%

Europe 7.0%

China32.0%


Central & Latin America22.0%

GCC 10.0%

North America 2.0%

12.0%

Africa 4.0%Europe 4.0%

China48.0%

Asia (Excl China)6.0%Central & Latin America

14.0%

2008

59

million tons

2012

95.5

million tons

While GCC methanol production

capacity continued to expandbetween 2008 and 2012 by anaverage 3.9% p.a, worldwide growthwas 12.8% p.a.



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Overview of global

polypropylene product ion

Global Polypropylene Production Capacity by Region (2008-2012)


Polypropylene (PP) is the second widely used polymerafter polypropylene (PE) with application industriesincluding packaging, domestic appliances, automotive,housewares, furniture, medical and industrial.

World production capacity of polypropylene in 2012is estimated to be 61.9 million tons with almost half(47%) of the capacity located in Asia. China is thesingle largest polypropylene producing country in Asia.Chinas 2012 PP capacity is estimated at 12.7 milliontons which represents 20.6% of the world total. .

Combined capacity of producers in the rest of Asiancountries (excluding China) reached 16.5 million tons

in 2012 which accounts for 26.6% of the world total.Strong polypropylene demand in China encouragedproducers to increase manufacturing capacity. As aresult PP capacity in China grew by an average 9.5%per annum between 2008 and 2012. A similar trendwas observed in other Asian countries, where PPproduction capacity has increased from 13.9 milliontons in 2008 to 16.5 million tons in 2012.

Polypropylene production in Europe has beentraditionally high. In 2012, PP production capacity inthis region was estimated at 11 million tons per annum

which represents 17.8% of the world total. There were and therefore its share has declined from 22.7% in2008 to 17.8% in 2012.

North Americas polypropylene capacity in 2012is estimated to be 8.7 million tons which accountsfor 14.1% of worlds total. Polypropylene capacityadditions in North America over the past years havebeen minimal. As a result the 2008-2012 annualcompounded growth was 1.5% per annum.

GCC region is slightly behind North America. In 2012GCC polypropylene capacity was 8 million tons which

accounted for 12.9% of the world total. The share ofGCC polypropylene sector has doubled since 2008when the region accounted for 6.6% of worlds totalPP production capacity. This was a result of extensivecapacity additions by GCC producers which haveadded more than 4.5 million tons of PP capacity since2008.

Latin America and Africa remain the minor producerswith 3 million tons and 1.1 million tons per annum ofPP production capacity respectively.

2008

51.6

million tons

2012

61.9

million tons

GCC 6.6%

North America 16.0%

Latin America 7.1%

Africa 1.9%

Europe 22.7%

China17.2%


Others1.4%

GCC 12.9%

North America 14.1%

Latin America 5.0%

Africa 1.8%

Europe 17.8%

China20.6%


Others1.2%



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Propylene is one of the basic petrochemicals andserves as a building block for a number of chemicalproducts. The majority of worlds propylene is usedto produce polypropylene (PP). Other consumers ofpropylene include producers of acrylonitrile, propyleneoxide, oxo alcohols and cumene. In 2012 worldwidepropylene capacity reached 101.6 million tons, upfrom 90.1 million tons in 2008. This represents a 6.8%annual compounded growth rate and is mostly drivenby capacity additions in Asia and the GCC.

Global Propylene Production Capacity by Region (2008-2012)



Overview of global

propylene product ion

Asia is the largest propylene producer with 44.7million ton per annum of installed capacity in 2012.This accounts for 44% of the worldwide capacityfor propylene. Driven by polypropylene capacityexpansion in Asia, propylene capacity has increasedfrom 34.4 million tons in 2008 to 44.7 million tons in2012.

GCC propylene production reached 7 million tons perannum in 2012 which accounts for 7% of worlds total.Production capacity growth in the GCC between 2008and 2012 was 19.7% per annum which is highestamong other regions.

GCC 3.9%

North America 27.4%

Europe 23.5%

China13.9%


Others0.4%

Africa1.5%

Latin America5.1%

GCC 7.0%

North America 20.7%

Europe 19.1%

China17.3%


Others4.0%

Africa1.6%Latin America 3.5%

200890.1million tons

2012101.6million tons

GCC propylene production reached7 MTPA in 2012 which accounts for7% of worlds total.



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High density polyethylene (HDPE) is the largest of the

three polyethylenes (PE) by volume of consumption.HDPEs properties give it higher strength comparedwith other polyethylene allowing a wide range ofuses. Major application of HDPE is blow-mouldingfor products such as bottles for milk and other non-carbonated drinks, drums, fuel tanks for automobiles,toys and household goods. Because HDPE hasgood chemical resistance, it is used for packagingmany household and industrial chemicals such asdetergents, bleach and acids.

In 2012, worldwide HDPE production capacity reached41.7 million tons, up from 34.4 million tons in 2008.This capacity increment has been largely driven byAsian producers The HDPE production capacity in

Asia reached 14.5 million tons in 2012 which accountsfor 34% of the total globally. Over the past few years,HDPE capacity in Asia has been growing by anaverage 40.1% per annum the highest among allother regions. China is the largest HDPE produceramong Asian countries and accounted for 12% ofworlds total or 5.2 million tons.

Global HDPE Production Capacity by Region (2008-2012)

Source:ICIS, GPCA, 2013



Overview of global

HDPE product ion

North America is the second largest producer of HDPE

globally. With production capacity of around 6.2 milliontons, North American producers account for 15% ofworlds total, down from 26% in 2008. Similarly, theshare of European producers has declined from 21%in 2008 to 12% in 2012.

The combined capacity of HDPE producers in theGCC in 2012 is about 7.1 million tons. This accountsfor 17% of worlds total. Since 2008, GCC HDPEproduction capacity has grown by an average 26% perannum which is second highest growth rate after Asia.

Latin America 4.0%

Africa 2.0%

Rest of the World 21.0%

GCC 10.0%

Europe 21.0%

North America26.0%

China4.0%


Latin America3.0%Africa1.0%

Rest of the World 18.0%

GCC 17.0%

Europe 12.0%North America15.0%

China12.0%


200834.4

million tons

201241.7

million tons

Since 2008, GCC HDPE productioncapacity grew by an average 26%p.a which is second highest afterAsia.



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Monoethylene glycol (MEG) is an important rawmaterial for industrial applications. A primary use ofMEG is in the manufacture of polyester (PET) resins, packaging, and kitchenware to engine coolants.Supported by the demand from polyester (PET) resinsproducers, global MEG production capacity has beengrowing by an average 6.5% per annum between 2008and 2012. This expansion of MEG has been driven bythe additions in Asia and GCC. Asia continues to be

Global MEG Production Capacity by Region (2008-2012)



the largest producer of MEG accounting for 40% of theproducts global capacity. Since 2008, there has beena 5.4% per annum growth of MEG production capacityin Asia. This is the highest among other regions.. GCCis the second largest MEG producing region globallyand in 2012 represented 19% of the global productioncapacity for MEG. This is a decrease from the 2008level of 22%.

Overview of global

Monoethyl ene Gly col(MEG) product ion

Latin America4.0%

GCC 22.0%

Europe 12.0%

North America 21.0%

China11.0%

Asia (Excl China)30.0%Latin America 2.0%

Rest of the World17.0%

GCC 19.0%

Europe 5.0%

North America 17.0%China13.0%


2008

21.1million tons

2012

27.2million tons

GCC is the second largest MEGproducing region and represented19% of worlds production capacity.



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Linear Low-Density Polyethylene (LLDPE) is part of along LDPE and HDPE. Globally, the majority of food and non-food packaging to produce heavy duty applications include liquid paper board coatings, wireand cable, injection moulding parts, pipes etc.

Global production capacity of LLDPE reached 30.4million tons, up from 22.8 million tons in 2008.World consumption of packaging materials createdopportunities for LLDPE producers worldwide. Almost

all LLDPE capacity expansion since 2008 has takenplace in Asia. This has resulted in Asia having thehighest capacity growth among other regions: 38.1%per annum between 2008 and 2012. This capacityexpansion has increased Asias share of globalcapacity from 19% of worlds total in 2008 to 38% in2012 making Asia the leading LLDPE producing regionin the world.

In mature markets such as Europe and North Americathere have been limited capacity additions andclosures of less competitive units. As a result, NorthAmerican LLDPE producers accounted for 22% of

Global LLDPE Production Capacity by Region (2008-2012)



Overview of global

LLDPE product ion

worlds total production capacity, down from 30% in2008. Similarly, the global share of European LLDPEproducers has decreased from 16% in 2008 to 12% in2012.

GCC LLDPE producers continue to be the third regionworldwide after Asia and North America. In 2012,LLDPE production capacity in the GCC has reached4.3 million tons which accounts for 14% of world total.GCC LLDPE capacity growth between 2008 and 2012of 10.9% per annum was one of the highest after Asia.

GCC 14.0%

Europe16.0%

Latin America 6.0%

Africa 2.0%

Rest of World 13.0%

China9.0%

North America30.0%


GCC 14.0%

Europe 12.0%

Latin America 5.0%

Africa 1.0%Rest of World7.0%

China15.0%

North America22.0%


200822.8

million tons

201230.4

million tons

LLDPE production capacity in theGCC has reached 4.3 million tonswhich accounts for 14% of worldstotal.



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MTBE (methyl tertiary-butyl ether) is a chemicalcompound produced in very large quantities and is

used as a fuel additive in motor gasoline. It is one of agroup of chemicals commonly known as oxygenatesbecause they raise the oxygen content of gasoline.

Global production capacity of MTBE in 2012 isestimated to be 18.9 million tons, slightly up from18.6 million tons in 2008. Asia is the largest producerof MTBE in the world accounting for 40% of globalproduction capacity. Asias production capacity growthof 8.9% per annum between 2008 and 2012 was thehighest among other regions.

Global MTBE Production Capacity by Region (2008-2012)

Source:Mitsubishi Chemical Techo-Research Corporation (MCTR), GPCA


Overview of global

MTBE product ion

GCC22.0%Europe 19.0%

North America 21.0%

Latin America 7.0%Rest of the World2.0%

China18.0%


GCC23.0%

Europe 17.0%

North America 13.0%

Latin America 5.0% Rest of the World2.0%

China28.0%


2008

18.6million tons

2012

18.9million tons

GCC is the second MTBE producing region in theworld. In 2012 its production capacity accounted for

23% of the world total. Combined capacity of GCCMTBE producers in 2012 reached 4.2 million tonswhich is similar to 2008 level.

Global production capacity of MTBEin 2012 is estimated to be 18.9MTPA.



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GCC ProductionCapac ity by

Country (2008-2012)

5.



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GCC Product ion

Capaci ty by Country

5. GCC Production Capacity by Country (2008-2012)

The GCC chemicals industry isone of the largest manufacturingindustries in the GCC and itcontinues to expand and diversify.In 2012, GCC chemicals capacityincreased by 6.1% driven mostlyby capacity additions in SaudiArabia and Qatar. GCC capacity

expansion in 2012 is slightlylower than in 2011 when regionregistered 10% year-on-yeargrowth. Between 2008 and 2012GCC chemicals capacity grew byan average 12.2% per annum.During the same period, UAEand Qatar were expanding theirchemicals capacity faster thanother GCC states by 19.6% and18.4% per annum respectively.

Saudi Arabia is the largest producerin the region and represented

65.2% of the GCC chemicalscapacity in 2012. From 2008-2012,there has been many capacityadditions in other GCC countries.Qatar continues to be the secondlargest chemicals producer in theregion accounting for 15.3% ofthe total GCC capacity in 2012.Over the past 5 years capacityexpansion in Qatar has increasedits share in the region from 12.3%in 2008 to 15.3% in 2012. WhileOman, a relatively small player inthe region accounting for 7.1%,

almost doubled its productioncapacity from 4.9 million tons perannum in 2008 to 9.3 million tonsin 2012.

GCC Chemicals Production Capacity by Country

CAGR of GCC Production Capacities (2008-2012)



57.769.4 74.3

80.1 84.2

10.1

10.111.4

16.619.8

4.9

7.3 9.0

9.09.2

4.2

7.6

7.67.7

3.40.7 5.2

3.41.3 7.1

7.16.9

1.4

1.41.4

81.6

96.7

110.7

121.8129.2

0

20

40

60

80

100

120

140

2008 2009 2010 2011 2012

MillionTons

CAGR (2008-2012)

12.2%

19.618.4

16.915.9

12.2

9.9

1.6

UAE Qatar Oman Kuwait GCC Saudi Arabia Bahrain

CAGR (2008-2012)

12.2%



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Basic Petrochemic als

capacity breakdownby country


Basic petrochemicals represent the largest shareof the GCC petrochemicals industry. With industryexpansion, regional capacity to produce basicpetrochemicals has been expanding and the annualcompounded growth rate between 2008 and 2012 is13.2%.

Saudi Arabia is the largest regional producer ofbasic petrochemicals. In 2012 its production capacityreached 29.8 million tons which represents 68% ofthe regions total. This is driven by the availability ofprimary feedstock such as natural gas and crude oil.Despite the Saudi dominance on a regional level,

other countries of GCC have been expanding theircapabilities which, from 2008-2012 has resultedin Qatar, Oman and Kuwait almost doubling theirproduction capacity. Qatar is presently the secondlargest producer in the region with 42.2 million tons.The establishment of new producers in Qatar andcapacity expansions by the existing producers has ledto an average increase in capacity growth of 17.5%per annum from 2008-2012.

Commodity petrochemicals capacity in Oman hasbeen 3.5 million tons per annum for several years.Methanol and aromatics are the main commodity

chemicals produced in Oman and have been keydrivers behind capacity expansion in the country overthe past years. Between 2008 and 2012, Omanspetrochemicals capacity grew from 1.4 million tonsper annum to 3.5 million tons at present, a growth of25.6% per annum.

Likewise, Kuwaits basic chemicals production capacityremained unchanged between 2010 and 2012 and iscurrently close to 3.4 million tons per annum. Capacityexpansion in Kuwait between 2008 and 2010 weredriven mostly by ethylene and aromatics (benzene andxylenes).

The UAE follows the same trend as in Oman andKuwait. There have not been any capacity additionsbetween 2010 and 2012, and so UAE chemicalsproduction capacity remains at 2.9 million tons perannum.

Basic petrochemicals capacity in Bahrain is 0.4 milliontons per annum and is largely related to the productionof Methanol. Over the past years there have not beenany capacity additions in Bahrain and therefore itremains the marginal producer in the region.

GCC Basic Petrochemicals Capacity by Country


21.025.6 27.5

27.829.8

2.2

2.23.5 4.3

4.2

1.4

2.4

3.53.5

3.5

1.3

1.4

3.43.4

3.42.92.9

2.9

0.60.4

0.6

0.4

0.40.4

0.4

26.9

32.6

41.1 42.244.1

0

5

10

15

20

25

30

35

40

45

50

2008 2009 2010 2011 2012

MillionTons

CAGR (2008-2012)

13.2%



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GCC Fertilizers Production Capacity by Country


Fert i l ize rs capacity

breakdown by coun try

Fertilizers and crop protection chemicals togetherform agricultural chemicals group. Fertilizer productionin the GCC is the second largest product groupexpanding by an average 13.7% per annum between2008 and 2012. In 2012 alone, GCC fertilizer industrysyear-on-year growth was 10.5% driven by the capacityadditions in Qatar.

Saudi Arabia is the largest producer of fertilizers inthe GCC. In 2012, the fertilizer production capacityof Saudi producers reached 10.9 million tons whichaccounts for 36% of regions total fertilizer industry.With the capacity expansions taking place between2008 and 2012, Saudi Arabias share in regions total

remained at the similar level of 36-38%. Major fertilizerprojects which have come on stream in Saudi Arabiain the past few years include Maaden Phosphate production capacity of di

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