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Overview on
Egyptian
Petrochemicals
Market
Chemical Eng./ Ihab Yahia
Marketing Research Dpt.Head
Sidi Kerir Petrochemicals Co.- SIDPEC [email protected]
LinkedIn: Ihab Yahia
1
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
Outlines
(A) Egypt Basic Information.
(B) Petrochemicals in Egypt: 1- History of the industry in Egypt. 2- Downstream market size. 3- Downstream external trade. 4- Growth opportunities. 5- Egyptian opportunities. 6- Case studies
(C) Conclusion.
8th Petchem arabia 2012 12-15 May 2013 - Abu Dhabi -UAE
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
• Location: North East Africa
• Area: total: 1,001,450 sq km
• Population: 85.3 million (2012 est.)
(Urban : 53% - Rural: 47%)
• Real GDP growth rate:
5.1% (2010)- 2% (2012)
• GDP OER(Official Exchange Rate)* :
$255 Billion USD (2012 )
A nation's GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year
(A) Egypt Basic Information
Source: The Central Intelligence Agency 3
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
Petrochemicals (excluding fertilizers) represents:
3% of GDP
and 12% of total Egyptian industries
Plastics consumption in Egypt: 25 kg for each citizen
Demand for polyolefin: 2.07 million tones in 2012
Natural gas - production: 61.33 billion cu m (2010 est.)
rank no. 16 globally
Gas reserves: 2.186 trillion cu m (1 January 2012 est.)
rank no. 17 globally
Source: The Central Intelligence Agency
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
Historical background Petrochemicals in Egypt :
1940`s
1984
1987
October 2000
2001
1940`s : Petrochemicals industry started when the first
ammonia plant was built in Suez.
1984 : production of Linear Alkyl benzene
in Amerya Petroleum Co.
1987 : The first Egyptian direct Investment in Petrochemicals
was in start up of the Egyptian Petrochemicals company for
producing PVC in Alexandria.
October 2000 : start up of SIDPEC plant for producing PE
(Egyptene) totally dependent on Egyptian natural gas.
in Alexandria.
2001 : start up of OPC plant for producing Polypropylene in
Suez.
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
. Market Size3 Supply and Demand :.i. 3
Egypt produce 28% of plastics material consumed annually
In 2006 Egypt consumed 1.64 million tons
In 2012 Egypt consumed 2.07 million tons
Average growth rate of market demand = 6% annually
Growth rate
Balance Consumption (2012)
Thousand tons
Product
7% 65% imported 555 Polyethylene (PE)
6% Totally imported 220 Polyethylene Terephthalate (PET)
7% 60% imported 440 Polypropylene (PP)
5 % 70% imported
(Resin+compound) 270 Polyvinyl Chloride (PVC)
6% Totally imported 110 Polystyrene (PS)
Source: SIDPEC Market research
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
Source: SIDPEC Market research
Egypt imports nearly 100% of Engineering plastics material .
Engineering Plastics represent 11% of the Egyptian Plastics demand.
(As commonly called in the Egyptian market)
Growth rate
Balance Consumption (2012)
Thousand tons
Product
7% 90 % imported 80 Acrylic Fiber
4%
To
tall
y im
po
rted
20 Ethylene Vinyl Acetate (EVA) (resin)
10% 105 Acrylonitrile Butadiene Styrene (ABS)
5% 5 Styrene-Acrylonitrile (SAN)
N/A 10 Others
N/A Nearly 100%
imported
220 Total Engineering plastics
consumption:
3.i. Supply and Demand : (continued)
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
:2012 . ii Urea production and Export in Egypt in 3
Source: Abu Qir Fertilizers
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
.iii Egyptian Polyolefin downstream external trade balance3
90.942 482.354 1266.775
860.358
1445.781
3112.086
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Imports
Exports
Million USD
•Exports value growth rate was increasing over the period greater than
Imports.
•The trade balance shows a considerable deficit over the period
Source: Trade Map (International trade center)
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
. Growth opportunities:4
IHS 3rd petrochemicals conference Cairo Oct. 2012
Growth Oportunity
Populat.
Million
GDP
k$/capita Kg/ capita
Demand
mill tons
AAGR %/yr
2012-17
Turkey PE
74.5 8.4 18.8 1,404 3.8
PP 23.6 1,760 5.4
Egypt PE
83.9 1.5 5.5 0.464 4.7
PP 3.9 0.326 5.7
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
. a. Egyptian opportunities:5
IHS 3rd petrochemicals conference Cairo Oct. 2012
• Industry Fundamentals
– Upstream feedstock integration
– Horizontal integration: upgrade by products
– Refinery – Petrochemicals
– Economy of scale
• Strategic Alliances with existing producers
– Alternative product supply (scrap and rebuild)
– Offer domestic market access in exchange of feedstock
– Local NGL developments
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
IHS 3rd petrochemicals conference Cairo Oct. 2012
• Develop a domestic market
– Compounding
– Pipes and fittings for the surrounding region
– Packaging for the fishing and agriculture sector
– More fibres related developments
• Private sector
– How to stimulate the private sector
– Automotive Parts Production
– Clear investment guidelines attract foreign investments
. b. Egyptian opportunities:5
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
. Case studies 6
6.1- Undergoing initiation.
• Upgrading by products :
SIDPEC polyethylene wax project
• Introducing Researches to commercial scale
New R&D organisation
• SIDPEC Marketing mix improvement.
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
6.2- Diversify feedstock (future cases).
• Naphta cracking
Tahrir petrochemicals complex this olefin complex should produce:
1.3 million t/y ethylene, 1.3 million t/y polyethylene
600,000 t/y propylene, 210,000 t/y butadiene.
Tahrir Petrochemicals should also include aromatic facilities to deliver 420,000 t/y
benzene.
• Gas to olefin GTO
This project targets optimizing the Egyptian natural gas usage,
1 million T/Y of olefins ( Ethylene and Propylene)and to produce 1 million T/Y of Poly-
olefins
• Shale gas in Egypt are a non-marine deposition and non deposition likely to be oil
prone which has a very low potential.
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
SIDPEC Markets -6.3
• SIDPEC is the sole producer of HDPE and LLDPE resin in EGYPT with
the trade name Egyptene where it is manufactured under Innovene license.
• SIDPEC annual production capacity is (220 thousand tons) from HDPE
and supposed LLDPE but the latter is out of production plan due to some
feasible and technical reasons.
Export
50%
Local
50%
2006 / 2007
Export
40%
Local
60%
2009 / 2010
Source: SIDPEC Market research
SIDPEC`s HDPE allocations trend :
Export
30%
Local
70%
2011 / 2012
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
36% 41% 31%
295 329 456
31% 27% 16%
342 490
926
SIDPEC
Marketing
Plan realized
percentage
from A
Total SIDPEC
received
inquiries
(thousand
tons) - A
SIDPEC Local & Export Market position
Source: SIDPEC Market research
SIDPEC Local Market Position
SIDPEC Marketing Plan
realized percentage from B
HD&LLD PE Local consumption
(thousand tons) – B
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
SIDPEC Local & Export Market position
SIDPEC Export Market Position
62% 30%
5% 2% 1%
Europe Asia Africa S.America N.America
SIDPEC export reached
59 countries.
But due to the increased
demand from the Local market
SIDPEC reduced the export
quota.
The pie chart represent
percentage of 2010 allocations
by continent as a destination.
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
Source: SIDPEC Market research
Source: SIDPEC Market research
(C) Conclusion
•The ability of balancing feedstock limitations by project
integration and by-product upgrading
•Develop an optimal portofolio for meeting demand
•Exports is the short term fix
• Domestic market is the long term wealth
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE
I would like to give thanks to
WRA-conferences and Clarion Events
Also to My managers in SIDPEC
for granting this opportunity .
Chemical Eng./ Ihab Yahia
Marketing Research Department Head
Sidi Kerir Petrochemicals Co.- SIDPEC
LinkedIn: Ihab Yahia
8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE