Sep 24 2010
Research and Markets has announced the addition of the "Kuwait Petrochemicals Report Q4 2010" report to their offering.
(http://www.researchandmarkets.com/research/129355/kuwait_petrochemic)
The Kuwait Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's petrochemicals industry.
Despite doubts about gas feedstock availability, its cost and the viability of using naphtha or other feedstocks, PIC is continuing to plan new petrochemical projects. In August 2010, it announced projects worth US$10bn over the next four years as the company seeks to expand its operations at home and abroad.
With domestic demand likely to continue to outstrip supply, China will remain a net polymers importer over the medium term and the largest importer in the world and Kuwaits petrochemicals expansion will be geared towards servicing China's needs. By 2014, China could represent 35% of the global PP market and 20% of global PE demand. However, China will become increasingly self-sufficient, a situation that PIC is contributing to through its Chinese investments. In terms of polymer capacities, we forecast a 1.65mn tpa increase in Chinese PE capacity and a 1.49mn tpa increase in PP in 2010, ensuring polymer market self-sufficiency should approach 75% PE and exceed 100% PP. Consequently, the Kuwaiti industry will require an expansion of the domestic and regional plastics conversion industry.
The GCC accounts for just 2% of the global plastics conversion market, but annual growth is expected to reach 9%-11%, making it one of the fastest growing regions over the medium-term. In 2009, the GCC consumed about 2.5mn tpa of polymers, mainly in the packaging (45%) and construction (27%) markets, according to the plastics industry consultants Hipro Consultancy. Of the total, 41% was PE, 21% PP and 19% PVC. The plastic conversion market was estimated at around US$10bn for 2010. According to an official from Saudi Arabias Sabic, GCC consumption of plastics has grown from 19 kg per capita in 2000 to 39 kg per capita in 2010 and should reach the kind of levels seen in a developed market like Japan by 2020. Packaging is the fastest growing segment, followed by construction and wire and cable.
However, BMI believes that Kuwait will struggle to compete with the UAE and Saudi Arabia in developing this potential due to the petrochemical sectors dependence on naphtha feedstock which has tended to cost more than ethane used elsewhere in the Gulf, thereby undermining competitiveness and the comparative lack of downstream diversification, notably in the PTA-PET chain. The Kuwaiti investment climate is also comparatively poor, despite the potential for a larger cluster of petrochemicals industries around Equate and the low financial barrier to entry for many converters, and Kuwait has failed to keep up with the pace of manufacturing growth seen in the UAE and Saudi Arabia. As such, over the medium-term, the focus will be on exporting PE and EG, since Equate possesses a very slim portfolio.
In the past quarter, BMI has revised down Kuwaits petrochemicals rating by a modest 0.3 points to 58.2 points due to a change in its overall country risk rating. At the same time, the UAEs score has improved, pushing Kuwait into fourth place from third. Kuwaits score has been eroded by uncertainty over the future of the Al-Zour refinery, which has attracted considerable controversy over its tendering process. Kuwaits score has also come under pressure in recent months due to deterioration in country risk caused by the economic downturn coupled with the declining investment environment following the cancellation of KPCs planned JV with Dow, although overall its country risk ratings are still better than mid-2009 due to an improvement in the country's outlook.
Key Topics Covered:
- Executive Summary
- SWOT Analysis
- Environment SWOT
- Global Overview
- Petrochemicals Market Overview
- Financial Results
- Global Oil Products Price Outlook
- Gulf Regional Overview
- Kuwait Market Overview
- Industry Trends And Developments
- Business Environment Ratings
- Overview Of Kuwaits Business Environment
- Foreign Investment Policy
- Political Developments
- Industry Forecast Scenario
- Macroeconomic Outlook
- Company Profiles
- Country Snapshot: Kuwait Demographic Data
- Glossary Of Terms
- BMI Methodology
Companies Mentioned:
- Equate Petrochemical Company
- Petrochemicals Industries Company (PIC)