27 November, 2017 – Numbers released in a new report by the Gulf Petrochemicals and Chemicals Association (GPCA) have highlighted the role of the chemical industry in diversifying the regional economy and accelerating non-oil economic growth. According to the report, in 2016 the GCC chemical industry contributed around $43.8 billion to the GCC economy, equal to almost one third of manufacturing value added and 29% of manufacturing revenue.
GCC chemicals output grew at the fastest pace in five years with chemical production growing 8.5% from 2015 levels, reaching 158.8 million tons. Capacity additions in 2016 were driven by Saudi Arabia, where production increased by 12.7% year on year. In line with the industry’s product diversification drive, a number of new products were added in the Kingdom, with the majority of growth occurring in the specialty chemicals segment.
Saudi Arabia’s chemical industry’s contribution to manufacturing value added grew from 23% in 2015 to 27%, highlighting the industry’s growing role in economic diversification and supporting non-oil economic growth. The country remains the largest chemical producer in the region, accounting for more than two thirds of GCC capacity or 67%.
The UAE chemical industry’s contribution was the highest among all GCC states, accounting for 52% of manufacturing revenue. Off the back of significant investments over the past decade, the UAE almost doubled its share in overall regional capacity from 4.7% in 2006 to 8.5% in 2016.
The chemical industry in Oman reported the highest contribution to manufacturing GDP among all GCC states. In 2016 the industry contributed 51% to the country’s manufacturing value added, growing from 47% in 2015. The country’s production index has systematically outperformed that of the GCC for the period 2006-2017. Employment in the chemical industry in Oman grew from 2,700 in 2015 to 6,700 in 2016.
Dr. Abdulwahab Al-Sadoun, Secretary General, GPCA, who met with key regional media during a roundtable, commented, “Saudi Arabia has been leading GCC industry’s growth with capacity additions including specialty chemicals through new project announcements. The following days of the Annual GPCA Forum will bring the entire sector together in unity and multiply our successes and learnings.”
“The Kingdom’s chemical industry growth will underpin overall GCC market dynamics due to its large share in total production capacity. The sector’s contribution to economic growth has also been exemplary, which highlights the role of the industry as a key enabler in the journey towards economic diversification. For every job created in the industry, there are about three jobs created in other sectors. To sustain this growth, chemical output from the region has had to grow by 9.2% over the past decade,” he continued. In 2016, the GCC chemical industry reported $77 billion in sales revenue down 3% from the previous year as a result of changes in global petrochemical prices.
The chemicals industry directly employs 152,100 people in the GCC, while investing $584 million in research and development. Saudi Arabia accounts for 68% of the industry’s regional workforce, in line with its immense production output.
The ‘2016 GCC Petrochemical and Chemical Industry Facts and Figures’ was released ahead of the 12th Annual GPCA Forum taking place from 27-29 November 2017 at Madinat Jumeirah, Dubai.