Downstream PP growth in the Gulf

Strong government support from the Gulf Cooperation Council (GCC) has contributed to the rapid development of polypropylene (PP) downstream industries in the region, including nonwovens, geotextiles and films.

These in turn, are expected to bolster PP demand in GCC countries, which have long been a net exporter of PP due to minimum local use.

New analysis from Frost & Sullivan finds that the total PP resin market for local conversion in the GCC earned revenues of $983.1 million in 2011 and estimates this will reach $1,366.0 million in 2016.

The key end-user segments covered in the research are biaxially-oriented PP films, cast PP films, carpet yarns, nonwovens, geotextiles, woven bags, injection moulding grades and PP for the automotive sector.

“The easy access within the GCC to PP resin owing to its large oil and gas reserves widens the scope for the local conversion of PP to downstream value-added products,” says Vishnu Sankaran, associate director for Frost & Sullivan Middle East and North Africa. “With burgeoning population and rising GDP, key end users, such as packaging and construction, are adding to the need for PP in the GCC.”

The focus of governments on diversification to generate employment and reduce reliance on the oil and gas sector presents a conducive regulatory environment for growth in the downstream PP industry. Saudi Arabia and the United Arab Emirates, in particular, are expected to lead the pack towards downstream diversification.

While companies in the region have been successful in developing world-scale petrochemical complexes, they lack the indigenous technologies required for certain downstream PP products. This challenge is intensified by the nascent stage of research and development activities in the region.

“Hence companies, primarily technology-intensive downstream ones, are likely to form alliances with foreign firms to access necessary technologies,” said Sankaran. “The availability of personnel with relevant expertise in the operation of conversion machinery and higher focus on staff training are also crucial.”

Niche product grades that target specific applications in line with the development of the PP downstream industry will enable local suppliers to stay competitive.