Middle Eastern plastics processors riding high: AMI's latest report

25-Apr-09
Despite the economic downturn around the world many plastics convertors in the Middle East are still facing strong domestic demand growth and are now investigating the potential for internationalising their businesses. Several large investment projects have been announced for instance in stretch film by companies including 3P and some interesting financial moves are underway as well funded Middle Eastern companies look to acquisitions to accelerate business development. Taghleef Industries' purchase of the biaxially oriented PP film business of Radici in 2008 is an example of what AMI expects to be a significant development. Packaging accounts for more than 50% of the plastics processed in the GCC and demand continues to rise quickly. Some of the packaging is destined for industrial end-use (of which the packaging of polymers is an example), but most goes into consumer goods. Amongst the largest producers of packaging are Napco, Gulf Packaging, Savola and Intergulf. In recent years most of the countries that form the GCC (Gulf Co-operation Council) used the time of high oil prices to pay down government debt. The region entered 2009 with very low levels of net government debt but with big plans for social and economic development. These plans include improved education, healthcare and housing as well as a greater employment opportunities and the broadening of the economy to make it less dependent on hydrocarbon extraction. In practical terms for the plastics industry this means governments committed to encouraging development of the plastics processing sector as well providing the funding surety behind many infrastructure and construction projects which drive plastics usage. The region is due to bring on line 15 million tonnes of new polymerization capacity in the next three years and most polymer producers now have programmes underway to foster the development of local customers. Such support extends across technical and commercial issues including favourable terms of raw material. With this benign environment many plastics processors and investors are seeking to better understand the opportunity in plastics processing. The fortunes of the leading plastics processors in the GCC are reviewed in a new report from Applied Market Information Ltd. just published.
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