SE Asia’s demand for polyolefin grew at a CAGR of over 6% in the last decade

The demand for polyolefin in Southeast Asia has grown at a Compound Annual Growth Rate (CAGR) of more than 6% in the last decade. Southeast Asia has emerged as a major region for the polyolefin industry due to strong demand growth. The major countries in the region which are driving the growth of the polyolefin industry are Thailand, Malaysia and Indonesia. These countries are the largest contributors to polyolefin demand in the region, as per GlobalData. Singapore, on the contrary, does not have a high consumption but produces and exports huge quantities. It has now emerged as the major supplier of polyolefins in Southeast Asia, with a total export of 4.5 mln metric tpa in 2011. China is a lucrative market for polyolefin exporters in Thailand, Singapore and Malaysia. As China is expected to remain a net importer for the next five years, Thailand and Singapore can export significant additional quantities to China. Thailand has already ramped up its production capacity in the last three years, while Singapore will increase its capacity in the next five years. Malaysia can also take advantage of growing Chinese imports by increasing its production capability. Indonesia, on the other hand, needs to become self-sufficient in meeting its domestic polyolefin demand. Thailand is the regional powerhouse in the Southeast Asian polyolefin industry, with the largest consumption and production of polyethylene and polypropylene. The growth era of the Thai polyolefin industry started in the 1980s after the discovery of large natural gas reserves in the Gulf of Thailand, which provided abundant feedstock, such as ethane and propane, for olefin production. Most of the polyolefin plants in Thailand are situated in Rayong in the eastern seaboard. The reason for the concentration of petrochemicals plants in the eastern seaboard is its proximity to sea routes, which facilitates the transportation of raw material and finished goods. The Thai polyolefin industry is in an advantageous position, not only due to the availability of abundant feedstock but also to the strong demand from the domestic and Chinese markets. With a polyolefin production capacity of approximately 6 Million Metric ton per annum (MMtpa) in 2011, Thailand is poised to take advantage of the Chinese demand for polyolefins.
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