Share of Middle East region to rise in global plastics industry

16-Jan-07

The share of Middle East in global plastics production is set to rise as per Messe Düsseldorf, the Germany based leading global exhibition organiser, that emphasised the increased role of the region emerging as a global petrochemical hub. The plastics industry has a major share in the industrial sector of the Arab region due to faster economic diversification and increased focus on manufacturing. Middle East will have a significant bearing on the global plastics industry as the region emerges as a global petrochemicals hub, backed by the advantages of low-cost feedstock and labour, fast growing demand in Asia and new technologies. It is estimated that the basic chemical, plastic and metal industry has absorbed 60% of the total industrial investments in Arab countries of Saudi Arabia, Kuwait and the UAE and about 90% in Bahrain. As per estimates by PlasticsEurope, around 304 million tons of plastics will be produced worldwide in the year 2010, representing an annual growth of 5.3%, wherein Asia is expected to play a larger role. A shift in the pattern of world plastics production will be seen as Asia becomes a major producer. In three years, 43% of plastics will be produced on the Asian continent, 27% in North and South America, 25% in Europe and 5% in the Middle East and Africa. Out of the 230 million tons of plastics produced globally in 2005, Middle East and Africa accounted for 5.5%. 36% in Asia and Oceania, 29.5% in Europe and 24.5% in North America was the raw materials converted into plastics products in 2004. According to a McKinsey report a paradigm shift is taking place in the petrochemicals business from the West to the East, with the Middle East emerging as a global hub. The Middle East's share in the global ethylene market is expected to grow to 17% in 2010 from 9% in 2004, which means that 40% all new ethylene capacity will be built in the Middle East. The total global ethylene capacity is projected to increase to 148 million metric tons in 2010 from 114 million metric tons in 2004.