Market Trends of GCC Chemical Logistics Industry
This section covers the major market trends shaping the GCC Chemical Logistics Market according to our research experts:
Saudi Arabia Chemical Sector Occupies the Major Share in the GCC Region
Saudi Arabia has maintained its exceptional standing in 2019, retaining its spot in the top 15 exporters of chemicals globally. It was also the GCC regions' powerhouse, with the largest volume output and chemical sales revenue. Over the last few decades, China and Saudi Arabia have emerged as key chemical production hubs, reshaping the balance in the global chemical industry.
The Kingdom of Saudi Arabia (KSA) is considered one of the leading countries in the manufacture of many major chemical products and investing its data as one of the most suitable environments for low-cost chemical industries. KSA sits alongside the United States as the largest petrochemical manufacturer in the world, with 14 Saudi companies producing an average of 95 million metric ton of petrochemicals, accounting for nearly 9% of global production as reported in September 2020.
The volume of the kingdom's business is expected to double by 2030, based on the increase in global demand for the chemicals industry and because of the relentless work of the Kingdom of Saudi Arabia to push the wheel of investment in this sector.
The Kingdom is also characterized by its abundance of raw materials and easy access to it, in addition to its possession of a high level of infrastructure that is constantly being improved, and the companies of the Kingdom of Saudi Arabia also have access to a solid and wide logistics network, which puts the Kingdom in a prime position that serves the growing demand of Africa, Europe, and Asia.
Increasing Investments in the GCC Chemical Industry
The chemicals industry in the GCC is expected to attract new investments, as the region explores more higher-value downstream opportunities amid continued volatility in oil prices and as benefits from cheap feedstocks ease. Future investments in the GCC are being led by Saudi Arabia, which has been trying to get in investors into its petrochemical sector as part of its Vision 2030 program to diversify its economy.
The energy giant 'Aramco' is undertaking two massive projects in Saudi Arabia - a crude oil-to-chemicals (CTC) project in Yanbu to produce 9 million tonnes/year of chemicals and base oils by 2025 and the Amiral 1.5 million tonnes/year cracker joint venture project with France-based Total which is slated for start-up in 2024 in Jubail.
The developments in the market may result in greater competitiveness in the regional chemical industry by enabling it to leverage economies of scale and accelerate innovation, which will be a major driving factor for logistics in the chemical sector.
