Jadwa Investment have released its report 'Petrochemicals and the Vision 2030,' stating that the Saudi petrochemical industry has become an important pillar of the Kingdom's economy, but will face local and international challenges to maintain this level of growth
Dr Fahad M Alturki, chief economist and head of research, and Asad Khan, senior economist at Jadwa Investment have compiled a report on the Saudi Arabian petrochemical sector. In summary, the report concludes that the petrochemical industry is vital to Saudi Arabia's non-oil economy. Chemical and plastic exports in 2015 were valued at US$30bn, amounting to 60 per cent of non-oil exports.
The National Transformation Program (NTP) 2020 and Vision 2030 have identified the petrochemical sector as one of the key areas to lead KSA away from its reliance on fossil fuels. The implementation of the NTP 2020 targets will help move the sector towards increased downstream specialty and end product capacity. This will help achieve growth in the Kingdom’s non-oil exports and also establish a higher value adding manufacturing base; creating employment opportunities for Saudis.
The report also outlines the fact that since mid-2014, the drop in global chemical prices, higher domestic feedstock prices and more intense global competition from the likes of the USA and China means that the Saudi petrochemical industry has some challenges to overcome in the coming years. However, the summary of the report concludes: "All these factors combined will re-shape the petrochemical industry in the Kingdom. Nevertheless, the government has demonstrated, through both the Vision and NTP, that the sector’s importance to the Saudi economy will not be allowed to diminish."
"Ultimately, sustainable growth for the sector over the long term can really only be achieved by moving down and across the petrochemical value chain and this is currently beginning to take place in the Kingdom."