Saudi Aramco has set ambitious targets for itself and the petrochemical sector in the Middle East over the next ten years that will force the industry to fully take advantage of the upcoming global boom in the chemical industry.
The targets aim to see 150 per cent increase in sales from US$80 billion in 2010 to US$200 billion in 2020, a five-times rise in workforce and a ten-fold increase in research and development (R&D) spend from half per cent of a company's revenues to five per cent.
Despite being home to more than one-third of the world's oil and nearly a quarter of natural gas reserves, the Gulf has a market share of only US$40 billion or around one per cent of the total.
This is why the targets set by Saudi Aramco are essential, according to Khalid Al Falih, Saudi Aramco's president and CEO, if the chemical industry wants to take its place alongside oil and gas as one of the Gulf's pillar industries, reported Emirates 24/7.
GCC chemicals output is forecast to double from US$40 billion to US$80 billion in 2020 but Al Falih wants the region to target US$150 billion-US$200 billion per year by capitalising not only on growing existing businesses but on creating new ones.
The Middle East needs to invest more in its own chemicals industry if it wants to contribute more to the wider petrochemical and chemical industry. A massive expansion would see great potential for job creation which should see a growth in chemicals-related workforce increase five-fold.
The region has relied primarily on the licensing of technology from others so to be able to create new businesses, but the region's producers should increase their investment on R&D. "If we are to compete and lead globally, I believe the Gulf's chemical sector must increase in R&D spending by a factor of 10 or to roughly 5 per cent of the total sales," said Al Falih.
