LEAST AFFECTED BY the current global economic meltdown, the Saudi petrochemical companies are poised to make an aggressive entry into more foreign markets at the expense of their counterparts in Europe.
Most of the European petrochemical companies are affected by the financial crisis. Moreover, these companies have to import primary raw materials for manufacturing their products. On the other hand, Saudi petrochemical companies rely on raw materials that abound in the kingdom at cheaper rates. "This enhances competitiveness of Saudi petrochemical companies in the global market.
These companies have the potential to pose stiff competition to domestic petrochemical companies, affected by the financial crisis, in several countries across the world," said Saleh Al Nuzha, president of the Saudi Petrochemical Manufacturing Company. Speaking to Gulf News following a press conference in Dammam yesterday, he said that most of the petrochemical companies outside the kingdom are importing primary raw materials at much higher global prices.
Therefore, these companies do not have as much competitiveness as their Saudi counterparts, thanks to the availability of raw materials in abundance. Al Nuzha, a noted figure in the field of petrochemical industry in the kingdom, said that Saudi factories enjoy sound capabilities, operational efficiency and productive capacity after taking advantage of the highly advanced technology and production techniques. He said that Saudi petrochemical companies were also affected by the global financial crisis. "This was mainly in the form of a sudden fall in the prices of petrochemical products.
The prices plummeted 50 per cent within a short span of 30 days," he said. According to Al Nuzha, most of the petrochemical companies in the kingdom suffered net losses in the last quarter of 2008. "This was mainly attributed to the fall in prices of petrochemicals produced in the second and third quarters when the prices of raw materials and production cost were much higher comparing with the fourth quarter," he said. On his part, Taha Al Balwi, a specialist in the petrochemical field, said that Saudi petrochemical companies should take advantage of the fall-out of the global meltdown. "Due to failure to cope with the crisis, several petrochemical factories have been shut down in various parts of the world. Saudi companies can make an aggressive entry into those countries," he said adding that US petrochemical companies were the worst victims of the crisis.